Last week, it was revealed that house prices are now at their highest since autumn 2022 when buyer confidence dropped following the sharp increase in interest rates.
So what does this mean for the rest of 2024 and beyond?
Let’s take a look.
Firstly, it’s important to say you can never really ‘time the market’. From COVID to interest rates, anything can pop up which can scupper your initial plans. Although, that’s not to say doing your research isn’t important, regardless of whether you’re buying a property to let, or live in.
In the past two months, the Bank of England has reduced the base rate from 5.25%, to 5.0%, with more cuts highly predicted to come before the year is out. This has meant that an increasing number of consumers are feeling optimistic about the economic outlook and are looking to make a purchase that they may have previously been hesitant about.
With more buyer activity and more people looking to make a purchase, sellers are in a stronger position to market their property at a higher price than they may have done over the past couple of years. With lower interest rates also comes lower monthly payments, resulting in buyers being able to stretch themselves a bit further on the overall price of a property.
Now, nothing huge has happened.
And this isn’t likely to change.
In fact, Savills have predicted that house prices will rise by a respectable yet not significant 3.5% in 2025. This is much lower than the huge percentage increases we were seeing around the time of the pandemic, and just after, with rises of 11.4% in the year to September 2021, and 11.9% in the year to August 2022.
This should leave both buyers and sellers quietly confident that they should be able to sell their property or buy a property without huge market changes during the process. This kind of positive market environment is likely to be a contributing factor as to why buyer activity has picked up pace and house prices are starting to rise again.
You may be wondering, should I wait until the end of the year to see if interest rates are reduced further before getting a mortgage in principle?
Whilst this thought process makes sense, it’s not the case that you need to wait!
This is because you can get a mortgage in principle, search for your dream property, and then change your mortgage product during the process if interest rates are cut.
Say you get in touch with a mortgage advisor, you get a mortgage in principle, then the BoE cuts rates, you can actually go back to your advisor and request for a new product to be found with a more competitive rate.
That’s just one of the reasons why working with a mortgage advisor is so beneficial!
If you’d like to find out more, why not get in touch with us?
https://calendly.com/mortgagesims/mortgage-telephone-appointment
