Latest: January Property Market Report

The end of a calendar year gave us a chance to look back at property trends and analyse data to see how the market fared during the last 12 months. December is traditionally a quiet month as people focus on festivities rather than moving home. As such, there was little to report on house prices.  

In fact, Nationwide’s December House Price Index showed there was no movement in property values during the last four weeks of the year. This follows a small decrease in November of -0.2%. The building society says we start 2024 with an average house price of £257,443.  

Modest house price corrections in 2023

When collating its 2023 index data, Nationwide concluded that house prices fell -1.8% during the year. Zoopla came to a similar conclusion. Its data pointed to a UK house price fall of -1.1% in 2023.   

Positive sentiment as we start a new year

So, were the predictions made at the end of 2022 for 2023 accurate? For comparison, Rightmove predicted house prices would fall 2% in 2023, with Nationwide saying values would decrease by approximately 5%. It’s safe to say the ‘soft landing’ forecast was achieved.  

While December’s house price data was unremarkable, other analysis cast light on the health of the market as we start 2024. Zoopla’s final House Price Index of 2023 revealed that new sales agreed were running 17% higher when compared to 12 months previous. The portal also said demand at the end of 2023 was 19% higher.   

Home mover sentiment was no doubt boosted by end-of-the-year finance news. Following a sharp decline in inflation, the Bank of England (BoE) decided to hold the interest rate at 5.25% in December. Economic experts have started to speculate whether the BoE may start to reduce the rate in 2024.   

Zoopla was among the organisations also using the end of 2023 to make predictions for the coming year. It expects house prices to fall 2% during 2024 but for wages to steadily improve. Also helping affordability will be revised mortgage rates, which the portal thinks could fall to an average of 4.5% by the end of the coming year.  

The Nationwide hedged its bets in terms of 2024 house prices. It said values would likely record another small decline or remain broadly flat, running at a 0% to -2% change over the course of 2024. It also says solid income growth will improve affordability over time.  

Renters outnumbered available properties

One area where figures were firmly on the up was the UK’s rental market. In December, Rightmove revealed that there had been an average of 20 individual enquiries per available rental in 2023. In comparison, just six tenants were chasing each property in 2019.  

Many tenants will be wondering where rents are headed in 2024. The portal expects the number of renters to still exceed available properties. As a result, it predicts rents to rise by 5% over the next 12 months.  

More new lets expected

On a positive note, Rightmove expects the gap between the supply of rental properties and demand from tenants to decrease. It says the number of newly advertised properties to rent outside of London could rise by 5% over the course of the year. In the capital, the supply may increase by 3%.  

Additionally, Rightmove says tenant demand is now 12% lower than 12 months ago. Additionally, the number of rental properties is 11% higher. For context, the HomeLet Rental Index documents the new average UK monthly rent as £1,279.  

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