In an act of resilience against the forecasts for the first half of the year, the housing market has recorded an average house price near the peak recorded in 2022. Expectations for the first half of 2024 were for consumers to still feel the impact of inflation as it slowly creeped toward the target level of 2.0%. In addition, borrowing would remain expensive as the Bank of England’s Monetary Policy Committee (MPC) put pressure on inflation to remain on a downward trajectory toward target. The ability to buy a home was considered to be more difficult to accomplish until inflation eased borrowing costs later in 2024. This would cause a stall in growth in the housing market, as well as lower asking prices and buyers would return in the last part of the year and possibly not until 2025.

In the latest report from Nationwide, the February data revealed the first annual house price increase in more than one year. There was a 1.2% increase in the average house price for February 2024 over February last year. This comes after a decline of 0.2% in January. It is a stronger housing market report than forecasted by several experts including the economists poll completed by Reuters with an expectation of a 0.3% month on month increase and a 0.7% annual increase.

The UK housing market is being forecasted to make a strong stance throughout the year. This comes only months after it was expected the housing market would falter as hopeful home buyers struggled to climb onto the property ladder. The lack of demand was hoped to bring down asking prices and home buyers would eventually return, but not likely would there be a strong rebound until 2025. At the same time, it was expected inflation would no longer be a problem and borrowing would cease to be as expensive next year as it is now.

First-time home buyers are having to look for help to grasp their dream of homeownership. A recent report stated the average length of time to save for a deposit is ten years. Inflation has made it even harder to save money for a deposit. In addition, borrowing is expensive and house prices are high, especially for first-time home buyers. It is not easy to buy a home today and it only looks to get more difficult.

Hopeful home buyers are expected to be presented with a scheme that could make all the difference in bringing affordable property purchasing into reach. In the spring budget, Chancellor Jeremy Hunt, will present a 99% mortgage scheme for new builds. This would reduce the amount of a deposit required for a property to only 1% of the purchase price. The purpose of the scheme is to assist people onto the property ladder as well as help bring more housing into the market.

Homeowners seeking remortgages are helping to push up the activity in the mortgage lending market. This could be surprising due to the fact that there had been more opportunities to find lower rates in mortgage lending than in remortgages. While it is expected that homeowners would be avoiding their lender’s standard variable rate (SVR) in favor of a lower interest rate remortgage, with mortgage offers for home buyers under the standard base interest rate it would be expected that there would be a mortgage lending boom. The issue might have been that the lowest interest rate offers were reserved for home buyers able to qualify with large deposits, and credit histories with few flaws, if any.