House prices will only fall marginally next year or not at all thanks to first time buyers and falling mortgages, major lenders have said.
Halifax now expects house prices to drop between just 2pc and 4pc over the coming 12 months, having escaped a forecast crash this year.
Similarly Nationwide predicts house prices will record another small decline in “low single digits” or remain broadly flat over the course of 2024.
HSBC too has said it was revising its house price forecast, saying “we no longer see any further falls from here”.
It added that ongoing affordability constraints meant there would be zero house price inflation either next year however, forecasting a return to growth in 2025 of just 1pc.
Average house prices have fallen by roughly £3,000 for the year so far, Halifax said, in defiance of earlier predictions of a double-digit drop.
Their estimates for the coming year are more optimistic than others, however. The Office for Budgetary Responsibility has predicted a 4.7pc fall in prices next year and said they are unlikely to recover to the highs seen in 2022 until 2027.
While higher mortgage rates and the wider economic outlook have impacted affordability, Halifax says first-time buyers are adjusting to the conditions such as buying smaller properties to compensate for higher borrowing costs.
Prospective buyers are also facing increased rental costs – up 8pc in October according to Halifax – so are still looking to get on to the housing ladder despite the high cost of borrowing.
