But predictions do vary.
Estate agent Knight Frank has said it expects property prices to fall 4pc in 2024, while Savills, another estate agent, projects prices will fall 3pc. Zoopla, the property website, is more conservative, estimating house prices will fall 2pc.
Rightmove predicts a modest average fall of 1pc in new seller asking prices in 2024.
Rightmove’s Tim Bannister said: “This reflects our prediction that it’s likely to be another muted, and in parts challenging, year for some buyers and sellers in 2024.”
Mortgage rates to continue falling
Borrowers have had a tough time in 2023, but the latest data from financial analyst, Moneyfacts, shows mortgage rates have fallen for the fourth consecutive month.
You can now get a two-year fix below 6pc, down from their peak in the summer (6.85pc in August), while average rates for a five-year fix now stand at 5.55pc.
Further findings show product choice has also increased to 5,694 options, the highest level of availability for 15 years.
Rachel Springall from Moneyfacts, said: “Fixed mortgage rates have continued to drop across all loan-to-values (LTVs), month-on-month, on two-year and five-year fixed terms. It is hoped the fixed-rate cut momentum continues into 2024.”
Pantheon Macroeconomics says it expects mortgage rates to fall further and faster than previously forecast, with rates on mortgages at 75pc LTV heading back below 4pc by the end of 2024.
This, if it happens, will offer a big boost to borrowers.
Karen Noye, mortgage expert from Quilter, said: “The Bank may begin to feel confident enough to start reducing interest rates in the second half of next year, and some borrowers would benefit as a result.
“Those on a variable rate or tracker mortgage would see a fall in their monthly bills. And, if inflation continues on its downward path, those looking for a fix may also find they are able to secure better deals, as these rates are based on future market predictions.”
How will falling mortgage rates affect property prices?
But while further declines in mortgage rates would ease affordability, issues still remain.
Mr Gardner said: “A rapid rebound [in house prices] still appears unlikely.”
This is a view shared by Nathan Emerson, chief executive of trade body Propertymark.
He said: “While there are indications a turning point may be on the horizon, the dust needs to fully settle. Andrew Bailey, BoE Governor, recently suggested there will be no quick drops in the Bank Rate for the foreseeable future to keep inflation in check.
“We remain optimistic the entire UK housing market will steadily gain traction, but it’s unlikely to be a quick process.”
Property data firm, Acumen, adds that despite some cause to be positive about the economic progress we have made through 2023, we haven’t turned the corner yet.
Andy Sommerville from Acumen, said: “Those macro-economic conditions, particularly the likelihood of very high borrowing costs for some time to come, mean sustained growth may still be a way off.”
If you’re a first-time buyer
Given that mortgage rates have stuck around 5pc – even though house prices have fallen less than expected this year in 2023 – purchasing a property still remains relatively expensive.
Ms Noye said: “Prices remain significantly elevated compared to pre-pandemic levels. Coupled with interest rates, which are expected to stay higher for longer, harsher stress tests on mortgage affordability, and inflation eating away at deposits, this will all reduce first-time buyer spending power.
“As a result, this group will continue to struggle with affordability.”
That said, if house prices do fall further in 2024, we may see more of a “buyers’ market” emerge.
This would almost certainly be the case if interest rates remain high and more people are forced to list their properties. In this scenario, we could see a surge in stock at a time of limited demand.
Ms Noye added: “This would be a positive for first-time buyers.”
At the same time, those looking to take the first step may also be able to take some solace from the fact mortgage rates are falling.