Due to factors such as rising mortgage rates, house prices fell in 2023 but by the modest amount of just over 1%. This technically means that first time buyers are in a better position to afford their first property than they were at the start of last year but the market is still high, with the average house price sitting at over 8x the average salary. Additionally, mortgage rates ended 2023 at an average of over 6% for a two year fixed deal.
As we enter 2024, you may be wondering whether house prices will continue to fall and whether mortgage rates will stay high. The honest answer is that nobody knows and anyone who says otherwise is lying or a fool!
In terms of house prices, as usual, some economists think they will fall, with rates being predicted between 1% and 4%. This is attributed to the issues facing us as a result of the rising cost of living, more people being forced to sell as their previously cheap mortgage deals come to an end, and other external factors in the current economic climate. However, other economists predict growth of between 1% and 3%, so it is hard to know which way to lean. No-one is predicting any significant change and perhaps there is comfort in that.
In terms of mortgage rates, again there are no clear signals. The current base rate is 5.25%, and whilst some economists are predicting this could drop to close to 4% by the end of the year, Bank of England Governor, Andrew Bailey, has suggested there will be no cuts for the foreseeable future. If lenders think the base rate will stay high for a while, the rates they offer on mortgages will stay high as well. The rates are only likely to drop when lenders feel the economic forecast is improving. Again, no-one is predicting any significant increase or decrease.
In terms of activity in the market, there is definitely less than we had in the recent peaks of 2020/21 but there is still a healthy amount of life out there. Whilst economic uncertainty isn’t good for the market, there are always certain circumstances that will force people into buying or selling. It is perhaps more of a buyers’ market just at the moment with offers being accepted at below asking price and it taking longer to get sales agreed. That never lasts too long however because as the volumes drop, buyers start to outnumber sellers so pricing becomes more resilient and so the cycle continues.
Whatever happens in the market, it remains the case that buying a house is probably the largest transaction you will undertake and getting good quality advice is essential. Added to that, as in so many cases, staying local can be very beneficial, not least for the practicalities of signing documents if things become time critical. At Dawson Hart, we know the local market, we know the local estate agents and we know property. If you are thinking of buying or selling this year, contact one of our friendly team for a no obligation discussion and indication of the likely costs involved.
Due to factors such as rising mortgage rates, house prices fell in 2023 but by the modest amount of just over 1%. This technically means that first time buyers are in a better position to afford their first property than they were at the start of last year but the market is still high, with the average house price sitting at over 8x the average salary. Additionally, mortgage rates ended 2023 at an average of over 6% for a two year fixed deal.
As we enter 2024, you may be wondering whether house prices will continue to fall and whether mortgage rates will stay high. The honest answer is that nobody knows and anyone who says otherwise is lying or a fool!
In terms of house prices, as usual, some economists think they will fall, with rates being predicted between 1% and 4%. This is attributed to the issues facing us as a result of the rising cost of living, more people being forced to sell as their previously cheap mortgage deals come to an end, and other external factors in the current economic climate. However, other economists predict growth of between 1% and 3%, so it is hard to know which way to lean. No-one is predicting any significant change and perhaps there is comfort in that.
In terms of mortgage rates, again there are no clear signals. The current base rate is 5.25%, and whilst some economists are predicting this could drop to close to 4% by the end of the year, Bank of England Governor, Andrew Bailey, has suggested there will be no cuts for the foreseeable future. If lenders think the base rate will stay high for a while, the rates they offer on mortgages will stay high as well. The rates are only likely to drop when lenders feel the economic forecast is improving. Again, no-one is predicting any significant increase or decrease.
In terms of activity in the market, there is definitely less than we had in the recent peaks of 2020/21 but there is still a healthy amount of life out there. Whilst economic uncertainty isn’t good for the market, there are always certain circumstances that will force people into buying or selling. It is perhaps more of a buyers’ market just at the moment with offers being accepted at below asking price and it taking longer to get sales agreed. That never lasts too long however because as the volumes drop, buyers start to outnumber sellers so pricing becomes more resilient and so the cycle continues.
Whatever happens in the market, it remains the case that buying a house is probably the largest transaction you will undertake and getting good quality advice is essential. Added to that, as in so many cases, staying local can be very beneficial, not least for the practicalities of signing documents if things become time critical. At Dawson Hart, we know the local Sussex property market, we know the local estate agents and we know property. If you are thinking of buying or selling this year, contact one of our friendly team by phone on 01825762281 or email churchstreet@dawson-hart.co.uk for a no obligation discussion and indication of the likely costs involved.
We are here for you, when you need us.