Property market bounce-back as house prices tipped to skyrocket by £45,000

Britain’s housing market is past “peak pain” and prices look likely to bottom out by next summer, according to Savills.

Lucian Cook, head of residential research at Savills, said: “Interest rates are expected to have peaked and the worst of the house prices falls look to be behind us, but the first cut to rates still looks to be some way off.

“This means continued affordability pressures are likely to result in further modest house price falls over the first half of 2024, resulting in a peak-to-trough house price adjustment in the order of minus 10 percent. The expectation of a gradual reduction in rates suggests a progressive restoration of buying power and steady recovery in demand.

“We expect growth to accelerate as affordability pressures ease, with the strongest growth forecast for 2027 when rates reach their long-term neutral level. From there we expect growth to settle at a rate broadly in line with income growth.”

Property transactions are expected to rise to 1.16 million per year by the end of the forecast period in 2028 as mortgage buyers gradually return to the market. Currently, transactions remain at around 1.01 million and may do so until next yer.

The research used data from Oxford Economics and Nationwide Building Society.

Below are the average house prices predicted by Savills by 2028, followed by the increase it predicts compared with 2023 house prices in cash terms:

• North East, £186,695, £32,940
• Wales, £239,663, £42,224
• North West, £241,944, £40,645
• Scotland, £206,850, £34,820
• Yorkshire and the Humber, £230,323, £38,692
• West Midlands, £283,954, £47,799
• East Midlands, £266,712, £43,759
• South West, £348,082, £52,797
• South East, £423,702, £60,642
• East of England, £397,060, £56,830
• London, £577,256, £70,376

The forecasts apply to average prices in the second hand property market. New-build property values may not move at the same rate.

Savills expects the

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