Housing analyst: I’m happy to be wrong on house pri...

A housing market analyst has admitted he is “happy being wrong” after predicting house prices would fall between 8% and 10% last year.

Depending which house price index you follow, average prices either fell 1.8% last year, according to Nationwide or rose 1.7% if you go by Halifax data.

Land Registry figures for the full year of 2023 are yet to be released but it has said prices were down 2.1% over the 12 months to November.

Speaking on the latest episode of The Home Stretch podcast, hosted by Holly Hibbett from The Guild of Property Professionals, Anthony Codling, head of European housing and building materials research at the Royal Bank of Canada, said: “I’m always happy to be wrong on house prices when I take a negative view, but I thought it's fascinating that those scare scenarios we had following the mini budget, have not come to pass and with every passing day seems to become ever less likely.

“Even the lenders are reducing their negativity towards house prices. So, I think that's a positive start for 2024.”

Property stats writer Christopher Watkin, also told the podcast: “I always think predicting house prices is like trying to catch a leaf in the wind.

“You can follow the patterns, you can understand the science, but ultimately a sudden gust can change everything. Housing markets are influenced by so many variables like the economy, interest rates, government policy, even sentiment, and I think the key isn't to predict with exactitude what the price is, but to understand the fact as well enough to make educated estimates and hedge against uncertainty.”

Codling predicts a 5% increase in house prices for 2024, accompanied by a 20% rise in transactions.

He anticipates a significant drop in bank rates, ending the year at 3.75%, adding: “I think transactions are going to be up significantly this year.

“I think they're going to be back at the normalised level which we've seen for a number of years, excluding the impact of Covid. Around the 1.2 million mark is what I'm anticipating, so from just above a million for 2023.

“I think the bank rate will end the year 3.75%, down from 5.25%. So huge falls. That said, I do think the period of ultra-low interest rates is over. To be honest, since the credit crunch it's been unusually low. Until the credit crunch, I would say that your benchmark for normalised mortgage rate was 6%.”

> Listen to the full podcast.