UK Housing Market Is Past Its ‘Peak Pain’
Britain’s housing market is past “peak pain” and prices look likely to bottom out by next summer, according to the estate agency Savills.
The average UK house price is projected to fall by 3% in 2024, after a 4% drop this year, the upmarket estate agent and property advisory firm said in its five-year outlook.
Prices held up slightly better than expected in 2023, according to Savills, as mortgage markets settled over the spring and autumn months. Property values are estimated to be down a total of 7% since the autumn of last year to the end of 2023.
Savills expects the Bank of England to start cutting interest rates in the second half of 2024, reducing its base rate to 4.75% by the end of that year, from 5.25% now. The property company forecasts rates will fall to 1.75% in 2027.
Savills is forecasting a return to house price growth of 3.5% in 2025, rising to 5% in 2026, 6.5% in 2027 and slowing again to 5% in 2028.
The forecasts came as the mortgage lender Halifax said UK house prices rose last month after a run of six monthly falls as sellers adopted a cautious attitude, leading to a shortage of homes on the market.