Our UK Housing Chart Pack has been updated with the latest data and our analysis of recent developments.
The recent drop in mortgage rates has caused house prices to rise a bit faster than expected. As a result, we now think house prices will grow by 2.0% y/y in Q4 2024 (1.0% previously). What’s more, our forecast that Bank Rate will be cut from 5.00% now to 3.00% by the end of next year, instead of 3.50% as investors anticipate, explains why we think the average effective mortgage rate will fall from 4.84% in June to below 4.00% by the end of 2025. That’s why we think house price growth will accelerate to an above-consensus 5.0% y/y in Q4 2025, before cooling to 4.0% y/y in Q4 2026.
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