07 March 2024
If you are covering the latest Halifax House Price Index, please see the following comment from Karen Noye, mortgage expert at Quilter:
“The latest figures from the Halifax House Price index reveal that the housing sector has continued its strong start to the year, as prices increased by 0.4% in February representing the fifth monthly rise in a row. With the average cost of a home increasing to £291,699, the market has so far managed to resist the downward pressure being applied on it by the unfavourable market conditions and is back to a rising trajectory after some small losses last year.
“Part of the reason behind this resilience is that lower mortgage rates have helped to draw buyers to market evidenced by a 2% increase in transactions up to 82,000 from 80,500 in December 2023. However, there has been some increases in mortgage rates in recent weeks as a result of swap rates being higher which could dampen this newfound demand. But even a small increase in demand coupled with the huge lack of housing supply in the UK means that prices naturally increase due to the laws of supply and demand. This continues to shut out first time buyers from the market.
“Just yesterday, many buyers will have felt shortchanged by the conspicuous lack of housing measures announced at the Spring Budget. One rumour that failed to materialise was the 99% mortgage scheme aimed at helping reduce the deposit required for people to get on the housing ladder. However, the decision from government not to push forward with the policy was likely sensible as it had the power to cause negative equity for new homeowners if prices drop, and given how volatile the market it is currently, this was a risk not worth taking.
“Nonetheless, the news announced in Hunt’s speech that the higher rate of property capital gains tax (CGT) will be reduced from 28 per cent to 24 per cent, will come as good news to a small section of the market. There are some hopes that this cut could incentivise more people to sell their properties, which may increase supply across the market. How influential this ultimately is though remains to be seen and given that other CGT allowances have been slashed, the generosity of this is lessened.
“For anyone looking to take advantage of these new rules or simply wanting to buy a house, its crucial to get financial and mortgage advice to ensure that you can get the best possible outcome for your specific financial circumstances.”
