Good news for sellers, as experts predict house prices will increase this year, fuelled by battling mortgage lenders and the promise of cheaper borrowing.

After a year of falling prices, experts at Knight Frank estate agency now believe UK house prices could rise by 3% in 2024. This is a dramatic turnaround from their earlier prediction of a 4% drop!

So what’s behind this change of heart?

• Mortgage Price War: Banks are locked in a battle to offer the lowest mortgage rates, with some now dipping below 4%. This is great news for buyers and means more people could be tempted to make a move.
• Interest Rate Cut: The Bank of England recently cut interest rates for the first time since March 2020, making borrowing cheaper. Experts believe another cut could be on the cards later this year, further boosting the market.
• Increased Confidence: A new government and the falling cost of living are making people feel more confident about the future, making a big purchase like a house seem less daunting.

What’s happening to house prices right now?

• Prices are already rising: Figures from Halifax and Nationwide show house prices rose by just over 2% in July, putting the market on track to meet or even exceed the 3% growth prediction.
• London is catching up: London house prices are also on the up, with prices in the capital expected to rise by 2% this year.

But before you crack open the champagne…

…there are still some uncertainties ahead:

• The Budget: The government’s upcoming budget in October could introduce changes to taxes, such as capital gains tax, which could affect how much money people have to spend on property.
• Renters Reform Bill: Changes to renting laws could lead to higher rents, which might make buying a property seem even more attractive.

What does this mean for you?

If you’re a seller, it might be a good time to put your house on the market while buyers are feeling more optimistic.

Buyers could bag a bargain with cheaper mortgages readily available, but it’s worth remembering that interest rates could still rise.

Keep an eye out for the government’s Budget announcement on 30 October, as this will give us a clearer idea of what’s in store for the property market in the coming months.