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Savills Makes Dramatic U-turn On Housing Market Forecast For 2024

Savills Makes Dramatic U-turn On Housing Market Forecast For 2024

A decline in mortgage rates has prompted a forecaster to reverse its predictions of a fall in UK house prices in 2024, instead suggesting the average cost of a property could rise by £61,500 over the next five years.

The property company Savills had forecast in November that it expected the average price of a home to fall by 3% this year because recent rises in the Bank of England base rate had heightened the affordability pressures on would-be buyers.

However, although the base rate remains at 5.25%, competition among mortgage lenders has forced the cost of borrowing down since, prompting more activity in the market. As a result, Savills now expects the average price to rise by 2.5% in 2024 to £292,000.
Although it has adjusted some of its longer-term forecasts downwards, it said it expected growth every year up to the end of 2028, when it predicts average prices will have risen by £61,500, or 21.6%, to £346,500.

The number of homes it expects to change hands this year has also been revised upwards, from 1.01m to 1.05m.

Lucian Cook, the head of residential research at Savills, said “the outlook for 2024 has improved since our last [November 2023] forecasts as mortgage costs have nudged down slightly and are much less volatile. The outlook for economic growth has also slightly improved, pointing to relatively modest house price growth this year, with greater potential over the following few years.”

It is widely believed that the Bank base rate has reached a peak, but while some economists predicted a cut as early as March, at their last meeting policymakers voted to wait to make sure inflation continues to fall, and they are expected to again hold rates when they meet this Thursday.

Cook said "a 75% two-year fixed-rate mortgage from Nationwide building society priced in November at 5.35% had fallen to 4.84% this month, while a five-year deal had dropped to 4.5%. Those deals are no longer available as Nationwide and several big lenders have repriced deals upwards in recent weeks, but rates are still below November’s prices. The highly competitive nature of the mortgage market has meant that lenders have fairly aggressively priced in the prospect of cuts in bank base rate, causing buyer confidence, and prices, to recover somewhat. However, rising prices this year would feed through to further problems with affordability in future."

In London, where prices are at their highest, Savills is predicting a 14.2% rise in prices over the next five years, while in the north-west of England and Yorkshire and the Humber, where prices are lower, it is suggesting growth could be about double that.

Separate figures from the rival estate agent Knight Frank show prices in London’s most expensive postcodes have fallen by 2.6% over the past year.

It said despite a large proportion of cash buyers, sales in prime central London markets “have not been immune to the pervading mood of hesitancy” caused by fluctuating mortgage rates.

Tom Bill, the head of UK residential research at Knight Frank, said “the close relationship between the cost of borrowing and demand in recent months is evident across the whole of London. The number of offers made was 14% below the five-year average (excluding 2020) in April, underlining how demand has weakened.”

Mainstream UK house price forecasts (2024-2028)

2023 (actual)






Total (2024 to 2028)

Average UK House Price (%)








Average UK House Price (£)








Housing transactions








Year-end Bank Base Rate








Nominal Income Growth*








Real GDP Growth









Savills used Oxford Economics and Nationwide Building Society data as part of its research. Its calculations were based on the second hand property market, so new build property values could perform differently.

Here are Savills’ predictions for house price growth over the five years to 2028:

  • North West, 28.8%
  • Yorkshire and the Humber, 28.2%
  • Wales, 26.4%
  • Scotland, 25.8%
  • North East, 25.2%
  • West Midlands, 23.4%
  • East Midlands, 22.8%
  • South West, 18.7%
  • South East, 18.2%
  • East of England, 18.1%
  • London, 14.2%


UK house prices expected to continue rising throughout the year

UK house prices are predicted to see a modest increase over 2024, according to Halifax. The average UK house price saw a slight rise of 0.1% month-on-month in April, following a decrease of 0.9% in March, as per the index.

Halifax, the issuer of the report, stated that typical house prices in early 2024 have "largely plateaued".

Property values experienced an annual growth of 1.1%, a significant acceleration from the 0.4% increase recorded the previous month. In April, a typical UK home was priced at £288,949, a slight increase from £288,781 in March, as reported by Halifax.

Amanda Bryden, head of mortgages at Halifax, commented "while there is always much scrutiny of monthly price changes and a degree of volatility is to be expected given current market conditions the reality is that average house prices have largely plateaued in the early part of 2024. This reflects a housing market finding its feet in an era of higher interest rates. While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability. Activity and demand is improving, evidenced by greater numbers of mortgage applications so far this year, while at an industry level mortgage approvals have reached their highest point in 18 months."

Our recent research also found that buyers are adjusting their expectations, with first-time buyers in particular compensating for higher borrowing costs by targeting smaller properties. We see this reflected in property prices for the first few months of this year, with the value of flats rising most sharply, closing the 'growth gap' on bigger properties that's existed for most of the last four years. However, we can't overlook the fact that affordability constraints are still a significant challenge, for both new buyers and those rolling off fixed-term deals. Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower pace of cuts."

If, as is still expected, downward moves in bank rate come into play later this year, fixed mortgage rates should fall. Combined with the resilience displayed by the housing market over recent months, we now expect property prices to rise modestly over the course of 2024."


The UK regions where house prices have risen the most shared as average property values increase

Property values have grown 1.1% in the last year, with the typical house price sitting at £288,949 in April 2024, according to the latest House Price Index from Halifax. The biggest jump in value has been found in Northern Ireland, where house prices have increased 3.4%.

While most areas have seen the price of their house go up, values have dropped in some parts of the UK. Homes in the East Midlands, Eastern England and the South East have all decreased year-on-year, according to the data.

House price changes by region

  • Northern Ireland, £192,502 - up 3.4%
  • North West, £231,599 - up 3.3%
  • North East, £172,538 - up 2.2%
  • Scotland, £204,579 - up 1.5%
  • Yorkshire and the Humber, £207,166 - up 1.5%
  • West Midlands, £253,069 - up 1.2%
  • Wales, £218,775 - up 1.1%
  • South West, £303,262 - up 0.4%
  • London, £539,336 - up 0.1%
  • East Midlands, £239,579 - down 0.5%
  • South East, £384,972 - down 0.6%
  • Eastern England, £329,723 - down 1.1%

Properties remain the most valuable in London, at an average of £539,336, and the most affordable properties can be found in the North East.