House Price Changes

According to the Halifax House Price Index, house prices in November 2023 were 1.0% lower than a year earlier. Most forecasts predict a mild decline in house prices in 2024. Halifax, the UK’s biggest mortgage lender, expects a 2-4% drop, while Nationwide anticipates a “low single-digit decline” or even flat prices. These forecasts reflect the impact of higher living costs and mortgage rates on affordability.

Regional Variations: The decline is likely to be uneven across the country. London and other high-value areas are expected to see steeper price falls, while some northern and peripheral regions could see price resilience or modest growth.


Economic Factors

There are several economic factors influencing the current housing market. These include:

  • Economic Uncertainty: The UK economy is facing challenges, with the potential for recession looming. This is impacting market confidence and contributing to cautious buyer behaviour.
  • Government Policy: Government policies like Help to Buy could affect the market, though their effectiveness is debated. The decision on the scheme’s future will be closely watched.
  • Geopolitical Landscape: The ongoing war in Ukraine and the global energy crisis add to inflation and economic uncertainty, further impacting the housing market.


Impact of Government Policies

Changes in government policies can significantly impact the UK housing market, influencing housing affordability, demand, and, ultimately, house prices. Here is a look at some recent and upcoming policy adjustments and their potential effects:


Recent Policy Changes

  • Levelling Up White Paper: Launched in February 2022, this paper outlines the government’s plans to address regional inequalities, including boosting infrastructure and housing in neglected areas. This could lead to increased demand and price growth in targeted regions
  • Building Regulations Update: New energy efficiency standards for new builds, effective June 2023, may increase construction costs and potentially increase the price of new homes.
  • Changes to Help to Buy: The controversial government scheme offering equity loans to first-time buyers remains under review. Its potential continuation or modification could impact the affordability of starter homes.


Upcoming Policy Shifts

  • Mortgage Guarantee Scheme Review: This government-backed scheme supporting lower-deposit mortgages expires in December 2023. Its extension or termination could influence affordability and transaction volumes in particular market segments.
  • Tax Changes: Potential adjustments to property taxes, capital gains tax, or stamp duty could impact investment in the housing market and influence buyer behaviour, leading to potential price shifts.


Global Influences

The UK housing market, although seemingly domestic, is intricately woven into the fabric of the global economy and susceptible to external shocks. Several global factors have the potential to influence its trajectory, introducing uncertainty and potential volatility. Here are some key considerations:

  • War in Ukraine: The ongoing conflict has triggered economic instability and energy price hikes worldwide. This could impact British businesses, household incomes, and ultimately, mortgage affordability, potentially dampening demand and contributing to price adjustments.
  • Global Trade Tensions: Rising trade tensions between major economies like the US and China could disrupt supply chains and increase import costs, fuelling inflation and impacting the UK housing market through increased construction costs and potentially dampening investor confidence.
  • Global Recessionary Risks: A synchronised global recession, though currently not projected, could significantly impact the UK economy and housing market. Reduced demand and investment, alongside potential job losses, could lead to price falls and decreased market activity.
  • Interest Rate Movements: Global interest rate decisions, particularly by the US Federal Reserve, can knock on UK borrowing costs and mortgage rates. Rising global interest rates could further cool the UK housing market by making mortgages more expensive and reducing buyer affordability.
  • Foreign Investment: The UK housing market attracts significant foreign investment, particularly investors seeking safe havens. In times of global economic uncertainty, this investment could increase, buoying demand and prices. However, foreign investors may withdraw funds if political or economic instability escalates, contributing to potential price corrections.
  • Currency Fluctuations: The value of the British pound relative to other currencies like the US dollar can influence the attractiveness of UK property for foreign investors. A weaker pound could attract more foreign buyers, pushing up prices, while a stronger pound could make investments less lucrative.


Impact of the Pandemic

The COVID-19 pandemic sent shockwaves through the global economy, and the UK housing market was no exception. While the initial disruption was immense, the pandemic’s long-term effects are still unfolding, shaping demand, prices, and lifestyle choices. Here are some ongoing and potential long-term impacts:

  • Market Freeze and Rebound: The initial lockdown in 2020 led to a near-total shutdown of the housing market. However, following the easing of restrictions, a dramatic rebound occurred, fuelled by pent-up demand, government incentives like the Stamp Duty holiday, and a shift in priorities towards homeownership.
  • Price Fluctuations: House prices initially dipped slightly in some areas but quickly rebounded, exceeding pre-pandemic levels in many regions. This uneven growth reflected changing preferences for larger homes, gardens, and suburban living.
  • Shifting Demand: The pandemic accelerated pre-existing trends like the rise of online shopping and remote work. This led to increased demand for properties in less urban areas and with more space for home offices.
  • Remote Work and Location Choice: The normalisation of remote work will likely continue, impacting long-term housing demand. People may prioritise affordability and access to green spaces over proximity to traditional office hubs, potentially driving demand in smaller towns and rural areas.
  • Changing Housing Preferences: The pandemic highlighted the importance of space, outdoor amenities, and home offices. This could lead to sustained demand for larger homes with gardens, balconies, and dedicated workspaces, potentially impacting the price structure of different property types.
  • Increased Inequality: The pandemic disproportionately impacted low-income households and renters, potentially exacerbating existing affordability issues and widening the housing inequality gap.


Expert Opinions and Predictions

The UK housing market remains a subject of debate and uncertainty, with various experts offering differing forecasts for 2024. Here is a view incorporating some prominent voices:

In an interview with the Guardian, Neal Hudson, Housing Market Analyst at BuiltPlace, stated he expects a fragmented market with price rises and falls depending on price point and location. He sees “maybe not as negative as it was looking this time last year,” thanks to falling inflation and the belief that interest rates have peaked.

Cameron Misson, Economist at Centre for Economic and Business Research (Cebr), told NerdWallet that he anticipates a “modest decline” of 2.6% in average UK house prices, followed by a “bottoming out” in the fourth quarter. This suggests a potential 4.9% peak-to-trough drop over two years.

Nationwide’s Chief Economist Robert Gardner warns of continued market volatility, stating that even if house prices remain flat in 2024, “the underlying picture could be one of significant regional and sectoral variation, with some segments of the market continuing to see falls.”


Mitigation Strategies for Homeowners

Navigating a potentially declining housing market requires smart strategies. Here’s a quick guide for each key group.



  • Track market trends: Stay informed about your local market to make informed decisions.
  • Assess finances: Evaluate your mortgage and ability to weather price fluctuations.
  • Boost curb appeal: Minor improvements enhance marketability if you consider selling.
  • Explore alternatives: Renting your property could be a smart option while the market stabilises.


Potential Buyers

  • Prioritise affordability: Stay within your budget. A buffer is crucial in uncertain times.
  • Focus on value: Seek properties with good long-term value, even if they require work.
  • Get pre-approved: Mortgage pre-approval ensures you’re on track financially.
  • Negotiate strategically: Use market data and property conditions to your advantage.



  • Think long-term: Invest with a long-term perspective to smooth out short-term fluctuations.
  • Diversify your portfolio: Spread investments across different types and locations to mitigate risk.
  • Do your research: Thoroughly research any property before investing, considering rental potential, renovation costs, and exit strategies.
  • Seek professional advice: Consult experts to understand market specifics and navigate investment decisions wisely.

Remember, staying informed, seeking professional help when needed, and remaining flexible is vital in effectively navigating a potentially declining market.



2024 will likely be a year of transition for the UK housing market. While a significant crash is unlikely, a period of price adjustments and varying regional performances is expected. Experts advise closely monitoring economic developments, interest rate movements, and government policies to navigate the market effectively.