UK house prices will continue to fall this year and in 2024 and will not start to recover until 2025, Lloyds Banking Group has predicted.
Britain’s largest mortgage provider, which owns Halifax and Bank of Scotland, said that by the end of 2023 house prices would have fallen 5% over the course of the year and were likely to decrease by further 2.4% next year.
The latest forecasts suggest an 11% drop in property prices from their peak last year.
Santander is predicting a larger drop in UK house prices for the whole of 2023 of about 7%, followed by a smaller 2% fall in 2024.
Halifax-owner Lloyds Banking Group predicts prices will drop 4.7% this year and by a further 2.4% in 2024 before recovering.
Lenders have blamed higher borrowing costs for a slowdown in house sales.
Both lenders said the first signs of growth would start to emerge only in 2025, with Lloyds economists predicting a 2.3% increase in house prices that year and Santander expecting a 2% rise.
“The housing market in 2023 has been a little bit softer than we saw in previous years,” said Lloyds’ chief financial officer, William Chalmers. “Having said that, as you know, there has been an increase generally in the housing market for a number of years to date, and so we’re retracing a part of those steps.”
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