What is going to happen to house prices next year?
UK house prices are expected to rise throughout 2024, signalling resilience in the housing market. The Office for Budget Responsibility (OBR) recently updated its predictions, indicating house prices could grow by around 1.7% in 2024 before slightly slowing to 1.1% in 2025 due to rising mortgage rates. However, from 2026 to 2030, house prices are projected to increase by an average of 2.5% annually, supported by higher earnings.
In the first half of this year, house prices rose by about 3%, surpassing earlier forecasts. By 2028, the average UK house price is expected to reach £310,000, reflecting ongoing growth.
Property transactions are also anticipated to increase, rising from approximately 275,000 per quarter in 2024 to about 350,000 by the end of the five-year forecast period. Housing starts, a key indicator of new supply, are expected to improve from a decade-low of around 100,000 in 2024 to about 160,000 by 2029.
Proposed changes to the National Planning Policy Framework could further boost housing supply, helping to address ongoing shortages. Overall, while immediate challenges exist, the long-term outlook for the UK housing market remains positive.
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