Last year, Knight Frank said there was likely to be a 4% drop in house prices in 2024 as interest rates were set to remain high. However, now that inflation is falling more quickly than expected, and the Bank of England comes under pressure to cut its base rate, there is cause for more optimism the firm says.

A raft of mortgage rate reductions since the turn of the year, also adds weight to the argument that the housing market may have turned a corner.

Knight Frank stated: “The main reason for this changing outlook is that inflation is falling faster than expected. As a result, mortgage lenders have dropped their rates fairly significantly in recent weeks, partly to win business in a low-volume market. As a result of this more positive backdrop, we have revised our UK house price forecasts from three months ago. We now expect UK mainstream prices to rise by 3% in 2024.”

In London, the firm says that property prices are only set to grow 2% this year due to “affordability constraints in the capital”.