What’s going on here?
UK home prices have slipped more than usual, dipping by 1.4% over four weeks leading to November 9. Yet, optimism remains as Rightmove forecasts a notable 4% rebound by 2025 – the strongest prediction since 2021.
What does this mean?
Despite a sharper-than-usual decline of 1.4%, UK home prices are still 1.2% above last year’s levels, showing resilience. Rightmove’s 4% growth forecast for 2025 indicates optimism, partly fueled by financial shifts like the Finance Minister’s tax hike on second homes and a supportive Bank of England rate cut. Rightmove’s Property Science Director notes increased activity, hinting at a healthier market ahead. But caution remains as the Royal Institution of Chartered Surveyors warns of potential setbacks from rising borrowing costs, despite positive signals.
Why should I care?
For markets: Winds of change in home valuation.
Despite current declines, the UK market is eyeing recovery with Rightmove predicting a 4% price surge in 2025. Investors should note rising prices reported by Halifax and Nationwide in October, indicating market vigour. However, as borrowing costs rise, vigilance for potential challenges is key.
The bigger picture: Shifting sands in property economics.
Recent tax policy changes and interest rate cuts are part of broader financial trends impacting UK property markets. These shifts could redefine market dynamics ahead of the 2025 rebound, influencing both domestic strategies and international investment interests.