14 February 2024
If you are covering the latest government house price index, please see the following comment from Rosie Hooper, chartered financial planner at Quilter Cheviot:
“The December 2023 government house price index shows a housing market that a couple of months ago was on course to rebound in 2024, but this now looks less clear amidst fluctuating mortgage rates seen this week. The latest figures show a month-on-month change of 0.1%, though with an annual adjustment of -1.4%, setting the average property value in the UK at £284,691.
“This update comes as mortgage rates have seen recent shifts, increasing after a period of welcomed decline. These changes are crucial for understanding the market's current mood, as the earlier decrease in rates offered a glimmer of hope to prospective buyers, fostering a competitive atmosphere among lenders despite broader economic pressures. These conditions have been illustrated by today’s increased index.
“The recent uptick in mortgage rates might signal a more cautious period ahead. The increased borrowing costs could dampen the momentum of house price rises, prompting potential buyers to rethink their plans in a tighter mortgage market. This adjustment could slightly cool a market that has otherwise demonstrated resilience in the face of significant economic challenges.
“The small mortgage rate increases of this week will take a while to feed through in the market and may end up being a flash in the pan. If so, the outlook for 2024 still carries a hint of optimism. The ongoing competition among lenders and serious lack of housing supply is likely to keep house prices buoyant and if and when interest rates are cut, it’s likely the property market will be off to the races again.
“For those facing the end of their long-term, fixed-rate deals, the current market underscores the value of professional mortgage advice as rates change so quickly that advisers can spot new deals and get prospective buyers and those remortgaging the best rates before they lock in.”
