It has been a rollercoaster year in the mortgage world, with rates moving up and down with each new piece of economic data. The housing market has been bumpy, too. In September, prices recorded the first annual fall for a decade, according to official data, but lenders say demand has been growing in recent months. Anyone looking to buy a home soon will be wondering what 2024 has in store.
This week there have been reports that the government is working on a scheme to help first time buyers , which could have an impact on how easy it is to borrow and on property prices.
But in the meantime, what can you expect from mortgage rates and the housing market? We asked some experts for their forecasts.
Mortgages: deals below 4%
The new year “could start with a bang” on the mortgage front, says David Hollingworth from the broker firm L&C Mortgages. It has been a tough year for many homebuyers and those looking to remortgage, but a bigger-than-expected drop in UK inflation in November has intensified the downwards of borrowing.
pressure on the cost The drop fuelled expectations that the Bank of England could cut interest rates as early as spring 2024, and already a five-year fixed rate mortgage deal priced at below 4% is on sale for the first time since May. Launched by a small lender called Gen H, it has a rate of 3.99%, is for loans up to 60% loan-to-value (LTV) and carries a £999 fee.
The move by Gen H should set the tone for more cuts in the new year, assuming money market swap rates - which largely determine the pricing of new fixed deals - remain at current levels, Hollingworth says. "I think we could see lenders come out swinging to get off a good start," he adds.
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