A lot of the people I have been speaking to over the last few months haven’t been expecting any great upturn in 2024. However, recently there has been less negativity in the conversations, and even a detectable hum of positivity when looking to the future of the market.
According to Nationwide, house prices improved to their strongest rate in a year (The building society’s index found the average house price increased by 0.7% in January on the previous month).
Last week, RICS released their January 2024 UK Residential Market Survey with headline comments that:
- Results for buyer demand, agreed sales, and new instructions all move out of negative territory
- Sales expectations improve further at the three and twelve-month time horizons
- House price declines continue to ease, with London seeing a largely stable trend emerge
This outlook is influenced by expectations of future interest rate cuts by the Bank of England. The Monetary Policy Committee of the Bank of England meet next on Thursday 21 March – will they be satisfied sufficiently to reduce the interest rate? Despite hope for a reduction, it seems that is a little way off still.
Mortgage affordability is still a significant challenge, and any further unwelcome surprises with regards to inflation may still cause interest rate expectations to be revised. However, at least according to the respondents to the RICS survey, +44% believe that sales volumes will increase over the next twelve months.
I find myself contemplating recovery with the words of RICS Senior Economist, Tarrant Parsons that “the outlook has now turned modestly brighter on a consistent basis” ringing in my ears.
Indeed, with news that Britain's 'big five' banks prepare to deliver record-breaking total profits, one would think that they are in a fairly strong position to lend more and at better rates as the market starts to pick up.
For our part, our indemnity policies will continue to help ease the process in an affordable and efficient manner, removing unnecessary barriers and delays.
I wonder if you feel the same, why don’t you share your thoughts with us?
Background reading and supporting articles:
Inflation unchanged at 4% in January | Evening Standard - When will we get back to low inflation? | Bank of England
Best UK Residential Mortgage Rates This Week 2024 (moneyfactscompare.co.uk)
Four more major banks cut mortgage rates - when will two-year fixes go below 4%? | This is Money
Two-year mortgage rates see biggest monthly drop since 2022 (cityam.com)
HSBC UK cuts mortgage rates and now offers lowest ever rate - About HSBC | HSBC UK
UK Residential Survey January 2024 press release (rics.org)
Bank rate maintained at 5.25% - February 2024 | Bank of England
Britain's 'big five' banks prepare to deliver record total profits | Evening Standard
