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Major UK mortgage lender forecasts dip in house prices for the next 2 years

Major UK mortgage lender forecasts dip in house prices for the next 2 years

Posted on October 30, 2023   |  

Lloyds Banking Group, the owner of Halifax, predicts a 4.7% drop in house prices for this year, followed by an additional 2.4% decrease in 2024.

The housing market slowed down due to increased borrowing costs, a factor lenders attribute to the deceleration in house sales.

Despite recent declines, the average UK house price remains roughly £40,000 higher than during the peak of the COVID pandemic, when the surge in remote working fueled demand for larger homes.

Lloyds expects that while prices may dip over the next 2 years, long-term growth will be stable, with prices projected to rise by 0.6% by 2027.

Presently, interest rates stand at 5.25%, the highest in 15 years, as a response to a series of rate hikes aimed at curbing surging consumer prices. 

Consequently, lenders have increased their borrowing rates, including mortgage rates. 

The latest data reveals that the average interest rate for a 2-year fixed mortgage is 6.24% on average. 

According to the UK House Price Index, the average property price in August was £291,044, showing minimal change from the same time the previous year.



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