Rents will rise and house prices will fall in 2024 prediction

Rents will rise and house prices will fall in 2024 prediction

10:11 AM, 27th November 2023, About 5 months ago 4

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A market forecast for the sales and lettings markets for the next two years reveals that tenants will see rents rise and landlords and homeowners will see their property values fall.

The forecast leading estate agency Chestertons has looked at the economic outlook for 2023, along with the interest rate hikes, and the supply and demand imbalance of homes to determine what is in store.

According to Chestertons, rents have increased by 6.5% across the UK and by around 8% in London this year.

The agency attributes this growth to an imbalance between a limited supply of new rental properties coming to the market and a growing population of renters.

Rents are likely to rise further

Chestertons says that rents are likely to rise further over the next two years as employment remains high and competition for rental properties is sustained.

However, the agency expects more supply to come to the market as rising yields have started to encourage more landlords back into the market.

The private rented sector (PRS) will also see more homeowners who are struggling to sell put their homes up for rent.

That will, Chestertons forecasts, deliver a 5% increase in rents across the UK and London in 2024.

However, rent rises will drop to 3-3.5% in 2025 as the accumulation of new supply begins to soak up demand.

House prices dip by 3% across the UK

Chestertons also reports that UK house prices dipped in 2023 for the first time in 10 years as the cost of borrowing soared and fewer people chose to move.

By the end of this year, the agency anticipates that house prices will have fallen by -2% in London and by -3% across the UK, suggesting a slowing down in the market rather than a notable correction.

House price growth over the last decade has been driven by ultra-low interest rates that made mortgages – and therefore home ownership – more affordable.

Reflecting the sluggish economic outlook, Chestertons projects that house prices over the next two years are similarly subdued, although any interest rate cuts or tax incentives could quickly change this.

It is forecasting that UK house prices will experience a slight decline of -0.3% over 2024, while London prices will show growth of 1.8% due to the higher number of cash buyers that are less affected by the higher interest rates.

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Easy rider

10:41 AM, 27th November 2023, About 5 months ago

Rents will rise every year whilst inflation remains above 0% and landlords continue to be targeted by government and Locsl Authorities. Why wouldn’t rents rise?

House prices will fall because they are too expensive given the current interest rates for mortgages. Houses always cost as much as people,e can borrow.

Demand for housing will also be strong until we get a government that is prepared to tackle mass immigration. With fewer people able to afford to buy (until prices fall), demand for rental properties will remain strong.

The PRS may be unrecognisable after a year or two of a Labour-led administration.


13:46 PM, 27th November 2023, About 5 months ago

Reply to the comment left by Easy rider at 27/11/2023 - 10:41
The PRS is definitely being moved to the point where the smaller/non-professional/accidental landlord will soon find it unprofitable and too much hassle to remain in the sector. This will leave the field clear for large portfolio and corporate landlords, and BTR. It's what Osborne always intended when he introduced S24.

When that happens, the likes of shelter will become redundant because they will be powerless in the face of a large, corporate private rented sector, with government influence, and the legal ammunition to fight local authority licensing schemes.

I've done my 25 years as one of the little guys, and am glad I won't be part of the future of the PRS.

Reluctant Landlord

13:47 PM, 27th November 2023, About 5 months ago

I can't see how they think homeowners looking to sell will want to then rent the property out. That's already an option so why not a surge in property to rent now?

Reasons for selling do not automatically move to reasons for letting! Death, divorce, downsizing, emigration, equity release in general, care reasons...sometimes you just want/need to sell to release cash.

Stats might find those properties currently for sale ARE in fact existing landlords wanting out!

Neil Robb

22:24 PM, 27th November 2023, About 5 months ago

It might be because interest rates and costs have gone up. And will stay up for many years to come.

House prices fall but will rise eventually.

Bank of England said recently interest rates won't be going down any time soon.

Then you have legislation taxation from government .

Shelter generation rent acorn tenants union all demonising landlords . Making things worse.

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