Is the worst behind us? Reasons for confidence in house price growth

As we enter the second half of the year, there are signs that the widely recognised pressures on the housing market are bottoming out.

Perhaps recovery and real growth will be stalled a little by the general election and any consequent fallout, but we are now in the period when many commentators have predicted the Bank of England will most likely make base rate cuts.

Coupled with the headline rate of inflation falling, any lowering of the base rate will help to stimulate market demand through a progressive restoration of buying power and confidence.

The horizon over the next five years is looking strong with some commentators looking at price growth of around 20% by 2028.

Savills, for example, has forecasted a return to growth of 3.5% in 2025, rising to 5% the year after, and continuing upwards from then on.

This improved outlook comes amid indicators that the housing market performance so far this year has been stronger than some commentators predicted.

Average values were up 1.1% in the first three months of 2024, with expectations of price rises averaging 2.5% in the year overall.

Not only are fixed-rate mortgage costs lower than we anticipated at this stage, with several lender cutting their rates since the start of 2024, but they have also been much less volatile.

While borrowing remains expensive and many investors and home movers are waiting until the base rate drops, for those with funds to invest, now would be the time to strike before activity returns to the market later in the summer.

Here at Chinneck Shaw we maintain a list of investors who are looking to add to their portfolio. If you would like to be added, or simply want to let us know you are looking, please contact us at 02392 826731 or Hello@chinneckshaw.co.uk.

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