The property market should experience “a smoother ride” in the second half of the year, according to Knight Frank.
Tom Bill, its Head of Residential Research says modest house price growth should be achievable by the end of 2025, ”on paper at least”.
“The first fortnight of April will certainly take some beating as the most disorientating period of 2025,” he adds.
Cliff edge
“As the housing market fell quiet after the March Stamp Duty ‘cliff edge’, global financial markets were in disarray as Donald Trump announced a range of trade tariffs on 2 April.
And “Uncertainty levels rose again this month due to the conflict in the Middle East, which saw the oil price spike and concerns grow around higher inflation and interest rates.
For now, though, the housing market is stirring back into life.”
“For now, though, the housing market is stirring back into life,” says Bill, who is Head of UK Residential Research at Knight Frank.
“The number of UK transactions was 57% above the five-year average (excluding 2020) in March, which was followed by a 37% slump in April. But there was a smaller decline of 17% in May.”
Rate cut
He warns that high levels of supply may be a problem, but there is a good chance of an interest rate reduction.
“The recent bout of weak UK economic data has increased the chances of a rate cut by the Bank of England in August.
We expect modest house price growth by the end of the year.”
“Five-year swap rates, which are used to price fixed-rate mortgages of the same length, were trading just above 3.6% last week, which is broadly the same level as before last October’s Budget. They peaked at around 4.3% in mid-January,” he says.
“That’s the good news and the reason we expect modest house price growth by the end of the year.”
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