By Jonathan Cable
A Reuters poll of housing market experts forecasts that British home prices will make solid gains in the next two years, outpacing overall inflation. Affordability for first-time buyers is also expected to improve based on expectations for lower borrowing costs.
The poll predicts that home values will rise by 2.5% this year, followed by increases of 3.0% in 2025 and 4.0% in 2026. Consumer inflation is expected to be at 2.3% next year and 2.0% in 2026.
With interest rates falling, affordability for first-time buyers is set to improve, according to 15 out of 17 respondents to an extra question in the poll.
Analysts believe that the fall in mortgage rates has provided a boost to the housing market and set a firm floor under future price falls. London, a popular safe haven for foreign investors, is also expected to see increases in home prices.
Overall, the property market outlook is likely to strengthen, with rents predicted to rise faster than home prices. Prime Minister Keir Starmer's government plans to boost the supply of affordable properties by building 1.5 million homes in his parliamentary term and shake up planning laws.
In conclusion, the housing market is expected to see solid gains in the coming years, with improvements in affordability for first-time buyers. This can have a significant impact on individuals looking to enter the property market, as well as investors and the overall economy.
