Yes it is that crystal ball time of year again.
Today two of the country’s biggest mortgage lenders Halifax and Nationwide both offer their prognostications for the property market in 2024.
Given how often their monthly house prices indices are at odds it is perhaps surprising to see them singing from the same hymn sheet on this occasion. Halifax goes for a fall of 2% to 4% over the year, while Nationwide is going for “low single digit decline or broadly flat” in 2024.
Both lenders rightly point to the continuing pressure on household finances from interest rates and inflation, although that should ease considerably later in the year. If their forecasts do prove right it will be a rare “soft landing” for the British property market, which is better known for staggering through a cycle of booms and crashes.
A small fall in nominal prices will not be enough to spook owners while wage growth means that in real terms they will be considerably more affordable for first time buyers.
My hunch, however, is that just as with last year, the soothsayers are too cautious. In 2023 prices will end up broadly flat — compared with widespread predictions of double digit falls.
With unemployment levels still at historic lows, wages rising, absolutely no signs of a sudden housebuilding boom on the horizon, and the urge to own as strong as ever we are likely to be back in a sellers’ market by the middle of the year.
So my prediction — and you read it here first — is the mirror image of the August number crunchers at the two lenders.
I see prices rising in low single digits in 2024 with the market gathering pace in the second half of the year as interest rates finally start to fall. Let’s compare notes in a year’s time.
