How house price forecasts have changed in just one month

House price forecasts have improved in just one month and significantly from a year ago, analysis shows.

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The Treasury regularly compiles independent forecasts to show how City analysts and thinktanks predict that certain parts of the UK economy will perform.

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The latest report for August 2024 shows the average forecast for annual house price growth among City analysts is 2%, while independent thinktanks have predicted 2%.

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This ranges from highs of 3.8%, predicted by Oxford Economics to a drop of 2% based on CEBR forecasts.

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The median prediction is 2% growth.

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It comes as estate agents and property market commentators report that slowing inflation and the recent interest rate cut is boosting housing demand, which could feed into sales and prices.

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This is already an improvement on July, when the highest forecast was for 2% and the lowest was a 2.5% decline, with a median figure of 0.8%.

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Meanwhile, this time last year – amid rising mortgage rates and inflation of 6.7% – the best hope for house prices was a 0.2% drop and the worst was an 11.7% decline.

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This shows what can change in a year, and also to perhaps not worry too much about house price forecasts.