Guessing Property Prices in 2024

We have repeatedly said that making property price guesses for the coming year is a complete waste of time. We have also continued to make these guesses and commit them to this blog. Like a moth to a light bulb, it is difficult to resist.

Seeing as we made a guess this time of year in 2022, let’s at least review it and of course make another utter guess for the coming 12 months in 2024.

Here’s last year’s guess from this blog:

By the end of 2023, the UK market as a whole should be slightly up in nominal terms (1-2%) but of course this is a fall in real terms as inflation will outpace this nominal increase.  Variations on this will occur across the regions of course and some city centres could put on 5-10% whilst some more rural or suburban areas which have been hot lately in the "race for space" drop back a little by the same amount. 

How did we do? Our longer term (5 & 10 year) predictions have been very reliable, but the 12 month guessing still eludes us. Here are the results:

Land Registry: - 0.2%

Halifax: -1%

Nationwide: -2%

So, 2-3% adrift and completely off in terms of direction. That said, our utter guess was not as far off as the experts like the OBR, Knight Frank, Savills, Capital Economics and the like. The typical falls they predicted in 2023 were around 10%.

How about our claim about city centres and rural areas? There’s the ability to exercise some fudging here as it is a vague prediction. That said cities like Manchester, Liverpool and Leeds all put on 3-5% last year whilst rural Cornwall and commuter hotspots like Brighton dropped a similar 3-5%. Let’s get a point for that one, although it was quite an obvious guess to make given the return to cities after covid.

2024

So let’s make our utter guess for next year. First we need to look at what the experts are saying so we can avoid following them and getting it completely wrong like they always do:

OBR - minus 4.7%

Knight Frank - minus 4%

Capital Economics - minus 5-6%

Savills - minus 3%

Zoopla - minus 2%

Rightmove - minus 1%

You can only imagine the time and money that has gone into paying the experts above to come up with their guesses which all look suspiciously similar. But this year there is a new kid on the block in this guessing game and I like the cut of their jib.

With what must be a healthy sense of humour, the insurance comparison website Go Compare have weighed in and started to make house price predictions. And why not, they have a dartboard to throw at and make utter guesses just as much as the highly-paid property experts. Here is their prediction:

If mortgage rates stay the same as now = increase in house prices of 5.92%

If mortgage rates drop 1% from now = increase in house prices of 10.5%

There is so much to like in this guess. Firstly, they are clearly trolling Capital Economics and giving their predictions now to an accuracy of 2 decimal places - I love that. I also like the fact they are breaking free from the groupthink of the experts for 2024 and I have to say I agree with them in terms of direction. They are right to point out that the performance next year will be highly interest rate sensitive.

Given the current outlook for interest rates, I will make the assumption that the base rate will fall 0.5% to 1% over the coming year. Therefore, taking inspiration from Go Compare, I will go in the mid-range of their guesses. And so here it is, our guess for 2024 UK Average House Price Growth:

Ish.