01 March 2024
“The latest Nationwide house price index shows the housing market continued its positive start to the year in February, with annual house price growth up 1.2%, the first sign of positive annual growth since January 2023, while on a monthly basis prices rose 0.7%.
“Lower mortgage rates at the start of the year appear to have spurred some buyers back to the market which has buoyed prices, but more recently we have seen a further uptick in rates as swap rates have risen so this could be relatively short lived. Just last week, lenders including Nationwide, NatWest, Santander and HSBC all made the decision to increase their rates.
“Yesterday’s monthly property transactions data revealed the first monthly uptick in transactions, up 2% to 82,000 in January 2024 compared to 80,500 in December 2023. However, the figure still marked the lowest level of seasonally adjusted residential transactions in January since 2013. Nevertheless, there is some hope for the future as transaction levels and prices are gradually picking up, and should the Bank of England opt to cut interest rates later in the year as is expected then we could see things pick back up more rapidly.
“What’s more, the government is rumoured to be considering the return of 99% mortgages at its spring budget next week which could give the market a further boost if more first time buyers can consider taking their first step onto the ladder. However, if this does come to fruition, there would be risks associated with such a high loan to value mortgage so it is important that prospective homebuyers seek professional mortgage advice wherever possible.”
