In the final report for the year, Nationwide released their data revealing a decline of 1.8% in the average UK house price to £257,443. Cash purchases remain fairly steady and running above cash buys recorded prior to the pandemic, while those purchasing a home with a mortgage have declined to below 20% of pre-pandemic levels. The higher cost in borrowing is considered to blame for fewer home buyers in the housing market and Nationwide forecasts no growth in 2024, but possible further decline.

Home buyers remain active in Northern Ireland and Scotland, which are the only areas recording house price growth for the final quarter of 2023. Northern Ireland realized a 4.5% increase to the average house price of £184,593 for October to December, while Scotland had a 0.5% increase to a new average house price of £179,208.

Overall, England had a house price decline of 2.9% in comparison to last year. The largest house price fall was in East Anglia with a 5.2% decline. 

Since purchasing a home has become more difficult for hopeful home buyers, demand for property has decreased while renting demand has increased. This has led to a forecast of higher rental costs in the coming year as house prices decline. Those intent on avoiding rental costs and climbing onto the property ladder could benefit from following the trends of some first-time home buyers in considering overlooked properties that are lower in cost and need some homeownership care to bring them back to their full glory.

Home buyers keeping watch on lenders’ offers will have noticed that the lack of demand for mortgages has led to a competitive market as lenders fight for the attention of home buyers. Some lender deals have had interest rates at or below the Bank of England’s standard base rate of 5.25%. 

The more relaxed outlook on the risk of lending is credited to the decline in inflation over the last quarter of the year. The latest inflation report had it declining from 4.6% to 3.9% in November. As it has edged toward the Bank’s target of 2.0%, there is hope of a possible rate cut later next year, but certainly it lowers the chance of another rate hike.

For homeowners, the competitive lending environment has not been as strong. There are fewer offers at or under the base rate of 5.25%, but there are savings to be found for those that are willing to push loyalty to their current lender aside and shop for a new deal. 

Going online to shop with a remortgage broker could put numerous remortgage quotes in hand from a variety of lenders in a matter of minutes. Brokers also might offer exclusive deals not found directly from lenders. Homeowners could also go from one lender site to another to gather quotes to compare. Once quotes are gathered, a homeowner has the option to take the next step to secure a remortgage, but there is no obligation to do so and many shop online for a remortgage to review as to what offers are available.

Despite the optimistic data concerning inflation, the relief to consumers will come later. Inflation is still high for food prices at 9.2% which will continue to cause financial strain on the family household budget and for individuals as well. The winter could shape up to be difficult with higher costs of energy as consumption increases over winter despite the cut in energy costs.

There are approximately 1.6 million homeowners coming to the end of their current mortgage term in the coming year. The current interest rates are much different than would have been seen two years ago when one of the most popular mortgage deals was a two-year fixed mortgage. The base rate at the start of December 2021 was almost zero at 0.1%, and the December meeting of the Monetary Policy Committee (MPC) resulted in a rate hike that would continue to happen during the next thirteen consecutive meetings throughout 2022 and into 2023.

The Bank’s base rate at the end of December 2021 was 0.25% and it stayed until the next MPC meeting in February when the rate was hiked to 0.50%. Considering the two rates of January 2022 at 0.25% and January 2024 at 5.25%, one can see the financial impact leaving behind an older, fixed rate deal would have on a budget. 

First time home buyers have the choice of facing higher rental rates in 2024 or getting creative to make their first property purchase. Homeowners have the choice to remortgage at the end of their mortgage term or face higher interest rates as they are transitioned to the lender’s standard variable rate (SVR).

The next year appears to be shaping up to be one of choices and taking action that can lead to opportunities to save and gain peace of mind are certainly possible. It is all a matter of not avoiding the small tasks to gain big rewards, such as shopping online for a remortgage deal.