Why you shouldn’t sell your house in 2024

Despite the property market beginning to show signs of recovery it still may be worth holding off before selling your house. Sales are expected to fall by 4pc this year, according to estate agency Savills, before rebounding in 2024 and remaining broadly flat until 2027. 

It is a slow recovery, but a far cry from the cataclysmic predictions seen in the wake of Liz Truss’ 2022 mini-budget that sent interest rates soaring. 

Savills predicted that prices would fall by 10pc over the year. Yet the the dire predictions did not come to pass.

Average house prices instead fell by roughly £3,000 in 2023, according to lender Halifax, in defiance of earlier predictions of a double-digit drop. 

The market’s lowest point was across August and September when recorded prices were 4.5pc below where they had been the year before. The housing market is expected to remain slow but stable over 2024. Halifax predicts house prices will drop between just 2pc and 4pc over the coming 12 months. Nationwide predicts house prices will record another small decline in “low single digits” or remain broadly flat over the course of 2024. HSBC too has said it was revising its house price forecast, saying “we no longer see any further falls from here”.

Good news, but it doesn’t mean we are returning to a pre-pandemic market. Interest rates on fixed rate mortgages, while falling, are expected to remain around 4 to 5pc until the Bank of England opts to reduce its bank rate. 

But what do buyers and sellers need to know about the housing market in 2024? And is it worth selling if prices are likely to pick up again next year?

“The economic backdrop has improved. People are now not looking at whether we have a rate cut, it is more how many rate cuts,” says Tom Bill, head of UK residential research at Knight Frank. 

Currently the rate is 5.25pc where it has been held since August after 14 successive rate rises starting in December 2021.

Almost half (around 45pc) of today’s homeowners with fixed mortgages are on rates agreed before the Bank Rate started and are likely to face a sharp increase in their payments when they go to refix. 

Amid high inflation and an uncertain economic backdrop this is likely to continue putting downward pressure on prices. 

However, with rents rising – up 8pc in October – Halifax has found that first-time buyers are still opting to get on the ladder while adjusting their expectations of what they can buy to take into account the higher cost of borrowing. 

Market activity remains stable

Despite market conditions, life events continue. Marriages, divorces, births and deaths all mean houses need to be bought or sold, keeping the market ticking over – albeit at a slower pace. 

“I don’t think house prices are a good overall barometer of the market,” says Bill. “The pulse is transactions and I think transactions will pick up.”

Bill is not alone in his more optimistic outlook. 

“There are a lot of first and second-time buyers who are starting to look, particularly now there is a bit more confidence that mortgage rates have been repriced and more competitive than they were three months ago,” says Alex McNeil, partner at Bramleys estate agency. 

“I’m not sure we will see great capital growth but I am optimistic that the market will be okay.”

However, we are still a far cry from 2020 and 2021 when, amid a stamp duty holiday, buyer demand pushed house prices to rise by nearly 20pc over the period. 

“Up to around 12 or even nine months ago you could sell anything at a pretty punchy price,” says James Farrance, associate director at estate agency Braxtons in Maidenhead. 

“And now it’s a case of ‘let’s put it on the market with something more sensible’.”

So what can you do if you need to sell in a slow market, or should you hold off selling all together until the market has more energy? 

The key is that if you can sell then you are in a good position compared to others in the market, suggests Andrew Goodwin, chief UK economist at Oxford Economics. 

However, it will be tricky if you are trying to upsize and use a mortgage to bridge that gap with the increased cost of borrowing. 

“People refinancing might face a 300 basis point rise rather than 400 point rise, as rates have come down, so the debt refinancing costs are still higher,” says Goodwin. 

For those looking to downsize, who may even be mortgage free, the market is more advantageous but the critical issue will be finding a buyer for a price you are happy with. 

Preparing to sell your home

Whatever your position, those looking to sell in the next 12 months will benefit from remembering the fundamentals of selling property, says McNeil. 

“It is the traditional thing which is to make sure your house is well presented and priced correctly when you go on the market,” he says. “Buyers will now ignore the few houses that are on the market at unrealistic prices and particularly in the average areas. So it is important to get your price right from the start.”

In order to get a good idea of what your property will be likely to sell for, have a look around your area. Are there similar properties on the market? How long have they been on for? Can you find a property that has had a successful sale recently and get the final price?

All this is useful information when setting your own expectations. And if you are using an estate agent, ask them for an honest guide price rather than the one you are hoping to achieve. It will likely save disappointment further down the line.

Once you have settled on a price, presenting your house well is important, says Farrance. Focus on making it look “nice and fresh”, with lots of light. 

And from a practical perspective do everything you can to get yourself ready for a sale. 

“If you are preparing for a move later in the year, start to look at your paperwork now. 

“Where are your deeds, where are your mortgage documents? Some sales are held up at the conveyancing stage because documents are with solicitors that they dealt with 20 years ago and aren’t there any more,” advises McNeil. 

Should you sell? 

If you are in a position where you would like to sell but don’t necessarily need to now, should you take the jump or bide your time?

“I would always suggest it if you are looking at it from a sheer investment point of view,” says Farrance. “If you are downsizing now is perhaps a good time to sell, but if you are upsizing could you sit and wait to see if there is a contraction in the market?

“If you are in a two-bedroom terrace that may be your first or second home purchase. When you look to move, maybe after having children, to a three or four bed, that is costing you another quarter of a million quid now.  If you save £20,000 by waiting six months then why not?”