The Housing Market

May 2024

There is a mixed message from Agents, however they are more positive about the prospect for both activity and asking prices.

Due to recent interest rate rises over last 3 months, the house prices have started to fall again, according to Nationwide index they dropped a further 0.4%.

It is not expected that they will fall further, especially as interest rate expectations are predicted to fall again in Quarter 3.

First Time Buyers have disappeared mainly due to affordability and valuations being 20% too high. Landlords are being forced to sell off their properties due to them struggling with higher interest rates.

The government have made several adjustments to BTL market, this may change again with a new government. 

Mortgage Market - Activity

Finally, lower interest rates look closer than they were a few months ago. There has been a recent increase in potential sellers coming back to the market. Cost of living is still affecting affordability; however, lenders say credit is available. Shorter fixed rates are still popular with the hope that they will be cheaper in 2 years’ time.

There are still many issues relating to economy, inflation and wages, however the market expectations have been volatile but for now price in two full 25bp cut in the Bank Rate later this year.

Many High Street lenders increased their rates recently; however, these are now being reduced again following inflation reducing to 2.3%.

It is expected that interest rates will stay high in the near term, with many clients remortgaging with existing lenders. 

House through bubble

(c) Ann Evans of Immediate Mortgage Solutions

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