We take a look at what is happening with UK house prices, including expert predictions for 2024 and the coming years, and how this will impact mortgages.
House price predictions: Quick overview
House prices are predicted to drop by 3% in 2024, but recover with growth of 3.5% in 2025.
Overall, house prices are expected to see growth of 17.9% by 2028.
House prices fell by 2.1% in the year leading up to November 2023.
The Nationwide house price index recorded a 1.8% drop in house prices in the year to December 2023, but the Halifax index recorded 1.7% growth.
The average house price in the UK stands at £285,000 as of November 2023.
Mortgage approvals were down 26% year-on-year in November 2023.
Average house prices exceed the Help to Buy ISA limit in 38% of UK local authorities and this is expected to rise to 58% by 2028.
Average prices are expected to exceed the Help to Buy ISA limit in 4 out of 5 London boroughs by 2028.
Will house prices go down in 2024?
The latest data from the ONS UK House Price Index shows that the average house price in November 2023 was £285,000, a fall of 2.1% from November 2022. The growth in house prices had been slowing after peaking at 13.8% year-on-year growth in July 2022, and now house prices are falling year-on-year.
The annual growth in house prices has been slowing over the past year, according to the ONS index, which is considered the most reliable. In November 2023, the year-on-year fall in house prices was at the fastest pace since 2011.
According to forecasts from Savills, house prices are expected to drop by 3% year-on-year in 2024. However, 2025 will see a rebound in performance, with house prices predicted to grow by 3.5% from 2024 prices.
Growth is forecast to be even stronger in the following years, with 5% growth expected in 2026, 6.5% growth expected in 2027 and 5% growth expected in 2028. Overall, house prices are expected to see growth of 17.9% by 2028.
Year
Yearly percentage change for UK house prices
2024
-3.00%
2025
3.50%
2026
5.00%
2027
6.50%
2028
5.00%
Total by 2028
17.90%
How do these house price predictions impact first-time buyers?
According to analysis from Finder, this predicted rise in house prices means that well over half (58%) of local authorities in the UK will have an average house price above £250,000 by 2028, which is the Help to Buy ISA limit.
The research analysed the average house price for first-time buyers in different areas of the UK, and forecast the growth of these prices between now and 2028 based on market predictions. This data was used to reveal where first-time buyers may be unable to use their Help to Buy ISAs to purchase the average property.
A Help to Buy ISA is a government scheme that allows people to save up to £200 a month, with the government adding a 25% bonus on savings up to the limit of £12,000 if you use the savings to buy a house. It can be used to purchase property up to £250,000 or up to £450,000 in London.
Help to Buy ISAs: UK limit is £250k
The research found that average house prices in 132 of 348 local authorities (38%) are above the Help to Buy ISA limit in 2024. This is predicted to rise to 149 (43%) in 2025, 164 (47%) in 2026 and 182 (52%) in 2027. By 2028, well over half of local authorities will have average house prices that are above the Help to Buy ISA limit.
Below, you can explore how this will affect first-time buyers with a Help to Buy ISA over time.
The Finder study also found that, by 2028, only 6 of the 32 London boroughs – could have an average house price for first-time buyers that is below the threshold for the Help to Buy ISA allowance. This stands at £450,000 in London, £200,000 higher than the rest of the UK, but
This equates to 81% of local authorities in London being priced out of the Help to Buy ISA benefits, despite the cap for properties in London sitting £200,000 higher than the rest of the UK at £450,000.
Below, you can explore how this will affect first-time buyers with a Help to Buy ISA in London.
The deadline to open a Help to Buy ISA account closed in 2019, but existing savers can continue paying £200 a month into their account until November 2029 and they can claim the government bonus until December 2030.
Nationwide and Halifax house price indices
According to the Nationwide House Price Index, there was a 1.8% drop in the average house price between December 2022 and December 2023. However, the Halifax House Price Index showed 1.7% growth year-on-year, so there is a mixed picture when it comes to house price trends.
In December 2023, Nationwide registered the average house price as £257,443, not much change from November 2023 when it was £258,557. Meanwhile, the Halifax average house price was £287,105 in December 2023, a 1.1% increase from November 2023.
These monthly house price indices are based on mortgage lending and are thought to be less accurate than ONS data.
Nationwide - Nov 2023
Halifax - Nov 2023
Average house price
£259,423
£283,615
Annual change
-2.00%
-1.00%
Monthly change
0.20%
0.50%
Are UK house sales slowing down?
Data from the Bank of England shows that mortgage approvals were down 26% year-on-year in November 2023 compared to November 2022. The housing market has slowed down due to successive hikes in the base rate, resulting in high mortgage rates. However, mortgage approvals were up 5% in November 2023 compared to October 2023.
The housing market is different in each UK region, but all regions have seen a drop in house prices in the year to November 2023.
London is the region with the highest average house price but the region has also seen the biggest annual drop of 6% in house prices in the year to November 2023. The South West has also seen a big drop in house prices, which have fallen 4.1% year on year.
Although the North East is the region with the lowest average house price, it has seen the smallest drop in house prices, which have decreased by 0.4% in the year to November 2023.
Finder used the latest ONS data to find the average house prices for first time buyers broken down by local authority in 2023.
Property market forecasts produced by Savills were then used to predict the average house price for first time buyers across every local authority in the UK between now and 2028.
Click here for more research. For all media enquiries, please contact –
Matt Mckenna
UK Head of Communications T: +44 20 8191 8806
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Emily Herring is a Publisher at Finder specialising in credit-based products including credit cards and business and personal loans. Emily has recently joined the Investments team. She has a Masters in Creative Writing & Publishing and a Bachelor of Arts in Communication & Media. See full bio
Emily's expertise
Emily has written 146 Finder guides across topics including:
Sophie Barber is a content marketing manager for Finder in the UK after previously working as a content manager at a digital marketing agency. She has over 5 years experience in writing and publishing clear, concise and informative online articles for a variety of websites. See full bio
Sophie's expertise
Sophie has written 77 Finder guides across topics including:
Publishing original personal finance research
Creating data-led statistics pages to highlight industry trends
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