UK Property Market: Look Back and 2024 Forecast

The UK property market experienced an eventful 12 months in 2023, with soaring inflation resulting in The Bank of England raising base rates to its highest level since the 2008 financial crisis and impacting mortgage affordability.

However, despite initial fears, by the latter half of the year, inflation had fallen further than anticipated – to the lowest level in two years – prompting lenders to offer lower interest rates, reopening up the market for homebuyers who held off whilst also attracting more buyers to the market.

Despite a lack of policies in Jeremy Hunt’s Autumn Statement, things are looking promising for the UK property market in terms of wider economic factors. Below we summarise what happened in 2023 and delve deep into the 2024 UK property market forecast and what we have to look forward to over the next year.

What happened in the UK Property Market?

There is little doubt that 2023 was a challenging year for the UK’s property market, with the repercussions of a disastrous “mini-budget” in 2022 becoming more prevalent throughout the year. Interest rates pushed the average mortgage rate up to highs of 6% which saw homebuyers become hesitant to enter the market. This increased caution resulted in lower transaction levels when compared to the previous year.

After the record property price growth witnessed in 2022, this cooled significantly over the last 12 months and prices began to drop slightly throughout the UK. However, Nationwide reported that the housing market is beginning to recover, with a 0.2% increase in November – the third consecutive monthly rise.

Similarly, Iain McKenzie, CEO of The Guild of Property Professionals, maintained that whilst property prices had taken a slight hit in throughout Q3, the average property price was still 25% higher when comparing September 2023 to the same month in 2019 – before the pandemic and economic uncertainty began affecting the UK property market.

Even after a drop in prices, the Office for National Statistics data revealed that the average UK property price was £291,000 in September 2023, which was £10,000 higher than in September 2022. Likewise, the South East of England recorded an 11% increase in sold prices from the 2020 peak, partly due to various urban regeneration projects taking shape in the region, and the Elizabeth Line prompting homebuyers to consider up and coming towns such as Slough as a suitable location for buying property. In fact, the region is one of our top property hotspots for homebuyers.

By the last quarter of the 2023, all regions had recorded slightly lower annual price growth, but still comparatively higher than the same period in 2022. This, paired with mortgage rates beginning to return to a more affordable rate has seen a noticeable shift towards a buyer’s market in recent months, with this expected to continue well into 2024.

Buyer Demand

Despite economic turbulence and the successive increases in interest rates impacting affordability and the wider property market, homebuyer demand remained relatively steady as the Bank of England recorded a 18.5% increase in mortgage approvals from January this year. With this being a strong indicator of homebuyer sentiment, the 8% increase in approvals between September and October alone paints an optimistic outlook for the year ahead.

This is echoed by other industry experts, particularly Zoopla, who noted a 10% upturn in demand across the UK as property price increases stabilised and mortgage rates beginning to come down.

The report highlighted London and the South East leading the way for this increased homebuyer confidence, with demand for property for sale in London up by 16% and the wider South East region at 19% – this brought demand back up to pre-pandemic levels.

Similarly, data from OnTheMarket revealed that 75% of active buyers in the UK were confident that they would purchase a property within the next three months.

Interestingly, Rightmove data noted a shift in homebuyer demands as the majority of transactions were for apartments for sale, indicating the pandemic’s “race for space” is well and truly over.

With this in mind, let’s delve deeper into a UK property market forecast for 2024?


The Rental Market

Historically, private renters tend to pay a significantly higher percentage of their monthly income than both social renters and owner occupiers.

The UK rental market also experienced excellent increases in 2023 as a result of a lack of rental properties paired with consistently high demand, with many landlords off setting any increase in mortgage costs to tenants.

According to latest figures, residential rents experienced a 5.1% increase in the 12 months to June 2023, representing the largest annual percentage change since The National Office for Statistics began collecting rental price data January 2016.

This upwards trend shows no signs of slowing, as JLL predicts that UK rental prices will grow cumulatively by 22% between 2024-2028, with Central London exceeding this with 29% cumulative growth. So, as renting becomes more expensive and property market forecasts continue to anticipate property price growth in the long run, those with a long-term outlook stand to gain more by getting onto the property ladder sooner rather than later.

UK Property market forecast for 2024

With the government successfully halving inflation, things are looking a little more stable for the UK property market as we enter 2024 than they did at the beginning of 2023.

After several consecutive month-on-month record price increases in 2022, the property market began to slow throughout this year, with many areas seeing slight decreases in property prices. Despite this, Zoopla data revealed that property prices remained well above pre-pandemic levels even in areas of the UK which saw the biggest retraction of property price growth.

Whilst we saw mortgage rates increase to highest levels seen in the last decade in response to high inflation; over the last few months the average mortgage rate has been steadily decreasing. Research showed that in July of this year, the average mortgage rate sat at 5.79%. In August, the average rate fell to 5.34% and by September, the average rate had fallen again to sit at 5.30%. This, paired with property price growth slowing down has resulted in a buyer’s market and, as such, we expect demand for UK property to remain consistent over the coming year.

Industry expert predictions for the year ahead understandably vary, however, many predictions agree that property prices are likely to decrease slightly in 2024 before recovering towards the end of the year and increasing in 2025 onwards. After freezing the base rate twice, experts are confident that the Bank of England will start cutting rates around summer 2024 which will result in increased market activity.

Savills’ latest five-year forecast sees prices falling by 3% throughout 2024 as they anticipate the base rate to remain fixed, with their latest cumulative five-year forecast now sitting at 17.9% growth.

It is important to have a long-term view of the market and to remember that how far house prices will fall hinges on the trajectory for mortgage rates and how mortgage lenders assess affordability. JLL’s forecasts predict a 3% decrease in growth next year, but their overall predictions show a 14% cumulative growth up to 2028 – 2.7% growth on average per year.

Furthermore, despite November’s Autumn Statement being slightly lacklustre for the property market, there are hopes of a cut to stamp duty which would also add a huge incentive for people to buy and stimulate the UK property market by supporting demand.

London Property Market Forecast

Historically, London’s property market has always been strong, and UK property market forecasts agree that the property prices will remain stronger in London than in other parts of the UK.

Data from Zoopla’s September House Price Index revealed a 16% upturn in demand for property in London across all regions of the UK over the last few weeks, whilst demand for property in the wider South East region up by 19%, bringing buyer demand in line with pre-pandemic levels.

Looking a bit further ahead, the portal’s November House Price Index revealed that while higher mortgage rates have negatively impacted buying power, this hasn’t contributed to the price falls in London. In fact, property in London experienced a lower fall in prices than the rest of the South East, in part due to a greater value for money and a reduced dependence on economic factor and a higher portion of international buyers in the Capital.

Traditionally, the property market in London is extremely resilient and is a relatively safe investment. So, despite property prices declining in the UK, in London, house prices fell by 3.8% annually compared to the UK average of 4.7% in the third quarter of 2023.

With new property sales beginning to pick up again, it’s London that has rebounded more than the rest of the UK property market, according to Zoopla. Things are looking positive for the Capital, with JLL predicting Central London property prices to rise by 19.8% cumulatively between 2024 and 2028 – higher than the 14% for the UK property market as a whole.


Overall, it seems many UK property price forecasts agree that there will be some improvements to housing affordability for homebuyers throughout 2024, with interest rates beginning to drop, property price growth set to slow and buyer demand remaining strong despite external economic factors.

With mortgage rates beginning to fall and more affordable mortgage offers coming back onto the table, schemes to help homebuyers get onto the property ladder and sustained homebuyer confidence; there is still plenty of opportunity for first-time buyers and home movers to buy property and reap the financial rewards in the years to come.

Similarly, with rental demand and prices following the same upward trajectory throughout 2023, property investors are presented with a prime opportunity to yield a healthy return on their investment. With rental demand remaining high, and industry expert forecasting further increases, 2024 is a great time to invest in buy-to-let property.