Lloyds Bank has shared predictions in late April that could benefit home buyers and boost the property market.

Lloyds Bank recently delivered a dual dose of optimism for homeowners and prospective property buyers. Britain’s biggest bank has predicted that property prices will go up this year and mortgage interest rates will come down, offering a glimmer of hope for many prospective home buyers and remortgagers.

Last December, Lloyds predicted that house prices would fall between 2 and 4% this year due to ‘broader economic challenges’, including pressure on household finances and inflation.

House price rises

However, the lender is now predicting that house prices will rise by 1.5% this year. Lloyds’ Chief financial officer William Chalmers said there is a ‘more benign economic outlook’ and that the housing market had proved more resilient than expected.

Lloyds also predicts that the Bank of England will reduce the base rate three times by the end of 2024, which would, in turn, bring down mortgage interest rates.

The base rate currently stands at 5.25% (a 16-year high) and was predicted to fall in June. However, because inflation has taken longer than predicted to fall, financial analysts generally believe the base rate will not fall until later in the year. It’s also looking more likely that there will be one base rate cut this year, due to swap rates creeping up in April, though it’s impossible to say for sure.

Average prices dipped

As for house prices, the Land Registry’s House Price Index, which is based on actual sales data rather than agreed sales, says the average price of a property in the UK dipped by 0.2% between February 2023 and 2024. In the previous 12 months, prices went up by 4.3%, so there has been a slowdown over the past year.

The next base rate review takes place on 9 May. We will keep you informed of any further changes.

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