We doubt the small fall in Nationwide house prices in August was the start of a renewed downturn. Surveys suggest the recent declines in mortgage rates have led to an increase in housing demand, while a significant near-term pick-up in supply appears unlikely. Together with our view that the economy will continue to grow and mortgage rates will fall further, from 4.8% now to below 4.0% next year, this suggests house prices will beat the consensus forecast in 2025. We expect a 2% rise in prices in the year to Q4 2024 and a 5% rise in the year to Q4 2025.
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