The UK’s biggest mortgage lender, Lloyds Banking Group via its subsidiary Halifax Bank has suggested that property prices are likely to continue to fall for another two years and only turn in 2025.
Halifax forecasts falls of 4.7% in 2023 and a further 2.4% in 2024. That’s a compounded fall in 2 years of over 7.21%.
Goven the average house value in the UK is over £290,000, that’s an average fall of nearly £21,000 but given that house prices are on average still £40,000 than at the height of the covid-19 pandemic, after the post pandemic surge, this means many home owners will still be in positive territory.
The forecast is no surprise given Bank of England base rates are still at 5.25% pa with the average mortgage lending rate at 6.24% pa for a two-year fixed rate deal.
Commentators are forecasting interest rates to remain higher until the summer or autumn of 2024, so it is no surprise that lower mortgage rates and therefore property prices will not increase until 2025.