New Year...New Rates... New Home?

New Year, New Rates….New Home?

 So we have hit Jan 2024 (and the gym!), we are over the mince pies and we are desperately trying to reduce the percentage of cheese that our bodies now consist of!  

 Currently, there is nothing that gets the perennial ‘lets look at Rightmove’ brigade on their phones more than some lower mortgage rates, and lenders looking at each other to see who blinks first.

 The question on everyone’s lips is – what is the truth about mortgage rates, and what can we expect in 2024? Well, the first bit is easy. Lenders are reducing their rates, yes, the best % are being reserved for the high deposit clients (60% +) but overall the rates are reducing.

 Some say, “they couldn’t get much worse”, and that would be fair, but with some lenders offering a 10 year fixed at 3.99% now, this is a clear signal that they feel the trend over the coming months and years will be downward.

Also let’s not forget these lenders are businesses and they need punters. With a predicted 200,000 to 300,000 less transactions in 2023 (the figures aren’t in yet), that will influence their bottom line, so they must start attracting new clients (often lifelong) sooner or later. With inflation reducing (easy to see this at the petrol pump) they must feel confident that they won’t get their fingers burnt.

 How far will they fall?

That was going to be the next question right? In my humble opinion, I expect the BOE interest rate to drop 2 to 3 times in the next 12 months. Which could see rates around 4 to 4.5% at the end of 2024. Lender swap rates will probably be below that and so we could see offers at 3 to 3.5% to the best loan to value clients but, and probably more importantly, the 10 to 15% loan to value clients could hit 4%.....and that is significant and, in more cases, affordable.

 Any speedbumps?

Yes, of course, but whether this will affect the trend is debateable. The election is potentially set for November (will the Conservatives throw a stamp duty holiday in the mix to get some votes?) And would Labour, if they get in, want to upset a potentially strengthening housing market?

 Across the pond the same is up for grabs but I think that’s a blog in itself, so I’ll save that for another time.  Finally, the cost-of-living crisis is still in the news and balancing the books to potentially move has never been ….well …more finely balanced.

 So, decision time..should you move?

Throughout my time as an estate agent and whatever the market conditions, people move if they have too, if they can afford to, and when the rates were so low…if they fancied it! The last one – “the aspirational mover” will still be on the bleachers for the timebeing but everyone else will fall into one of those categories. The choice of properties for buyers will be excellent, as it has been and that in itself keeps prices….shall we say sensible.

Think of it as a see-saw - on one seat, if you have the lower the rates, the more buyers there are, more properties snapped up and less properties available……the other part of the seat is house prices.