House price declines are gradually easing as the number of sales increases across the UK. In October 2023, prices dropped by -1.4%, slowing to -0.8% by December.
The East of England (-2.5%) and the South West (-2.2%) experienced the most significant declines in 2023. In contrast, house prices in Northern Ireland increased by 3.2% . Despite this, higher mortgage rates are expected to persist, influencing house prices throughout 2024.
Increased housing supply provides more options for buyers, particularly those seeking larger family homes. Despite this, half of mortgage holders have not yet refinanced at higher rates.
Data indicates that sellers are consistently reducing asking prices to attract buyer attention. More than 20% of sellers are now agreeing to discounts exceeding 10% of the initial asking price, and this figure rises to 25% in London and the South East.
Prices have stalled for various reasons, including:
tax alterations restricted property acquisition by investors and international buyers
the Brexit vote impacted job growth
the pandemic closed cities which altered work patterns
elevated mortgage rates disproportionately affected pricier housing markets.
It's unlikely that mortgage rates will fall significantly in the near future, staying within the 4% to 5% range, with the most favourable terms reserved for larger deposits.
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