Experts predict a significant growth of almost 25% in the housing market by 2029.
House prices increased by 0.2% in October – a fourth consecutive monthly rise – according to the Halifax House Price Index. This has brought the annual growth rate to 3.9%, slightly lower than September’s 4.6%, meaning a typical UK property now costs £293,999. This surpasses the previous peak of £293,507, which occurred back in June 2022.
‘Despite the affordability challenge, market activity has been improving,’ says Amanda Bryden, Head of Mortgages at Halifax. ‘The number of new mortgages agreed recently reached its highest level in two years. This aligns with average mortgage rates dropping steadily since spring, coupled with continued positive income growth.’
Challenging conditions
However, while prices are on the up, conditions might be becoming more challenging for buyers.
‘Looking ahead, borrowing constraints remain a challenge for many buyers,’ she says. ‘Following the budget, markets expect the Bank of England to cut rates more slowly than previously anticipated, which could keep mortgage costs higher for longer. New policies like higher stamp duty for second home buyers and a return to previous thresholds for first-time buyers might also affect demand. While we expect house prices to keep growing, it will likely be at a modest pace for the rest of this year and into next.’
Significant growth ahead
But while the price rise might be modest in the near future, the same might not be the case across the next five years, when the UK housing market is predicted to experience significant growth. This is according to the latest house price forecast from property adviser, Savills.
Using data from Oxford Economics and Nationwide Building Society, the forecast indicates that average house prices will rise faster than both inflation and wages, increasing by 23.4% (that’s £84,000) by 2029. This will push the average house price up from £358,000 to £442,000. This growth forecast aligns with JLL’s estimate of a 20% rise in property prices over the same period.
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