House prices to increase 6% by next autumn if interest rates stabilise

If mortgage rates stay at the current rate, house prices could increase by 5.92% by September 2024. However, if mortgage rates waver, homeowners could be looking at either a dramatic increase or fall in the value of their houses.

Using the latest ONS house price data and the current APR rate of 5.3%, Go.Compare Home Insurance has calculated that homeowners can expect to see an increase of just under 6% in the value of their homes by autumn next year. However, a 1% increase to 6.3% would mean a 4.66% decrease in completion price value.

If mortgage rates fall another per cent to 4.3%, homeowners could see a huge 10.5% added to their house price. This would increase the average house price from £291,385.00 at the beginning of September 2023 to £321,968.00 just one year later – a rise of over £30,500.

If interest rates fall by one per cent, mortgage repayments would also become cheaper. The monthly repayments on the average house price next autumn would total £1,753 per month. Whereas, if rates stay the same, monthly repayments would work out at £1,859, a difference of £106 every month. Interestingly, if rates rise to 6.3%, repayments would also drop to £1,841.

Ceri McMillan, home insurance expert at Go.Compare, said, “With so much disruption in the housing market, homeowners are facing uncertainty over housing costs. Many are wondering how interest rates will affect the value of their homes as well as their monthly repayments, as many have seen a jump in their outgoings.

“While nothing is certain, our prediction aims to give homeowners and buyers an idea of what could happen to house prices next year. Our data shows that as mortgage rates rise and fall, this correlates to the completion value of homes. If mortgage rates continue to increase, homeowners may see lower completion prices.”