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Property industry reacts to UK house price data

Residential property prices increased by 0.4% in February, marking the fourth monthly increase in a row, according to the latest Halifax house price index.

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The data shows that during the month property prices grew 1.7% on an annual basis, against a 2.3% in the prior month.

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The figures showed the average cost of a home in the UK is now £1,000 higher than last month.

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Source: Property Industry Eye

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House prices remain remarkably stable

The UK economy has shown unexpected resilience in the face of rising interest rates and inflation. Agreed, the economy fell into a recession in the second half of last year, but so far, a very mild one.

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The high unemployment, financial stress and big company corporate failures that looked possible a couple of years ago have not materialised.

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The housing market has also held up, confounding expectations of sharply lower house prices.

The last time I wrote about house prices was in November 2022, in the aftermath of Kwasi Kwarteng’s ill-fated mini-budget. At that time I forecast a 15 per cent decline in house prices.

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Source: Reaction

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Housing market shows signs of picking up

Signs of life were seen in the UK housing market in the new year with a rise in the number of mortgages being approved.

Activity remains weak overall, with potential buyers still nervous about high interest rates.

But the latest Bank of England data shows approvals for house purchases rose to 55,200 in January from 51,500 in December.

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This was the highest level since October 2022. Borrowing on credit cards also picked up last month. People took on £1.9bn more in credit on cards, car finance and other loans in January than they repaid.

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Mortgage lenders have been shifting the interest rates charged on home loans at a rapid rate since the start of the year. This started with some significant cuts to the cost of new fixed-rate deals.

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BBC News

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Why the ‘mood music’ surrounding the housing market outside London has changed

An influx of new residents into Manchester, Birmingham, Leeds, Bristol, Edinburgh and Glasgow helped the housing market remain resilient during 2023, according to a new report.

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New research from global property advisor JLL shows there was a surge in demand from renters and buyers for prime residential properties across the UK’s ‘big six’ despite high inflation and interest rates.

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The report, which tracks residential development activity, prices and rents across the six areas, highlighted a desire from city centre residents to live in ‘vibrant, highly-amenitised and well-connected central locations’.

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City A.M.

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Calls grow louder for urgent stamp duty cut to boost property market

Propertymark is the latest trade body to call on the Bank of England to cut interest rates to boost demand for property.

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It sees lower rates as key to increasing affordability levels and consumer confidence, particularly among first-time buyers, as well as ease the financial strains on homeowners in general.

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The news comes as property website Zoopla found that people who are buying their first home are paying an average of £244,100 – this is £20,300 below the local market average.

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Source: Property Industry Eye

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House prices fall by -1.4% in December – ONS

Average house price annual inflation was negative 1.4% in the 12 months to December 2023, compared with negative 2.3% (revised estimate) in the 12 months to November 2023, according to the latest data from the Office for National Statistics (ONS).

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The average UK house price was recorded at £285,000, which is £4,000 lower than 12 months ago.

Average house prices in the 12 months to December 2023 decreased in England to £302,000 (negative 2.1%), decreased in Wales to £214,000 (negative 2.5%) and increased in Scotland to £190,000 (3.3%).

The average house price increased in the year to Q4 (October to December) 2023 to £178,000 in Northern Ireland (1.4%).

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On a non-seasonally adjusted basis, average UK house prices increased by 0.1% between November 2023 and December 2023, compared with a decrease of 0.8% during the same period 12 months ago.

Of English regions, annual house price inflation was highest in the North West, where prices increased by 1.2%.

London was the English region with the lowest annual inflation, where prices decreased by 4.8% in the 12 months to December 2023.

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Source: The Intermediary

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UK house prices rise at fastest rate since January 2023

UK house prices rose 2.5% in the year to January, recording the biggest increase since January last year, as lower mortgage rates and fading inflationary pressures led to increased buyer and seller confidence, Halifax has said.

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January marked the fourth consecutive monthly rise, with a 1.3% uplift on December, the UK’s biggest mortgage lender said, with the average home costing £291,000, £3,900 more than in December.

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Kim Kinnaird, the director at Halifax Mortgages, said: “The recent reduction of mortgage rates from lenders as competition picks up, alongside fading inflationary pressures and a still-resilient labour market has contributed to increased confidence among buyers and sellers.

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Source: The Guardian

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Rental Market Crisis As Demand Continues To Outweigh Supply

Letting agents have highlighted a persistent high demand for rental properties, coupled with a significant decline in available supply. This imbalance is primarily attributed to the dwindling number of new landlords entering the market, exacerbated by existing tenants choosing to stay put to circumvent the hike in rental prices.

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A recent survey conducted by the Royal Institution of Chartered Surveyors (RICS) among its members has unveiled a noticeable uptick in tenant demand throughout the three months leading to January. Despite this, there’s a sense of the market cooling off, possibly mitigating the ongoing reduction in new landlord listings.

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To view full article please click the link below.

Source: Landlord Knowledge

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Should You Track the Market or Lock it In? Unveiling the 2024 Tracker Mortgage Advantage in the UK

The year is 2024 and for UK homeowners, navigating the mortgage landscape can feel like a tightrope walk. Interest rates are fluctuating, fixed-rate deals remain competitive, but a potential glimmer of hope shines through: tracker mortgages.

For the uninitiated, tracker mortgages mirror the Bank of England’s base rate, meaning your interest rate adjusts accordingly. So, the question arises: are tracker mortgages a viable option in 2024, and can they truly surpass the stability of fixed rates? Let’s delve into the key benefits and considerations to help you decide.

Unlocking the Potential Benefits of Tracker Mortgages in 2024:

Potential for Lower Rates

While current fixed-rate deals are enticing, they reflect a cautious market anticipating future rate rises. Tracker mortgages, however, track the base rate, which could fall in 2024. This translates to potentially lower monthly payments and significant cost savings over the mortgage term.

Flexibility and Freedom

Unlike fixed-rate counterparts, tracker mortgages often come with no Early Repayment Charges (ERCs). This translates to greater flexibility. You can overpay without penalty, capitalizing on lower rates and potentially shortening your mortgage term. Moreover, some trackers offer the option to switch to a fixed rate penalty-free if the market shifts, providing an added layer of security.

Transparent and Predictable (to an extent)

While future rate changes are never guaranteed, the base rate serves as a clear reference point, making monthly payment fluctuations more predictable compared to fixed rates, which are subject to market uncertainties.

Understanding the Differences and Benefits of Fixed and Variable Mortgages

Riding the Economic Wave

If economic forecasts hold true and the base rate starts falling, tracker mortgages allow you to capitalise on these reductions immediately. Fixed-rate borrowers, on the other hand, remain locked into their initial rate, potentially missing out on these savings.

However, the tracker mortgage journey isn’t without its caveats:

1. Interest Rate Risks: As the base rate rises, so do your monthly payments. This increased financial vulnerability can be stressful, especially for those on tight budgets.

2. Market Volatility: While trackers offer potential savings, they do expose you to fluctuations in the base rate. This can be unsettling for homeowners seeking guaranteed stability.

3. Limited Availability: Tracker mortgages are not as widely available as fixed-rate deals, and lenders often impose stricter eligibility criteria.

UK house prices to rise by 3% in 2024

So, is a tracker mortgage right for you in 2024?

Ultimately, the decision depends on your individual financial situation, risk tolerance, and economic outlook. If you’re comfortable with some flexibility and potentially lower rates, and you believe the base rate might fall, a tracker mortgage could be an attractive option. However, if you prioritise stability and predictable monthly payments, a fixed-rate deal might be more suitable.

Remember, carefully assess your financial circumstances, thoroughly research the market, and consult a qualified mortgage advisor before making any decisions.

As a Commercial Finance Broker work with ALL UK Mortgage Lenders offering all options for tracker, fixed and variable mortgage deals and have highly experienced CeMAP Mortgage Advisors to discuss your needs, so Contact Us today for totally FREE quote and no-obligation advice.

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UK house prices to rise by 3% in 2024

Knight Frank has revised its UK house price forecasts as inflation is falling faster than expected, with the company now suggesting that house prices will rise by 3% in 2024.

This compares to a decline of 4% which was predicted in October.

Knight Frank also expects cumulative growth of 20.5% in the five years to 2028.

This is partially a result of stronger demand, as the number of mortgage approvals was 10% higher in November than the previous year and the firms expects a double-digit percentage increase in sales volumes this year compared to 2023.

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The report forecasts slightly lower growth for the mainstream London market (+2%) this year as continued affordability constraints in the capital mean lower-value areas of the country are likely to outperform.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

In the prime country house market, Knight Frank expects a narrower decline this year (-2%) as the market comes down from the highs of the pandemic in recent years.

By Jodie Bradley

Source: Bridging & Commercial