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Housing market shows signs of picking up

Signs of life were seen in the UK housing market in the new year with a rise in the number of mortgages being approved.

Activity remains weak overall, with potential buyers still nervous about high interest rates.

But the latest Bank of England data shows approvals for house purchases rose to 55,200 in January from 51,500 in December.

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This was the highest level since October 2022. Borrowing on credit cards also picked up last month. People took on £1.9bn more in credit on cards, car finance and other loans in January than they repaid.

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Mortgage lenders have been shifting the interest rates charged on home loans at a rapid rate since the start of the year. This started with some significant cuts to the cost of new fixed-rate deals.

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BBC News

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Why the ‘mood music’ surrounding the housing market outside London has changed

An influx of new residents into Manchester, Birmingham, Leeds, Bristol, Edinburgh and Glasgow helped the housing market remain resilient during 2023, according to a new report.

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New research from global property advisor JLL shows there was a surge in demand from renters and buyers for prime residential properties across the UK’s ‘big six’ despite high inflation and interest rates.

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The report, which tracks residential development activity, prices and rents across the six areas, highlighted a desire from city centre residents to live in ‘vibrant, highly-amenitised and well-connected central locations’.

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City A.M.

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Calls grow louder for urgent stamp duty cut to boost property market

Propertymark is the latest trade body to call on the Bank of England to cut interest rates to boost demand for property.

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It sees lower rates as key to increasing affordability levels and consumer confidence, particularly among first-time buyers, as well as ease the financial strains on homeowners in general.

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The news comes as property website Zoopla found that people who are buying their first home are paying an average of £244,100 – this is £20,300 below the local market average.

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Source: Property Industry Eye

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House prices fall by -1.4% in December – ONS

Average house price annual inflation was negative 1.4% in the 12 months to December 2023, compared with negative 2.3% (revised estimate) in the 12 months to November 2023, according to the latest data from the Office for National Statistics (ONS).

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The average UK house price was recorded at £285,000, which is £4,000 lower than 12 months ago.

Average house prices in the 12 months to December 2023 decreased in England to £302,000 (negative 2.1%), decreased in Wales to £214,000 (negative 2.5%) and increased in Scotland to £190,000 (3.3%).

The average house price increased in the year to Q4 (October to December) 2023 to £178,000 in Northern Ireland (1.4%).

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On a non-seasonally adjusted basis, average UK house prices increased by 0.1% between November 2023 and December 2023, compared with a decrease of 0.8% during the same period 12 months ago.

Of English regions, annual house price inflation was highest in the North West, where prices increased by 1.2%.

London was the English region with the lowest annual inflation, where prices decreased by 4.8% in the 12 months to December 2023.

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Source: The Intermediary

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UK house prices rise at fastest rate since January 2023

UK house prices rose 2.5% in the year to January, recording the biggest increase since January last year, as lower mortgage rates and fading inflationary pressures led to increased buyer and seller confidence, Halifax has said.

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January marked the fourth consecutive monthly rise, with a 1.3% uplift on December, the UK’s biggest mortgage lender said, with the average home costing £291,000, £3,900 more than in December.

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Kim Kinnaird, the director at Halifax Mortgages, said: “The recent reduction of mortgage rates from lenders as competition picks up, alongside fading inflationary pressures and a still-resilient labour market has contributed to increased confidence among buyers and sellers.

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Source: The Guardian

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Rental Market Crisis As Demand Continues To Outweigh Supply

Letting agents have highlighted a persistent high demand for rental properties, coupled with a significant decline in available supply. This imbalance is primarily attributed to the dwindling number of new landlords entering the market, exacerbated by existing tenants choosing to stay put to circumvent the hike in rental prices.

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A recent survey conducted by the Royal Institution of Chartered Surveyors (RICS) among its members has unveiled a noticeable uptick in tenant demand throughout the three months leading to January. Despite this, there’s a sense of the market cooling off, possibly mitigating the ongoing reduction in new landlord listings.

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Source: Landlord Knowledge

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Should You Track the Market or Lock it In? Unveiling the 2024 Tracker Mortgage Advantage in the UK

The year is 2024 and for UK homeowners, navigating the mortgage landscape can feel like a tightrope walk. Interest rates are fluctuating, fixed-rate deals remain competitive, but a potential glimmer of hope shines through: tracker mortgages.

For the uninitiated, tracker mortgages mirror the Bank of England’s base rate, meaning your interest rate adjusts accordingly. So, the question arises: are tracker mortgages a viable option in 2024, and can they truly surpass the stability of fixed rates? Let’s delve into the key benefits and considerations to help you decide.

Unlocking the Potential Benefits of Tracker Mortgages in 2024:

Potential for Lower Rates

While current fixed-rate deals are enticing, they reflect a cautious market anticipating future rate rises. Tracker mortgages, however, track the base rate, which could fall in 2024. This translates to potentially lower monthly payments and significant cost savings over the mortgage term.

Flexibility and Freedom

Unlike fixed-rate counterparts, tracker mortgages often come with no Early Repayment Charges (ERCs). This translates to greater flexibility. You can overpay without penalty, capitalizing on lower rates and potentially shortening your mortgage term. Moreover, some trackers offer the option to switch to a fixed rate penalty-free if the market shifts, providing an added layer of security.

Transparent and Predictable (to an extent)

While future rate changes are never guaranteed, the base rate serves as a clear reference point, making monthly payment fluctuations more predictable compared to fixed rates, which are subject to market uncertainties.

Understanding the Differences and Benefits of Fixed and Variable Mortgages

Riding the Economic Wave

If economic forecasts hold true and the base rate starts falling, tracker mortgages allow you to capitalise on these reductions immediately. Fixed-rate borrowers, on the other hand, remain locked into their initial rate, potentially missing out on these savings.

However, the tracker mortgage journey isn’t without its caveats:

1. Interest Rate Risks: As the base rate rises, so do your monthly payments. This increased financial vulnerability can be stressful, especially for those on tight budgets.

2. Market Volatility: While trackers offer potential savings, they do expose you to fluctuations in the base rate. This can be unsettling for homeowners seeking guaranteed stability.

3. Limited Availability: Tracker mortgages are not as widely available as fixed-rate deals, and lenders often impose stricter eligibility criteria.

UK house prices to rise by 3% in 2024

So, is a tracker mortgage right for you in 2024?

Ultimately, the decision depends on your individual financial situation, risk tolerance, and economic outlook. If you’re comfortable with some flexibility and potentially lower rates, and you believe the base rate might fall, a tracker mortgage could be an attractive option. However, if you prioritise stability and predictable monthly payments, a fixed-rate deal might be more suitable.

Remember, carefully assess your financial circumstances, thoroughly research the market, and consult a qualified mortgage advisor before making any decisions.

As a Commercial Finance Broker work with ALL UK Mortgage Lenders offering all options for tracker, fixed and variable mortgage deals and have highly experienced CeMAP Mortgage Advisors to discuss your needs, so Contact Us today for totally FREE quote and no-obligation advice.

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UK house prices to rise by 3% in 2024

Knight Frank has revised its UK house price forecasts as inflation is falling faster than expected, with the company now suggesting that house prices will rise by 3% in 2024.

This compares to a decline of 4% which was predicted in October.

Knight Frank also expects cumulative growth of 20.5% in the five years to 2028.

This is partially a result of stronger demand, as the number of mortgage approvals was 10% higher in November than the previous year and the firms expects a double-digit percentage increase in sales volumes this year compared to 2023.

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The report forecasts slightly lower growth for the mainstream London market (+2%) this year as continued affordability constraints in the capital mean lower-value areas of the country are likely to outperform.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

In the prime country house market, Knight Frank expects a narrower decline this year (-2%) as the market comes down from the highs of the pandemic in recent years.

By Jodie Bradley

Source: Bridging & Commercial

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Have House Prices Fallen Or Risen In 2023?

9 2023 was a tough year for the property market. With an unstable mortgage market, where rates went on a rollercoaster ride, demand was subdued. Many commentators were predicting property prices to decline as a result. But have house prices fallen or have they risen in 2023?
House prices are often seen as a reliable indicator of the health of the property market. And while not infallible, they can offer an insight into how confident sellers and buyers are in the market.

The last year was not the best in terms of confidence in the market. Rising mortgage rates and high inflation has forced many people to put their plans to buy a new home on hold.

There was much speculation how the year will end regarding prices, with many predicting that they will fall. Now that we have data from several industry insiders, can we determine whether house prices have fallen or risen in 2023?

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Halifax Announces Slight Rise In House Prices in 2023
After Nationwide and Rightmove, Halifax has released its latest House Price Index for December 2023. The data shows that house prices have risen by 1.1% compared to November last year.

According to the lender’s figures, this is the third monthly price rise in a row, pushing up the average UK house price to £287,105.

Year-on-year, Halifax’s House Price Index suggests that house prices have risen by 1.7% in 2023, compared to 2022. This means house prices were £4,800 higher in December than in December the previous year.

However positive these figures appear, they contradict data from Nationwide and Rightmove.

Nationwide’s House Price Index for December 2023 showed that house prices have stagnated on a monthly basis in the final month of the year. Compared to December 2022, house prices have fallen by 1.8%.

Rightmoves’ final House Price Index of 2023 also says the year has ended with a decline in house prices by 1.1% compared to the year before. Their data put the monthly house price decline in December at 1.9%, compared to November.

So what’s going on? Have house prices fallen or risen? The difference is down to the use of different datasets.

Halifax and Nationwide are likely to base their figures on data from properties bought with their mortgages, Rightmove uses property prices from all properties listed on their portal.

As such, Rightmove’s data seems to be the most complete. However, not all properties are listed on the portal. This means that all these figures have to be taken with a pinch of salt.

The most complete data to establish if prices have risen or fallen comes from land registry data. So we will have to wait for the Office forNational Statistics’ House Price Index to know for sure, which will be released mid to end of January.

But the likelihood is that house prices will have fallen by around 1% at the end of December 2023 compared to the previous year.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Predictions For Next Year
While the currently available data doesn’t help to definitively answer the question of have house prices fallen or risen, there is more consensus about what direction prices will go this year.

Most commentators, including Rightmove and Nationwide, agree that house prices are likely to decline in 2024. Even Halifax believes that house prices will drop by between 2% and 4%.

Despite mortgage rates having come down recently as lenders compete for borrowers, mortgage rates are still at an elevated level. Inflation is also slowing, but prices for many everyday items are still high, putting pressure on many household budgets.

The current economic uncertainty will likely continue into 2024, keeping many buyers and sellers cautious.

Source: Property Road

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Property industry delivers verdict on new UK house price data

Property prices in the UK rose for the third consecutive month in December 2023, according to the latest Halifax HPI data.

The cost of an average UK home rose to £287,105, up £3,066 (+1.1%) from November, reaching the highest level since March 2023.

According to Halifax, this means the housing market beat expectations in 2023 and grew by 1.7% on an annual basis.

The average property price is now £4,800 higher than it was in December 2022.

Kim Kinnaird, director for Halifax Mortgages, said: “Whilst it’s encouraging that we saw growth in the last three months of the year, this was preceded with property price falls for six consecutive months between April and September.

“The growth we have seen is likely being driven by a shortage of properties on the market, rather than the strength of buyer demand. That said, with mortgage rates continuing to ease, we may see an increase in confidence from buyers over the coming months.”

Across all the UK regions, Northern Ireland recorded the strongest house price growth in 2023, with properties increasing by 4.1% to £192,153. Scotland saw property prices rise by 2.6% to £205,170.

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At the other end of the scale, the South East fell most sharply, with houses there now averaging £376,804, down by £17,755 (-4.5%).

Kinnaird said: “As we move through 2024, the UK property market will continue to reflect the wider economic uncertainty and buyers and sellers are likely to be naturally cautious when considering making a move.

“While wage growth is now above inflation, helping to ease cost of living pressures for some and improving housing affordability, interest rates are likely to remain elevated for as long as inflation remains markedly above the Bank of England’s target.

“Our latest forecast suggests house prices could fall between 2% and 4% during the coming year, although, as with recent years, forecast uncertainty remains high given the current economic climate.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

More reaction

Anthony Codling, managing director, equity research, RBC Capital Markets, said: “The demise of the UK housing market is somewhat over reported. Most, including us, thought house prices would fall during 2023, and most think they will fall in 2024, but not us.

“With rising wages, falling inflation, falling mortgage rates, and increasing talk of election-related housing stimulus packages, we expect house prices to rise in 2024. Our pessimism was misplaced in 2023, and we don’t want to make the same mistake twice.”

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Source: Property Industry Eye

By Jerome Smail