The OBR, the government’s official forecaster, said in its Autumn statement in November that it believed house prices would drop in 2024, with the average cost of a home predicted to reach its trough of £266,000 in Q4 2024, a 7.6% drop from the same time in 2022.

Prices are then predicted to steadily recover, reaching the late 2022 peak by the second half of 2027.

The OBR prediction comes despite the housing market seeing its third monthly consecutive growth of 1.1% in December 2023,  according to the Halifax HPI, which recorded an overall property price rise of 1.7% for 2023.

Meanwhile Halifax also claimed the average house price to be at £287,105 in December.

Some industry professionals are sceptical about the OBRs predictions for 2024.

“The OBR do not have the best of track records with their house price forecasts and getting them right,” said William Lloyd-Hayward, managing director at Sirius Finance.

“So when reading their reports I would apply some caution and rather spend my time focused on talking positively about the opportunities in our market, lenders looking to reduce rates, improve criteria and support our market.

“For bridging though, while there is still much uncertainty in the housing market in general, rates are falling and the opportunities for bridges remain positive, so competitive and cheaper pricing should hopefully be a win for the consumer,” he continued.

Other industry professionals also cast doubts on the government forecast and took a more optimistic approach to the future of the housing market.

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Paresh Raja, CEO at MFS commented: “When compared to other experts' forecasts for 2024, the OBR’s projection of a 4.7% decline in house prices stands out as a rather steep forecast.

“Zoopla, for example, is expecting a milder dip of 2%,  while Rightmove is predicting an even shallower 1% drop.”

Though Paresh still expects prices to shrink as the market adjusts to the rise of interest rates since 2022, he feels that a significant drop is improbable.

“Indeed, prices have proven remarkably resilient over the past year even as the cost of borrowing rose, with some house prices indices (Halifax, for instance) reporting price growth in the final months of 2023.

“Whatever happens, the onus will remain on the bridging sector to lend responsibly and demonstrate their skills when it comes to valuing properties accurately — moreover, in order to help the property and BTL markets thrive, bridging lenders must continue to be pragmatic and demonstrate their flexibility in helping brokers and borrowers access the loan sizes they need in the coming year.”

Vic Jannels, CEO at the ASTL, also noted the difficulties in judging the market through the diverse range of predictions coming from different players within the market.

“One thing that is clear, however, is that lenders across the whole market, from mainstream to specialist, have an appetite to lend and the new year has brought with it a wave of significant rate reductions,” he continued.

“This can only be good news for the market, particularly when it comes to exit strategies, as responsible bridging lenders will assess the viability of a customer’s planned exit, which could include sale of property or refinance onto a term mortgage.”