UK house price warning: Properties face double-digit drop with 'little prospect' of recovery
The average value of homes in the UK will plummet by 12 per cent by the end of 2024, according to experts
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The average value of homes in the UK will plummet by 12 per cent by the end of 2024, according to experts.
Economists warn that house prices will not rebound after the slump due to high interest rates.
S&P Global Ratings suggest there is “little prospect” of a strong recovery as mortgage owners and buyers will continue to face higher borrowing costs “for the foreseeable future”.
The US credit rating agency predicts that UK house prices will drop by 6.6 per cent this year, followed by a further 4.9 per cent next year.
The US credit rating agency predicts that UK house prices will drop by 6.6 per cent this year, followed by a further 4.9 per cent next year
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S&P then expects the market will see growth of just 1.4 per cent and 3 per cent during 2025 and 2026 respectively.
The experts warn that with higher interest rates continuing to cause mortgage holders to suffer, the pain of rate rises is still to come.
Homeowners coming to the end of their fixed rate deals are being warned the pressure “will intensify further”.
S&P said: “There is still some time to go before mortgage pain reaches its peak."
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Senior economist at SP Global, Boris Glass said homeowners were unlikely to get any relief even if interest rates began to decrease after 2024.
“Even when central banks ease again, mortgage holders and potential buyers will continue to face higher real costs of borrowing that will take a larger share out of their budget and moderate demand for the foreseeable future,” he said.
Forecasts by Moody’s credit rating suggest house prices will fall by 10 per cent until the end of 2024 due to soaring mortgage rates.
It added that the UK property sector would be the worst among big developed economies if predictions of a 4 per cent drop this year and a 6 per cent fall in 2024 occurred.
Forecasts by Moody’s credit rating suggest house prices will fall by 10 per cent until the end of 2024 due to soaring mortgage rates
PAMadhavi Bokil, senior vice-president at Moody’s, said: “We expect the Bank of England, faced with the responsibility to bring stubbornly high inflation down, to maintain a tight monetary policy stance through 2024.
"The effects of interest rates on housing demand in the UK are therefore likely to be acute and prolonged.”
Most homeowners in Britain have not yet experienced the surge in interest rates from 0.1 per cent to 5 per cent, but more than 1 million people will have to renew their loans in the second half of this year.
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