House Prices in Kent
Here we have the best breakdown of Kent house prices, with fresh information added every month.
In a change to our monthly Insight report on the UK and Kent housing market, this month we’re taking a deeper dive. Read on to learn more about predictions and expectations for the housing market in 2024, as well as a review of what’s happened in 2023. As always, we’ll take a local look at the Kent picture, enabling you to gain confidence in your house selling and buying activities over the coming months.
We’ll take a deeper look at why in the rest of this article, but it’s helpful to understand the broad expectations for the year ahead.
The accepted broad view, looking at multiple datasets and reviewing the predictions of different experts, is that a second year of falling prices is expected. However, it’s likely that the year will be split in two halves. Prices are expected to continue falling in the first half of the year with recovery in the second half as interest rates are predicted to drop.
Similarly, market activity is expected to follow this pattern too. As mortgage rates come down, affordability is likely to improve. Confidence in the market will improve too. This will see a stabilisation and more normal return to pre-pandemic levels of activity, rather than the upsurge of post-pandemic intensity.
Kim Kinnaird, Director, Halifax Mortgages summed up 2023 in the December Halifax House Price Report, saying, “In December, the cost of an average UK home rose for the third month in a row to £287,105, up +1.1% or £3,066, in November, reaching the highest level since March 2023. The housing market beat expectations in 2023 and grew by +1.7% on an annual basis. The average property price is now £4,800 higher than it was in December 2022. Whilst it’s encouraging that we saw growth in the last three months of the year, this was preceded with property price falls for six consecutive months between April and September.”
It’s worth noting that data varies here. For example, Nationwide reports that UK house prices fell by 1.8%.
However, despite these small variations, the housing market exceeded the expectations of many in 2023. Many predicted a house price crash. That’s not what we saw. Instead, we witnessed gentle declines with pockets of growth. Given forecasts ahead of 2023 predicted house price drops of between 5% and 12%, whether growth or declines were marginal shows that the market didn’t crash as expected.
Nonetheless, there has been reduced activity with reduced confidence. With the rises in borrowing costs, due to the rise in interest rates, and the cost of living crisis on the back of sharp inflationary pressure, affordability has been a pressing issue.
What we’ve witnessed in 2023 is a resilient UK housing market. The jobs market remained strong, boosting the housing market. Furthermore, stability was offered by the fact that the majority of owned homes are owned outright, without mortgage. Indeed, 35% are owned outright compared to 29% owned with a mortgage, according to the English Housing Survey. Additionally, improved stress testing rules since the 2008 financial crisis means that more homeowners than perhaps expected have weathered the increase in mortgage costs very well.
Returning to the words of Kim Kinnaird, Director, Halifax Mortgages,
“As we move through 2024, the UK property market will continue to reflect the wider economic uncertainty and buyers and sellers are likely to be naturally cautious when considering making a move. While wage growth is now above inflation, helping to ease cost of living pressures for some and improving housing affordability, interest rates are likely to remain elevated for as long as inflation remains markedly above the Bank of England’s target. Our latest forecast suggests house prices could fall between -2% and -4% during the coming year, although, as with recent years, forecast uncertainty remains high given the current economic climate.”
Again, there is some variation in predictions, as we would expect. The Halifax is at the high end of predictions. Nationwide predicts a smaller fall, and indeed says prices may simply remain flat. However, all predictions point to the first half of 2024 likely continuing in a similar vein to 2023 with small drops and subdued but bubbling activity, with a return to growth and more expected levels of activity in the second half of the year.
The good news is that the housing market is past the worst, and the worst was nothing like as bad as it was predicted to be.
Importantly, 2024 is likely to see a return to optimism in the housing market. That’s not to say homeowners and potential buyers won’t be cautious, but they will begin to feel their incomes less squeezed as interest rates drop and inflation continues to head towards the Bank of England’s goal of 2%. Experts are already anticipating up to six quarter-point interest rate cuts. Most experts predict the first cut will come as early as mid to late spring.
Towards the end of 2023, lenders like Barclays began offering lower rates on mortgage deals. This is already a growing trend in early 2024, with HSBC announcing lower rate mortgage deals. It’s likely, as lenders compete to get borrowers on board in what’s a tight market for them that better deals will continue to be announced.
Furthermore, activity is likely to increase as those who were holding off in 2023 are edged into making a move in 2024. While there are broad trends across the housing market, fundamentally, buyers make a move when they are ready. Multiple factors come into this beyond wider economic pressures, including changes to family size and job moves. Additionally, a further 1.5 million homeowners will come to the end of their fixed mortgage deals in 2024, and despite more competitive offers, it’s likely that some may opt to move as part of their response to that.
There was a clear picture in 2023 that the South East house prices fell the most during 2023, when compared to other UK regions. There was an overall drop in house prices of -4.5%. It’s likely that this picture will continue in the first half of this year.
However, the South East is a very large region and not homogenous. There are factors that affect supply and demand in smaller pockets. In our experience, property owners who have been competitive with their price are able to secure a good deal and carry out the move they want. Nonetheless, patience is required. The average Kent home on the market now takes 171 days to sell. This is up +21% from 141 days in January 2023. The good news is that there are 15% more properties on the Kent market than this time last year, pointing to good levels of activity and choice.
In terms of Kent house prices, while being in the South East, the falls are likely to be less sharp than other areas. The average Kent house price has sat quite stable for a few months, with just a small drop to £429,029 in January 2024 compared to £432,493 over the previous few months. It’s also vital to view that data in the wider picture. Kent house prices are still up 11% on 2020. As always, a broad and long-term view is needed.
We know that caution still remains and we’re here to make the moving part of the process as stress free as possible. We’re flexible, so you can be. For a quote, please call 01622 672217.