Leading real estate agents have cut their long-term house price growth forecasts, amid expectations that UK interest rates could remain high for an extended period of time and the Budget's measures to boost incomes.
The revised forecast for the Hamptons comes days after Halifax Bank and Nationwide Bank announced that the annual rate of growth in real estate prices is slowing, with the former predicting that “growth is likely to remain modest for the remainder of this year and into next year.” “It's very sexual,” he said.
The new market analysis is one of the first to emerge after the Bank of England cut interest rates by 4.5 percentage points to 4.75% last Thursday. The central bank's warning that last month's Budget would push up inflation strengthened the view that it would take longer for interest rates to fall.
But, he said, the Hamptons are “more expensive.” [interest] The paper predicts that the typical UK house price will be 3.5% higher by the end of this year than it was at the end of 2023. Prices are expected to rise 3% compared to the end of 2023. Prices for 2025.
The company said the property market had outperformed its initial prediction that prices would be flat this year. This “recovery” is thought to be due to mortgage costs falling faster than expected because inflation fell faster than expected.
However, the government revised its forecast for 2026 downward from 5% to 3.5%, stating that “the economy is quite lackluster, reflecting the restraining effect of rising interest rates due to tax hikes, and that the economy is heading toward improvement.'' However, from a historical perspective, it remains in a weak situation.” ”.
In addition, Hamptons said that “new-era interest rates are likely to exceed 3%” and are expected to limit home price growth.
“The combined effects of persistently high interest rates and slowing economic growth are likely to result in weaker long-term house price performance compared to previous cycles,” said Aneisha Beveridge, head of research at the estate agent. ” he said.
Nationwide said earlier this month that annual house price growth was 2.4% in October, slowing from a nearly two-year high of 3.2% in September.
Last Thursday, Halifax reported that although the average price of a house in the UK hit a “record high” of £293,999 in October, annual growth had slowed to 3.9 per cent, with the budget reaction to “Loan costs may continue to rise.” Longer.”
Some experts expect the chancellor's decision not to extend the temporary stamp duty threshold set in place by the previous government to trigger a rush to sell property early next year.
Currently, buyers of homes under £250,000 pay no stamp duty in England and Northern Ireland (Scotland and Wales have different rules). This figure has doubled from £125,000 in September 2022. The threshold amount is £425,000. First-time home buyers start from £300,000. However, these higher standards are scheduled to end on March 31, 2025 and return to previous levels.
Nationwide predicts a “surge” in home sales in the first three months of 2025, followed by a “slow period” for the next three to six months.
