Market Update - Were Our Predictions Right?

As we head into the last month of 2024 we consider how this year has faired and indeed how my predictions at the start of the year now look.

Posted By

Manning Stainton

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As we step into the final month of 2024, it's the perfect time to reflect on how this year has unfolded for the property market—and to evaluate how accurate my predictions at the start of the year turned out to be.

Three Key Predictions for 2024

At the beginning of the year, I outlined three major expectations for the property market in 2024. Let’s take a closer look at how they played out:

1) The Cost of Borrowing Would Fall

I anticipated that lower borrowing costs would draw more buyers into the market. While interest rates did indeed decline throughout 2024, the reduction wasn’t as significant as we might have hoped. Still, we’ve seen a general downward trend in typical mortgage rates, particularly leading up to the recent budget. The consensus is that this trend will continue into 2025, so I’d say this prediction held true.

2) Housing Supply Would Remain Constrained

This prediction might have seemed obvious, but I emphasized that limited supply would stabilize prices and likely support growth. Despite the government’s commitment to “getting Britain building,” progress has been slow.

In 2024, the UK is projected to complete approximately 230,000 new homes—falling well short of the government’s annual target of 300,000.
Over the past decade, the shortfall has accumulated to a staggering 900,000 homes, leaving us far behind the targets set since 2014.

This persistent shortage, coupled with a growing population, continues to impact affordability and availability. This prediction, unfortunately, remains very accurate.

3) House Prices Would Rise by 3% to 4%

My final prediction was a modest increase in house prices. Here’s where we stand with one month to go:

Nationwide reports a 3.7% increase.
Halifax records a 3.9% rise.
The Land Registry, though reporting with a lag, shows a 2.9% increase as of September.

Overall, it seems my estimate was spot on, and there’s a chance the final numbers for 2024 might exceed my expectations.

Looking Ahead to 2025

While it’s not yet time for a detailed 2025 forecast, there are a few key factors to keep an eye on:

The recent Chancellor’s budget introduces changes that could significantly affect employers, potentially creating ripples in the latter half of 2025 and beyond.
The global economic landscape, including the policies of the new Trump administration in the U.S., could also influence the UK property market.

I’ll share a more detailed outlook in early January, so stay tuned for that.

Thank you for following along this year, and I look forward to diving into 2025 with you. Until then, wishing you a wonderful holiday season!