• Experts are divided on whether house prices will rise or fall by the end of 2024
• 2 in 5 experts believe that house prices will increase by up to 2.5% by the end of the year
• 1 in 5 are expecting a much more dramatic drop between 5% and 7.5%

01, February, 2024, LONDON –

Out of a panel of experts, 4 out of 10 believe that house prices will rise by up to 2.5% by the end of 2024, according to new research conducted by personal finance comparison website, finder.com.

Finder brought together an expert panel of academics, economists, mortgage and savings experts, to ask them for their predictions on what will happen to the base rate for the rest of 2024, and the impact this will have on the UK housing market and wider economy.

The experts were split 50/50 on whether house prices will rise or fall in 2024, with 5 of the 10 experts predicting a rise and 5 predicting a fall.

4 of the 10 experts believe that house prices are set to rise by up to 2.5% in 2024, whereas 1 expert is expecting house prices to rise between 2.5 and 5%.

Those predicting an increase believe that 2024 will be a tale of two halves when it comes to house prices. David McMillan, professor in finance at the University of Stirling, said that due to factors such as the cost of living crisis and high inflation, “the first half of the year is likely to see a continued sluggish market and modest price falls”. However, he notes that this could begin to turn around towards the second half of the year. He explains that “assuming no major external shock, with inflation falling towards (but not reaching) 2% and interest rates declining in the second half of the year, this is likely to see an uptick in the housing market, combined with falling mortgage rates”.

George Sweeney, deputy editor at finder.com, agreed that if the base rate starts to come down in the first half of the year, the positive ramifications of this should start to filter through during the second half, lifting house prices even if only slightly. He commented that “there’s not really much negative momentum in the housing market other than interest rates and lenders are already competing to lower rates in anticipation”.

David Hollingworth, associate director at L&C Mortgages, echoed the sentiment, he explained that the “lack of supply has already seen prices hold up more strongly so any uptick in activity should make for a soft landing and even some slight increases in prices”.

However, the panel was not totally unified in their predictions for growth in the housing market this year. In fact, 2 of the 10 experts believe that house prices are set to fall by up to 2.5%, and a further 2 think house prices will fall more dramatically between 5% and 7.5%. Just 1 expert out of 10 believes house prices will drop further than this, predicting a fall between 7.5% and 10%.

Kate Steere, editor at finder.com, believes that house prices will come down by up to 2.5%. She explained that, “at the beginning of the year we’re likely to see some modest price falls as affordability remains an issue and confidence is still lacking”. However, she also noted that, “assuming rates do start to come down at the mid-year point, I think we’ll start to see an uptick in the market”.

Stephen Sillars, savings and investment editor at Chip, echoed a similar sentiment in his prediction of a steeper drop in house prices between 5% and 7.5%. He explained that “the cost of living crisis is rumbling on, with inflation and borrowing costs contributing towards us all having less cash at our disposal. When you also factor in a possible recession in 2024, all these factors combine to make for a gloomy outlook for house prices”.

Despite this slightly more gloomy outlook, he ruled out a crash in the housing market, due to a shortage of supply, stating, “The fact remains that the UK simply doesn’t build enough houses, so any major crash is out of the question”.

To see the findings of the panel in full visit: https://www.finder.com/uk/base-rate-survey