House prices to jump 2.5% as economy brightens and mortgage rates fall, says Savills

Property firm Savills predicts house prices to rise by 2.5% this year

House prices will rise by 2.5 per cent this year amid an improved economic outlook and lower mortgage costs, property firm Savills has predicted.

It previously expected that prices would fall by 3 per cent.

Savills’ forecast is the latest to take a more upbeat view. Lloyds, Britain’s biggest mortgage lender, also recently said it saw prices rising this year. Lucian Cook, head of residential research at Savills, said the outlook had improved since its last forecast in November.

‘Mortgage costs have nudged down slightly and are much less volatile,’ said Cook.

Savills also upgraded its longer term outlook, predicting that prices will rise by 21.6 per cent by the end of 2028 – equivalent to £61,500 added to the value of a home worth a typical £285,000 at the end of 2023.

It comes as the UK’s economic fortunes recover after last year’s recession.

Figures published later this week by the Office for National Statistics are expected to show that the economy grew by 0.4 per cent in the first quarter of this year, ending the downturn.