House prices in the UK are always a hot topic in the news and media. We hear about it constantly; the market goes up in some areas, and in others, it struggles. Yet, across the UK, house prices can differ. Not just by a few thousand pounds but sometimes by hundreds of thousands. So, if you’re looking to buy a property with a budget in mind, you’re likely interested in where to invest. Then this article is for you.
Here, we’ll cover differences in house prices across the UK; we’ll look at the current state of the housing market and what we can expect.
The market has experienced many changes in recent years, influenced by factors such as politics, economic policies, and global events like the COVID-19 pandemic. Understanding how house prices differ across the UK is essential for anyone looking to invest in property, relocate, or gauge the economy’s health.
With that being said, let’s get started.
Where are house prices falling the most in the UK?
With recent data in mind, property prices in the UK have fallen 1.2% across the country in the last year. The UK’s national average currently stands at around £288,000. However, some parts of the country have witnessed more significant drops in price than others.
The most significant decrease is observed in the South East, where average house prices stand at £376,804, marking a 4.5% decline. Traditionally known for its higher property values, this region is experiencing a market adjustment. This could be due to market saturation and a correction from the remarkable growth seen over recent years.
Following closely is the South West, with an average house price of £293,067, experiencing a 3.9% decrease. This region’s market correction might also reflect a re-balancing following a period of high demand, especially in rural and coastal areas.
Eastern England also shows a significant drop, with average prices at £325,634, decreasing by 3.5%. This area has been affected by similar trends as the South East and South West, indicating a broader pattern of adjustment across the southern regions of the UK.
Besides these three locations, other areas in England have only seen price decreases of below 3%. The decline in house prices can be seen as either good or bad. On one hand, it opens up opportunities for buyers previously priced out of these markets. On the other hand, it reflects the economic uncertainties we’ve been hearing about over the last year or two.
Will UK house prices fall/rise in 2024?
As we look towards 2024, the UK housing market is poised for significant shifts. According to current analyses and forecasts, house prices are expected to experience a downturn.
Analysts and lenders predict a decline in house prices for the coming year. However, the severity of the downturn is contested. The government’s official forecaster, the Office for Budget Responsibility (OBR), projects a nearly 5% drop in property prices. The consensus is that the high cost of living and the economic challenges will limit the benefits of falling house prices for potential first-time buyers, who are already stretched by soaring rental costs.
The economic outlook 2024 suggests a sluggish year, likely impacting the housing market. A less secure job market may affect the confidence of potential buyers, particularly those looking to purchase their first home. Added to this is the expectation of higher mortgage rates; many homeowners could see their mortgage repayments increase sharply as fixed-rate deals expire.
Interest rates, which fluctuate based on the Bank of England’s base rate and market conditions, will play a crucial role in shaping the market. The IMF warns that the Bank of England must keep interest rates high into 2024. Initially, the IMF had forecasted interest rates peaking at 6%, but this has been revised to 5.5%.
Which area has the highest house prices in the UK?
In the UK, house prices vary significantly across regions and cities. While prices can change every month, we’ve provided a quick overview of the most expensive house prices recorded over the last year.
By region:
London has the highest house prices, with an average house price of £528,798, despite experiencing a 2.3% decrease. Understandably, as the capital city, it is home to high property values due to attracting national and global investments.
South East England follows with the next highest house price with an average price of £376,804, though it faced a 4.5% decline last year. This region’s proximity to London and attractive areas also contribute to its high property values.
Eastern England is the third highest region for house prices, with an average price of £325,634.
By city:
Westminster in London is the most expensive area in the UK, with average property prices of around £900,000.
St Albans and Winchester follow, with average prices around £580,000 and £520,000, respectively.
Chichester and Oxford are not far behind, with average prices close to £480,000. Cambridge and Brighton & Hove present desirable locations with average prices of around £510,000 and £430,000, respectively.
Bath sees average prices near £430,000.
Chelmsford and London (other areas outside Westminster) also feature in the list of expensive areas, with average prices around £380,000 and £525,000, respectively.
The most expensive areas to purchase property remain concentrated in the southern part of the country, which has historically always been the case.
Where in the UK are house prices low?
While property prices have generally declined across the UK, creating more affordable opportunities in many areas, some regions stand out for their particularly low property values. The North East of England is the perfect example of this, with some of the lowest house prices in the country. Overall, the North East has the lowest property price average in the country at £177,000.
Within the North East, the following two cities are the cheapest places to live.
Shildon in County Durham is a prime example of affordability, with an average property price of just £56,146. This extremely low figure makes Shildon one of the most accessible housing markets in the UK—the town’s affordability results from a seemingly lower demand for property. The property will remain on the market for an average of 213 days.
Middlesbrough is another area in the North East with significantly low property prices. The average house price here stands at £119,197. Again, Middlesbrough has reduced demand from buyers, resulting in an average market time of 156 days.
Should I wait to buy a house?
Deciding whether to buy a house or to wait requires a deep understanding of the current market trends and future forecasts. Let’s take a look at some developments below:
Current market trends and forecast
Price predictions
Analysts and opinions are of the consensus that a continued decrease in house prices in 2024 is likely. The HomeOwners Alliance notes that despite challenges such as increased mortgage costs and the cost of living crisis, the expected decline in house prices is more likely a market correction rather than a crash. This would indicate that purchasing in the next year would be a somewhat safe time to purchase
Mortgage rates
Mortgage rates have increased significantly since 2021; it’s been all over the news recently. However, things may finally be changing. There’s a possibility of stabilisation in 2024, improving the mortgage outlook and creating a positive outlook for buyers.
Buyer’s market
The UK property market 2024 is expected to favour buyers in many regions, with better pricing from sellers and less competition. This presents opportunities for buyers to negotiate better deals.
Things to consider for potential buyers:
Economic factors
Buyers should remain aware of the broader economic situation, including interest rates and government influence. As 2024 is likely to be an election year, news about housing policy may affect the overall property market.
Personal circumstances
If you’re buying a house for your personal use, as long as the property is affordable and you can make payments for the long term, then take that as a sign to make the purchase. Waiting for longer without being confident that things will tip in your favour may only be worth the inconvenience once that time materialises.
What will happen to UK house prices in the next five years?
While predictions and forecasts can only reveal so much, here are some of the general opinions of what the property market can expect over the next few years:
Short-Term Forecast (2024):
House Price Adjustments
Analysts expect house prices to continue their downward trend in 2024. The HomeOwners Alliance predicts a further drop, likely around 3%, influenced by rising mortgage costs and the cost of living crisis. This decrease is viewed more as a market correction rather than a crash.
Interest Rate Impact
The effect of rising interest rates on fixed-rate mortgages is a crucial factor, leading to speculation of decreasing sale volumes and prices. The Bank of England’s base rate decisions will play a significant role in how mortgage rates and, by extension, the housing market are affected.
Market Recovery Predictions
Despite the current downturn, there is cautious optimism for a gradual market recovery starting in 2024. This optimism stems from factors such as stabilising mortgage rates and a potential improvement in the economic climate. We’ve had a few years of recession woes and general economic doom and gloom stories; a shift in this would also impact the overall market.
Long-Term Outlook (2024-2028):
Overall Growth Forecast
Over the next five years, the UK housing market is expected to recover from its current slump. The strongest performance is expected in regions like the North, Wales, and Scotland initially, while London will continue to rise in value.
Rental Market
Demand for rental properties will likely increase, particularly in popular towns and cities. This trend is driven by factors such as the cost of living and rising property prices.
What does this mean for sellers?
With the expected decrease in house prices in 2024, sellers may need to adjust their expectations. Properties might fetch prices lower than in previous years, especially in areas with a heightened market correction.
Additionally, sellers may find themselves dealing with competition in a buyers’ market. This can mean higher costs of achieving a sale or taking longer to sell. This is something that must also be accounted for.
Here at Sold.co.uk, regardless of the market conditions, we will continue doing what we do best – getting properties sold. If you’re looking to sell a house fast, we can help. Get in touch to find out more.
FAQ
How should sellers respond to a buyer’s Market in 2024?
In a buyer’s market, sellers should focus on competitive pricing and ensuring their property can compete against similar properties. For sellers to achieve successful sales, they will need to be flexible in negotiations. Sellers may also look at other avenues, like cash house buyers, who may offer a faster way to sell their property.
Where is the most expensive place to buy property in the UK?
London is the most expensive place to buy a property in the UK. As the capital, the city attracts investors from around the world, which results in increased demand, which ensures prices remain higher than anywhere else.
Which cities have the highest house prices in England?
In England, cities like London, Cambridge, Oxford, and Bournemouth have the highest house prices. The majority of the cities in the southern part of England are usually where the highest property prices can be found.
Which UK city has the cheapest houses?
The cheapest house in the UK can be found in Shildon in the North East. However, areas like Blackpool also have cheap houses, as do many cities and towns in Scotland. The further north you go, the more affordable the prices.
