The UK estate agency market is poised for a slight contraction in 2024, largely influenced by ongoing market uncertainties and fluctuating interest rates.
- From 2021 to 2022, the sector saw a significant growth of 13.9%, but this momentum dwindled to a mere 1% increase in the following year.
- The market size, which was £15.325bn in 2023, is projected to decline modestly by 0.4% in 2024.
- Despite these challenges, early signs of recovery are noted with potential interest rate cuts boosting market sentiment.
- The forecast for 2025 suggests a market resurgence, culminating in a 0.8% increase, potentially exceeding pre-rate rise levels.
The UK estate agency sector is set to experience a contraction in 2024, driven by ongoing market uncertainties exacerbated by rising interest rates. This revelation comes amidst a backdrop of fluctuating growth rates in recent years. From 2021 to 2022, the sector enjoyed a robust growth rate of 13.9%, indicating a period of significant expansion. However, this rapid growth curtailed in the subsequent year, with only a 1% increase in 2023, leading to a market size of £15.325bn.
The slight downturn projected for 2024 reflects a 0.4% decrease in market size, bringing it down to £15.265bn. Despite this anticipated contraction, there are budding signs of recovery within the market. Notably, the year 2024 has been marked by an increase in mortgage approvals and house prices, trends attributed to the initial cuts in interest rates since 2020. Indications of further rate reductions before the year’s end are enhancing market sentiment.
Adam Day, head of eXp UK, provides insight into the sector’s dynamics, emphasising that, while a retraction is expected, it does not signify the severe correction that some had anticipated. “2024 has already proved to be a far more positive year, with buyers returning with greater confidence and house prices starting to show signs of positive growth,” Day comments. This growing confidence among buyers is instrumental in reversing the downtrend observed in recent years.
Looking ahead to 2025, projections suggest a market size increase to £15.389bn, which would represent a 0.8% rise from 2024 levels. This would place the sector 14.5% above the 2021 levels, achieved before the onset of rising interest rates. Such a rebound suggests that the foundational strengths of the UK housing market remain intact, with the potential for recovery following short-term turbulences.
As the UK estate agency sector navigates through 2024, early signs of recovery augur well for a robust rebound in 2025.
