Economists say house prices in Great Britain are about to fall 10% or more next year

Due to increasing interest rates and deepening recession, the British property market is experiencing more and more stress. This sphere, which used to be prosperous during the pandemic, might face price decrease by 10% over the next year.

This conclusion was made after a survey of economists and property-market forecasters, all of whom voiced an expectation of the first annual decline in ten years. At the same time, no one suggests that a decline would be as severe as by 16%, similar to the one happened during the financial crisis of 2008.

Paul Hollingsworth, chief European economist at BNP Paribas Markets 360, summed up the expectations by calling the outlook “bleak.” He links it to an increase of the cost of debt, deterioration of confidence, and a decline of consumer real incomes. As noted by Hollingsworth, if one sums up all the mentioned factors, it’s possible to imagine further price drops.

JPMorgan Chase & Co. and Credit Suisse Group AG are seeing a decline by 10% next year, while John Stepek from Bloomberg is forecasting that even such an extreme drop as by 30% might be probable. Halifax suggests an 8% decrease. Other market participants are more cautious in their forecasts. Beacon Economic Consulting suggests that a 0.3% decline will take place in 2023, followed by a 3.5% in 2024.