Savills says UK property prices return to growth in 2025 as interest rates fall
Savills expects the Bank of England to start cutting interest rates in the second half of 2024, reducing its base rate to 4.75% by the end of that year from 5.25% now. The property company forecasts rates will fall to 1.75% in 2027. Savills is forecasting a return to house price growth of 3.5% in 2025, rising to 5% in 2026, 6.5% in 2027 and slowing again to 5% in 2028. https://www.theguardian.com/money/2023/nov/08/uk-housing-market-is-past-its-peak-pain-declares-savills
The forecasts came as the mortgage lender Halifax said UK house prices rose last month after six monthly falls as sellers adopted a cautious attitude, leading to a shortage of homes on the market. The average price of a property rose to £281,974 in October, up by 1.1% from September, an increase of almost £3,000 and the first time prices have gone up since March. https://www.halifax.co.uk/assets/pdf/october-2023-house-price-index.pdf
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Andrew Chow, Sales Manager of Century 21 Goodwin, said that a property investor should consider buying an off-plan property complete in 2025 or the year after due to the expected mortgage drop and house price increase. There are more favourable units available before the market goes wild again. The most advantageous and price-attractive unit is always available at the first released price list.
"Don't wait to buy real estate. Buy real estate and wait."
For a mortgage plan in the future, you may consider a short-term fixed rate or tracker due to the expected cutting of interest rates. Please consult a mortgage broker for the latest update on your mortgage. We can also introduce you to some brokers based in Hong Kong.
The property price indication mainly applies to the second-hand market. New-built property prices keep going up due to a forecasted significant imbalance in housing supply and up-trending construction costs. You may refer to the UK House Price Index from Land Registry UK:
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