‘Buyers Return As Rates Drop’ – January & February have certainly been cold, but the housing market appears to be warming up a little.
Yes, 2023 was challenging and the financial markets were as recently as October anticipating more of the same for 2024 – going as far as predicting just one interest rate cut of 0.25% by the end of 2024. Page forward to the end of the first full working week of 2024 and those same economists were forecasting the possibility of no less than five interest rate cuts this year – resulting in a more positive outlook for the property market. A key reason for the change in outlook – inflation is falling faster than expected at just 3.9% in December, a two-year low – with Capital Economics expecting UK inflation will likely fall to just 1.7% by April of this year.
As a result, the housing market is becoming more bullish. Banks are competing over mortgage rates to the point that we’re now seeing five-year fixed rate mortgage’s sitting below 4%. Indeed, ‘six of the seven largest mortgage lenders, and 31 banks and building societies in total have made big rate cuts this year’, according to a running tally by the Times’s George Nixon. The boost to affordability is bringing buyers ‘out to play’!
So, what’s the 5-year UK Sales Forecasts? Thoughts are, ‘we will now expect UK mainstream prices to rise by 3% in 2024, which compares to a decline of 4% what had been predicted in October. With low-level single-digit growth in subsequent years, we expect cumulative growth of 20.5% in the five years to 2028’ – Tom Bill, Knight Frank.
Moving forward if you’re looking for your next property or indeed, have plans to sell & the pace of a 28-day auction contract would enable you to ‘get moving’ in 2024 then give the Auction Team a call on 01273 201989 – we’d be delighted to assist.
