Investments

Houses To Go Up By £94K! Is Now a Good Time To Invest in Property?

Ruby Layram 20th May 2024 No Comments

Reading Time: 5 minutes

A recent report by easyMoney revealed that house prices in 10 areas of the UK will increase by as much as £94,000 by the end of 2024! For some homeowners, this means that the value of their home could go up by 20% – a pretty good return!

But, what does this mean for people who are looking to invest in property?

House prices have been relatively stable for the last year or so, with slight fluctuations here and there. The upward predictions for the end of 2024 and 2025 could mean that now is a good time to invest in property. However, it’s never wise to jump to conclusions!

Here, we will take a closer look at whether or not now is a good time to buy property in the UK.

How has the UK housing market performed in 2024 so far?
10 areas of the UK that will see house prices go up by as much as £94K
Is now a good time to buy property in the UK?

How has the UK housing market performed in 2024 so far?

For the most part, 2024 has been a relatively stable year in the housing market. Prices fell by -0.2% in March but have seen an annual growth rate of 1.6%.

These numbers are pretty small and probably won’t have affected the value of your home too much!

The annual growth is most likely due to mortgage rate cuts, which sparked a lot of buying activity at the start of the year. However, it seems like mortgage rates have since returned to normal, which could explain the slight drop in prices during March.

Nevertheless, the number of people buying houses is certainly on the up. Zoopla recently shared that property sales are up by 12% more than 1 year ago.

A lot of people are anticipating interest base rate cuts later this year, which could reignite borrowing activity. When interest rates go down, mortgages become more affordable which leads to more people buying houses.

With prices slowly creeping up, the value of property in the UK is expected to grow significantly by the end of this year. Some areas may even see the value of houses go up by more than 20 per cent!

10 areas of the UK that will see house prices go up by as much as £94K

It goes without saying that some areas will be hit by the prices increases harder than others. In fact, 10 cities in the UK have forecast increases of over 20%.

Here are the 10 places where homeowners might see up to £94,000 added to the value of their property.

Melton – 16 per cent
Cumberland – 16.3 per cent
West Lancashire – 16.8 per cent
West Lothian – 17.1 per cent
West Dunbathonshire – 17.4 per cent
Bolton – 17.6 per cent
Derbyshire Dales – 17.8 per cent
Tewkesbury – 18.2 per cent
Hinckley and Bosworth – 20.1 per cent
East Renfrewshire – 23.2 per cent

So, it’s good news for homeowners in these 10 UK cities!

Is Now a Good Time to Invest in Property in the UK?

2024 house price predictions suggest that now might be a pretty good time to invest in property. After all, it’s not every day that you come across an investment opportunity that is predicted to generate such large returns!

However, deciding whether or not an investment is worth it comes down to more than just market predictions.

Let’s take a closer look at whether or not now is a good time to buy property in the UK.

Mortgage rates are lower than last summer

One key factor to look at when deciding whether or not to buy property is mortgage rates.

Higher rates can make it more expensive to take out a mortgage which could harder to get on the property ladder.

Luckily, current mortgage rates are lower than this time last year. The current rate is around 5.75% whereas last summer it was 6.86%.

If the rate of inflation continues to fall, some people believe that rates could go even lower – potentially dropping below 5%!

However, there is no knowing when this could happen and it is almost impossible to time the market correctly.

The rising cost of living

It is no secret that the cost of living in the UK keeps going up!

On one hand, buying a property could result in lower monthly payments than you might currently spend on rent. Which could free up some extra cash!

However, on the flip side, investing in property is a huge financial commitment. You should make sure that you have a substantial emergency fund before putting all of your savings into a house deposit.

With living costs so high, having emergency funds is more important than ever!

Furthermore, rising costs of living could make it more difficult for people to buy. This would lower the demand for housing which could potentially put a strain on house prices.

Pessimistic price predictions

Although many forecasts predict growth in the housing market this year, we can’t ignore the less optimistic forecass.

For example, Lloyds recently shared a report in which the banking giant suggested that house prices could fall by 2%-4% in 2024.

This is due to inflationary pressure and mortgage rates.

Lloyds isn’t the only industry voice to share a pessimistic price prediction. Therefore, it is worth conducting your own research and reading a variety of expert insights before making a decision.

It seems that the search for the perfect market conditions to invest in property is never-ending! Although some experts have shared positive outlooks for house prices in 2024, it is important to understand that there is no guarantee that the value of your investment will go up.

Investing in property comes with inherent risk. Make sure that you have sufficient funds in your emergency savings before making any decisions.

Jasmine says: the founder of MoneyMgapie.com, Jasmine Birtles, adds a note of caution when it comes to looking at property as an investment. “There are a lot of costs associated with property,” she warns, “including repairs, fees to lettings agents if you rent it out, increasing red tape involving tests and certificates every year and now yet more fire-proofing legislation. You might think that you can get a certain amount of income from a property but once you have taken out all these costs it can be depressing to see how little you have left!

“It is also an investment that varies considerably depending on where you buy and what you buy. For example, small flats in the middle of the city are not shifting particularly well at the moment, particularly if they don’t have outside space. Whereas family homes in a leafy suburb near a good school are going like hot cakes. So keep this is mind when you are calculating how much a property could go up in the short and long-term.”

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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.