5 Reasons UK Housing Market Going to Crash In 2024

Assorted-color Wall Paint House Photo

London (Parliament Politics Magazine) – Many people are concerned about the possibility of a meltdown in the home market in 2024. The collapse of the market, often known as the bursting of the housing bubble, may have far-reaching effects, including a decrease in economic activity and potential unrest. Because of this, it’s hard for people in the UK to discover their ideal house. We will discuss the general trends we anticipate in the UK real estate market and why will the property market crash?

Reasons Behind why will the property market crash

Since the market may show various combinations of these qualities without crashing, predicting the next housing catastrophe is challenging. These symptoms, when accumulated, are usually an indication of a weak market. However, economists often miss a bubble’s signs until it bursts.

Many of these traits fit the current market, yet analysts haven’t labelled it a housing bubble since it doesn’t fit all the conventional ones.

Rising Market Prices

Stock levels are often managed according to supply and demand. Federal laws and initiatives may alter the forecast for house prices, making analysing housing market trends more difficult.

Government control decreased mortgage rates during the COVID-19 epidemic, for instance, to allay concerns about a housing bubble. In principle, this would have reduced housing costs, but in practice, it resulted in the following:

  • Caused a housing shortage despite rising demand 
  • raised the cost of housing

Since prices and demand were rising despite limited stock, the Federal Reserve raised interest rates to slow down the economy. The annual increase in housing prices was 14% in April of 2022.

Low Housing Supply

Between 2020 and 2021, house affordability fell by 21%. The biggest year-over-year drop since 2013. 2021 affordability was 20% lower than in 2013.

Affordable housing is competitive. Home flippers and others seek bargains, pricing off low-income citizens. House sales rise with home prices. It’s a buyer’s market for costly properties and a seller’s market for cheap ones.

Subprime Loans

Predatory lending and subprime mortgages describe the unethical practice of providing money to those who can’t repay it. Although predatory lending is against the law, quantifying its prevalence in the housing market remains challenging.

High Cost of a Mortgage

In response to rising inflation and other economic concerns, mortgage rates have increased. The Federal Reserve is responsible for establishing national interest rates and assisting with regulating the value of the U.S. currency. The Federal Reserve will start increasing interest rates in August 2022 to slow inflation. But mortgage rates rise when the Federal Reserve raises its rates.

We see a 44% rise in 15-year fixed mortgage rates from March 2021 to March 2022 and a 48% increase in 30-year conventional mortgage rates from April 2021 to April 2022. This is the highest increase in each category compared to last year, so watching for a slowdown in the year’s second half is crucial. When compared to the height of the financial crisis in 2008, both rates are still at historically low levels.

Low Housing Supply

Extreme demand results from little home supply and high borrowing rates and costs. There is a limit to how high house prices can go until individuals are no longer able to afford them, at which point the market falls as prices fall and the housing bubble bursts.

Since the beginning of 2022, the supply of new houses has surged by 48 per cent. If this trend continues, it might mean that a home market meltdown is not imminent.


when will the property market crash uk? In 2024, high property prices and trouble qualifying for mortgages will be the housing industry’s primary challenges. And why will the property market crash? The UK government is expected to raise interest rates to counteract rising inflation. Because of this, mortgage rates will increase. The home market might collapse if this occurs with other risk factors like inadequate inventory.

Beth Malcolm

Beth Malcolm is Scottish based Journalist at Heriot-Watt University studying French and British Sign Language. She is originally from the north west of England but is living in Edinburgh to complete her studies.