As 2024 rolls to an end, it’s time for another look back at the year gone and take stock ready for the next 12 months.
12 months of a very different mortgage world (again).
I seem to have written ‘roller coaster’ as the introduction to these retrospectives for years now. Looking back over events since the start of this decade it’s perhaps not surprising though. Covid, the tenure of Liz Truss, the cost of living crisis, and other factors created a very variable market to look back on every year, so there has always been plenty of ups and downs to talk about.
So, what was 2024 like? Well (…Sorry, I am going to need to say it again this year) it was a bit of a roller coaster ride.
2024 in Perspective.
After all the economic shifts, policy changes, and changing consumer behaviour, the news had plenty to say on the topics of mortgage rates, lending practices, and housing affordability. It was, once again, a year of surprises. That said, there was also a good amount of stability at times and because of that, a lot of optimism.
Because there were fewer ‘big events’, it would be easy, but a mistake, to see last year as a little less exciting than the previous ones. Perhaps we have become so used to momentous incidents like the cost of living hikes, interest rate rises and sudden shifts in economic policy, that anything less seismic, seems a damp squib in comparison. So, while it may not have been explosive, 2024 had plenty of drama and a lot to look back on.
Economic Landscape and Interest Rates
We started 2024 with the Bank of England maintaining a base rate of 5.25% in an ongoing attempt to combat persistent inflation. As we have pointed out over the year, these rates are not historically exceptional but still high compared to recent times. Regardless of the history though, they led to increased mortgage costs, with average two-year fixed rates reaching 5.44% and five-year fixed rates at 5.17% by mid-year.
Overall, it was a tough few months for first-time buyers and remortgages in general. We spent a lot of the time working hard to make sure that anyone we saw got the best available deal. Fortunately, the lenders, who had seen a slowdown in new business, responded with some pretty good options and we managed to get a lot of people into new houses and favourable remortgage deals.
House prices had an interesting year.
Many of the same issues influencing the mortgage market also affected house prices. As a result, the cost of property seemed to become a sort of randomly bouncing thing at times. Depending on which area of the country you were in (and where you read your news) the price of property stumbled, raced up, dropped, stagnated, fluctuated, and stayed steady. Not necessarily in that order, and sometimes seemingly all at once. OK, I am being a little flippant there perhaps, but it was a very confusing year. At the end of it though the average house price had reached £292,000 by September, a 2.9% increase from the previous year. Certain areas saw a pronounced growth; for instance, North East Derbyshire saw a 9.7% rise. On the other side of the coin, some regions faced decline. The Portsmouth area, for example, showed a 4% drop in the average house price. These variations just go to show that there were a lot of different factors at play, and they really bounced the housing market around throughout the year. Despite the ups and downs though, most areas showed a slow, steady growth.
One very helpful boost came as the buying process continued to pick up speed after the great slowdown caused by Covid. The faster the period from offer to completion, the less time for the unexpected to happen. That meant we were able to tailor the right deal for many of our clients and see them into their new homes in a reasonable timeframe.
The General Election caused… well not a lot really
Historically speaking, a general election tends to slow down property transactions. This is because buyers, sellers, and lenders, tend to wait to see who will win and what it could mean to interest rates, salaries, affordability, and so on. In the months leading up to the election, the market did experience a slight generalised deceleration in activity, and yes, some buyers did adopt a cautious approach, but nothing like in the past. Post-election, the market began to stabilise.
As we mentioned earlier, for the most part house prices are showing a much stronger rise than last year. What effect the new government will have on housing in the long term remains to be seen, but there are some encouraging noises being made, particularly around first-time buyers.
2024 – not all bad.
2024 was another unsettled year at times, but at least we didn’t have the seismic events of previous years to deal with. As a result, while it was still a roller coaster, it wasn’t quite at breakneck speed or full of sudden drops and corkscrews.
The good news was that as I am writing this, the market is quite buoyant, there are plenty of great deals available from the lenders, and we are here to help when you are ready for your next mortgage.