16 October 2024
If you are covering the latest UK house price index, please see the following comment from Karen Noye, mortgage expert at Quilter:
“House price growth appears to be picking up the pace, with an increase of 1.5% between July and August 2024. On an annual basis, house prices saw a rise of 2.8% in the year to August 2024, a marked uplift compared to the revised estimate of 1.8% in the year to July.
“House prices are up across the country on an annual basis, but there remain some significant regional disparities. Yorkshire and the Humber saw the greatest monthly price increase, with a rise of 2.7%, while on an annual basis the North West led the way with a 4.6% increase in house prices. Prices in London have risen 1.4% in the last year, meaning the average property value in the capital now sits at £531,212 – far out of reach for the majority of first time buyers.
“Mortgage rates have fallen from their recent peaks, and this morning’s inflation data will give prospective buyers and those looking to remortgage a glimmer of hope that the Bank of England will continue to cut interest rates at its next monetary policy meeting. Many lenders are now offering deals with rates sitting around the 4% mark, and we could see this gradually begin to lower if the Bank continues on its path of rate cuts. Lower mortgage rates would translate to more affordable financing options for prospective buyers, which should boost buyer confidence and help buoy the market further.
“Although we are seeing improvements in the rates on offer, for many the still elevated levels will mean the cost of borrowing is still out of reach, particularly those who are first time buyers. With further rate cuts on the cards in the not too distant future, many are having to make tough decisions as to whether to fix their mortgage for the stability it can provide, or to change to a tracker in the hopes of fixing later down the road when rates have lowered. For lenders, this has resulted in a competitive market and we are regularly seeing new deals being added in an attempt to attract new customers.
“Buyer confidence appears to be rising, but with Labour’s first budget fast approaching, we may see a return to a more cautious approach. Any significant fiscal changes could impact mortgage affordability, and any economic hiccup could cause prices to stagnate or even reduce once again.”
