UK House Prices To Fall Until 2025, Predicts Lloyds
The UK's largest mortgage lender expects house prices to fall this year and next before rising in 2025.
Halifax-owner Lloyds Banking Group predicts prices will drop 4.7% this year and by a further 2.4% in 2024 before recovering.
Lenders have blamed higher borrowing costs for a slowdown in house sales.
But the average house price remains about £40,000 higher than at the height of Covid when prices soared, as people working from home sought more space.
Lloyds said on Wednesday that while prices would fall over the next two years, longer term growth would be steady with prices rising 0.6% by 2027.
Interest rates are currently at 5.25%, their highest level for 15 years, driven by a series of rate rises aimed at tackling soaring consumer prices.
As a result, lenders have raised their borrowing rates, including for mortgages. The latest figures show the average rate on two-year fixed is 6.24% on average, according to financial information service Moneyfacts.
Lloyds' forecasting is based on the Halifax House Price Index, which excludes figures for cash buyers, which currently make up over 30% of housing sales.
Despite data from mortgage lenders showing falls in house prices, the average price of a home in the UK remains high.