As we bid farewell to 2023, the UK housing market reveals signs of resurgence, setting an optimistic tone for the year ahead. The closing months of the previous year witnessed a notable return in demand, accompanied by encouraging upticks in property prices. Several factors are aligning to propel the sector forward in 2024, instilling confidence and drawing attention to its potential strength. Inspire Legal Group, a leading solicitor in North Yorkshire, can assist you with commercial property.
Recent house price indices, notably from Halifax, depict a more positive landscape than initially projected. December reported a 1.7% annual rise in the overall UK housing market, according to Halifax, with other indices, including Nationwide and Rightmove, indicating modest falls of less than 2%. Despite regional variations, with some areas experiencing sustained growth and others a more rapid decline, the overarching trend appears promising.
Mortgage rates are emerging as a significant catalyst, fostering increased buyer demand. There is a surge in buyer interest as mortgage rates improve, a trend poised to extend into the new year. This positive momentum has prompted many economists to revise their 2024 forecasts in light of the encouraging data.
Falling Rates Fuel Market Boost:
Interest rates and the mortgage market wield substantial influence over the housing sector, affecting buyer appetite, affordability, and transaction dynamics. The past year presented challenges with rising rates, impacting borrowers seeking new loans or remortgaging. Conversely, this environment contributed to a rise in cash buyers who, favored for their flexibility, sometimes secure property discounts.
However, with recent announcements signaling a decline in inflation, Tom Bill anticipates that interest rates likely peaked in the summer of 2023. Speculation is now rife about potential rate cuts in 2024 as the Bank of England eases its stance. The resulting sub-4% mortgages are becoming more accessible, presenting a long-awaited boost to the housing market. The expectation is that lenders may further reduce rates throughout the year, invigorating activity.
While the best rates currently hover around 4%, the prospect of products starting with a 3% looms on the horizon, stimulating market activity.
Political Landscape’s Role
The political landscape is set to play a pivotal role in shaping the year, with the impending UK general election anticipated in late 2024. The Chancellor’s spring budget on March 6th is poised to unveil potential pre-election strategies. Speculation surrounds the prospect of tax cuts, potentially impacting stamp duty land tax (SDLT), and measures to support first-time buyers.
The housing market, a focal point of contention, is expected to feature prominently in the budget speech. Bill suggests the possibility of “pre-election giveaways,” with potential tax adjustments and measures aimed at bolstering confidence. As the budget speech approaches, all eyes are on the political stage, as revelations could significantly influence market sentiments, contributing to a robust and dynamic 2024 for the UK housing market.
Natalie Foster – Owner
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