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House buyers should make their move in early 2025 when prices will be at their lowest, according to the Office for Budget Responsibility (OBR).
Property prices will hit a low between December 2024 and early 2025, with the average price falling to £266,000, a drop of 7.6pc from a high in the final quarter of 2022.
The OBR, the Government’s independent economic forecaster, then expects house prices to recover slowly, overtaking the 2022 high watermark in the second half of 2027.
By the end of the forecast, in 2029, prices are expected to be 6.4pc higher than they were in 2022, meaning hope for prospective buyers is likely to be short-lived.
The figures mean buyers may want to consider waiting until prices dip to bid on a property.
Despite many predictions of a house market crash this year, prices have proved remarkably stable.
Jeremy Leaf, a north London estate agent and former RICS chairman, said his clients buying flats and shorter-term properties are those most concerned with the fluctuations.
“Our view is that it is good news and bad news, because it could have been a lot worse but also it shows that it’s not going to be as bad as people thought and there is going to be an end to it,” he said.
The average house price in the UK was £291,999 in September 2023, according to the Office for National Statistics, which marked a fall of just 0.1pc from the same time in 2022.
Experts said high wage growth, falling mortgage rates and an influx of cash buyers have propped up prices, although the market has slowed in other ways.
Tom Bill, head of residential research at estate agent Knight Frank, said the reduced number of property transactions was a better indicator of the poor health of the market.
He said: “It’s been a market that’s been operating well below capacity, but just looking at house prices is probably not the best gauge.”
The number of property transactions in September 2023 was 92,600, 19pc lower than in September 2022 and 2pc down from August 2023, according to a release from HMRC.
Before the Autumn Statement was announced, it had been rumoured that the Chancellor was contemplating interventions on stamp duty and support for first time buyers.
Mr Bill said: “The Government has fiddled around with stamp duty a lot over the past few years, so it is probably something that’s sort of best to leave where it is.”
Consumer champion Martin Lewis called for the Lifetime Isa, which supports first time buyers, to be reformed, scrapping the penalty for those buying homes of more than £450,000.
But this was not included in the Autumn Statement, and Jeremy Hunt’s interventions on the housing market were limited.
The Government will extend a mortgage guarantee scheme which makes 95pc loan-to-value mortgages available for first time buyers. Originally, the scheme was due to end in December, but it will now be available until June 2025.
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