House prices saw a notable rise of 1.3% in November, marking the fifth consecutive monthly increase, according to the latest figures from Halifax. This continued upward trend highlights the resilience of the property market, despite ongoing economic uncertainties.
On an annual basis, property prices have increased by 4.8%, and the typical property now costs £298,083, setting a new record for house prices in the UK. This surge in property values reflects strong demand, limited housing supply, and other contributing factors within the housing market.
Notably, Northern Ireland continues to lead the way with the strongest annual house price growth in the UK, further solidifying its position as a key region in the current property boom. Despite challenges in other areas, Northern Ireland’s market remains robust, with high demand driving prices upwards.
Amanda Bryden, Head of Mortgages at Halifax, shared her thoughts on the latest housing market trends, highlighting the continuing improvement in demand for mortgages. She attributed this positive shift to the easing of mortgage rates, which has significantly boosted buyer confidence. The drop in rates seems to have prompted more potential buyers to consider entering the market, creating a sense of optimism for the property sector.
Despite these positive signs, Bryden emphasised that many buyers and movers are still grappling with significant affordability challenges. While mortgage rates have eased, the overall cost of living, alongside inflationary pressures, continues to strain household budgets. This means that while more buyers may feel encouraged to make a move, their ability to afford properties remains a significant barrier. She also cautioned that buyer confidence may be tested, particularly as the broader economic climate remains unpredictable, with shifts in policies and global factors creating a volatile environment.
Looking forward to 2025, Bryden expressed cautious optimism. She noted that the UK’s positive employment figures, along with expected decreases in interest rates, should continue to support demand in the housing market. However, while these factors could provide stability, Bryden suggested that house price growth would likely be slower compared to previous years. This is due to borrowing costs remaining higher than historical averages, which will continue to put pressure on many potential buyers. The modest pace of house price growth is anticipated as the market adjusts to the higher financial costs, making it a more gradual recovery rather than a rapid surge.
Mark Harris, the chief executive of mortgage broker SPF Private Clients, has shared an optimistic perspective for the housing market in the coming year, predicting improved conditions for both buyers and borrowers. He believes that with ongoing developments in interest rates and other economic factors, the outlook for 2025 could be more positive for those looking to enter the housing market or refinance their existing mortgages.
According to Harris, the recent comments from the Bank of England Governor, who suggested there could be as many as four rate cuts next year, have raised expectations among borrowers struggling with affordability. These cuts, if implemented, would bring much-needed relief to borrowers who have faced higher borrowing costs over the past year, leading to an increase in financial strain for many households. Harris believes this could help ease some of the burden and improve borrower sentiment across the UK.
While this news is promising, Harris also noted that it would take time for these potential rate cuts to have a significant impact on the market. The direction of mortgage rates, according to Harris, is generally downward, but it is important to recognise that this will be a gradual process. The decline in rates won’t be immediate or drastic but will instead occur at a slow and measured pace, giving borrowers some time to adjust to the changing conditions.
For those considering securing a mortgage in the near future, Harris stressed the importance of careful planning. He recommended that borrowers take a proactive approach and speak to a whole-of-market broker. By doing so, they can ensure they are well-informed about the range of deals available and find the best possible offer tailored to their individual circumstances. Given the complexities of the current market, having expert guidance can make a significant difference in securing the most competitive rate.
Ultimately, Harris remains optimistic that the combination of potential rate cuts, falling Swap rates, and a more stable economic environment could help restore balance to the housing market. However, he urged borrowers to be patient and plan ahead to ensure they make the most informed decisions as conditions continue to evolve. The housing market may still face challenges, but with careful planning and the right advice, borrowers can navigate the changing landscape more effectively.
Karen Noye, a mortgage expert at wealth management firm Quilter, offers a more cautious perspective on the current housing market. She highlights recent data from the Bank of England, which indicates that mortgage approvals have reached their highest level since mid-2022. This uptick, coupled with a reduction in quoted mortgage rates, suggests that more buyers are returning to the market, likely encouraged by the more favourable lending conditions.
However, Noye points out that while these trends are promising, the market remains finely balanced. She notes that despite the rise in mortgage approvals and improved rates, many challenges remain. The recovery of the housing market will largely depend on the effectiveness of government policies aimed at supporting housebuilding and improving access for first-time buyers. These measures will be crucial in ensuring that the current positive momentum can lead to long-term stability.
Looking ahead to 2025, Noye emphasises that much of the market’s future success hinges on whether these early signs of recovery can be sustained. She warns that ongoing economic uncertainty, including factors such as inflation and geopolitical issues, could have an impact on the housing market. While the recent improvement in conditions is encouraging, it is essential to consider the broader economic context and the potential risks that could derail progress.
Noye’s cautious approach underscores the fact that while short-term improvements are visible, long-term recovery may require more than just favourable lending conditions. Government intervention and broader economic stability will play pivotal roles in determining the overall direction of the housing market in the coming years. The key challenge will be balancing immediate recovery with sustainable growth that benefits all sectors of the housing market.
In conclusion, Noye’s comments suggest that while there is reason for optimism, caution is still needed. The housing market may be showing signs of recovery, but its long-term health will depend on the interplay of several factors, including government action and the broader economic climate. Keeping a watchful eye on these developments will be critical as we move into 2025 and beyond.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property