Property is generally considered an investment.
But with so much at stake, it’s natural to feel stressed when house prices seem uncertain.
There have been plenty of headlines in recent years about the movement of house prices in the United Kingdom.
So, as of October 2024, is it true that property prices are falling?
Read our blog below to find out.
Are property prices falling?
Over the past year, the UK property market has fallen for the first time in over a decade. Nationwide reported a 1.1% decline in house prices.
And research by Zoopla found that house prices dropped across 80% of the UK.
This covers a range of different parts of the country:
- London prices dropped by 0.4%. This decrease was much greater in the wealthiest neighbourhoods
- Cardiff prices have fallen by 3%
- Edinburgh prices have gone down by 0.8%.
However, there are exceptions. In Belfast, there was a marginal increase in house values.
Some experts argue that property prices started to level out in the second half of 2024. And as we move into 2025, most experts predict that house prices will go back up again.
Why are property prices falling?
There are several factors influencing house prices.
Mortgage interest rates
Over the past 12 months, mortgage interest rates have been at their highest for almost a decade.
This means that mortgages are more expensive than they’ve been for a long time.
A buyer’s market
Fewer buyers are entering the market – and homeowners are forced to compromise on their selling prices.
Cost of living crisis
There’s also been a cost of living crisis. Household bills for water, energy, electricity, and more have been high.
Buyers are factoring this into their offers on properties – especially at the higher end of the market.
Loss of confidence
The above factors combined contribute to uncertainty in the housing market.
The recent change in government might also lead to some people waiting for new policy announcements before entering the market.
Where are property prices falling at the fastest rate?
There are national and more local trends for rising and falling house prices. Below is a brief overview of different UK regions’ prices.
South England
The south of England, especially London, has experienced the most dramatic fall in property prices.
The decline has been more significant where houses are the most expensive.
For example, selling prices have gone down in Westminster by 12%. And in Kensington and Chelsea, Rightmove suggests that selling prices have decreased by 19%.
And in Norwich are currently at 7% less than the previous year. And in Canterbury, selling prices have decreased by the same amount.
Meanwhile, in St Ives, Cornwall, there’s been a 5% drop this year.
North England
House prices in Hull have fallen by 6% over the most recent 12-month period.
Wales
Other parts of the UK have also experienced a significant fall in prices.
Newport in south Wales has seen its property prices fall by 7%. In Wrexham, north Wales, the average selling price has gone down by 6%.
Do experts think that property prices will continue to fall?
Most experts think house prices in the UK will level out and rise again over the next 12 months.
This is largely because interest rates have started to fall, making mortgages more affordable.
The cost of living crisis is no longer as prominent as it once was in many people’s eyes, either.
These opinions might change as the Labour government announces its upcoming budget.
Experts are still waiting to see what policies they will introduce and whether these might impact the housing market.
It’s never completely clear what the housing market will do in the future. An expert near you could perhaps give a personalised recommendation.
Is now the right time to sell a property?
There’s no right or wrong answer to this question. Your personal circumstances determine which decision is best.
IN general, many experts think property prices will increase over the next 12 months. There’s also hope that interest rates will fall, making it more affordable for buyers.
However, interest rates are still relatively high. But many economists are hopeful that these will fall further in the next six months.
And upcoming budget announcements from the Labour government might change that, depending on what they do.
Either way, looking closely at your finances and getting personalised advice from a qualified expert will help.
It’s all about your future plans, your current living situation, and how you expect your finances to progress in the next 12 months.
