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Analyst warns house price boost “like a dodgy prawn at a buffet”

Analysts have warned landlords and others interested in the housing market from celebrating too much following the latest Halifax index figures.

The lender says prices rose by 1.1 per cent in December, the third monthly rise in a row - and that means property prices actually grew 1.7 per cent overall in 2023. The typical UK home now costs £287,105, just over £3,000 more than last month.

But Sarah Coles, head of personal finance at business consultancy Hargreaves Lansdown, insists that does not stop 2024 being likely to be tough.


She says: “This doesn’t mean a sales bonanza, because buyers are still thin on the ground, and property is shifting very slowly. Sales actually slowed for the third consecutive month in November, delivering the slowest November in a decade. It means that a rise on paper may not actually do sellers much good in reality if there’s nobody to buy their property.

“The good news is that falling mortgage rates could well inject a little more enthusiasm into the market, Bank of England figures show that more than 50,000 mortgages were approved in November, and while that’s still well below a typical month of 60,000, it has come off the bottom. Mortgage rate cuts in the months since – which have seen two-year rates fall below six per cent - may well help inspire more buyers.

“But like a dodgy prawn at a buffet, there’s bad news lurking that could spoil the whole thing. Halifax has joined the forecasters expecting house prices to fall in 2024. In an environment of higher interest rates, the global economy is slowing, and there’s every chance that economic threats from unemployment to a slowing of wage rises and sticky inflation could put pressure on house prices as we go further into 2024. 

“It means anyone with a property on the market has a golden opportunity to sell in the next few months, and should consider that carefully when setting a price. If all this persuades you to keep your property plans on hold for another year, it’s worth thinking carefully where your deposit is sitting in the interim.”

And Fred Jones, chief operating officer at home buyer service UPSTIX, comments: “Following a record number of property listings on Boxing Day, the medium-term outlook for the housing market is positive, with many lenders entering a mortgage price war as they anticipate interest rate cuts sooner rather than later. However, demand will continue to be low until the middle of the year when the Bank of England’s predicted rate cuts start to truly take effect.

However Mark Harris, chief executive of mortgage broker SPF Private Clients, says that while those remortgaging this year will still see an increase in their payments, the pain will not be as bad as it could have been. 

“The housing market saw a remarkably strong finish to the year, as buyer and seller confidence was boosted by three consecutive interest rate holds and the growing belief that the next move in rates will be downwards.

“Increased competitiveness among lenders leads to lower mortgage rates and we find ourselves in the midst of a price war. With HSBC launching the headline-grabbing 3.94 per cent five-year fix and reductions from Halifax, NatWest, TSB and other lenders, the gloves really are off. 

“With 2023 being a disappointing year in terms of amount of business done, lenders are keen to get this year off to a cracking start. Increased competition, rates aside, may also lead to lenders broadening criteria to attract business with longer mortgage terms or greater flexibility to allow certain variable incomes.  It is great news for borrowers who have struggled with affordability over the past few months as they may now be able to achieve their target loan amount where they couldn’t before.”

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  • icon

    Wait till Andrew Bailey comes along with his spanner to throw in the works when he increases the interest rates again. 😠

  • Peter Why Do I Bother

    Due to demand prices will not drop, most people I know who have been in a position to buy have said they will wait until the start of this year before jumping. Election, vote buying, inflation are all reasons to sit and wait before getting into a fixed rate.

    If anything I can prices rising slightly.

  • icon

    I think they have misjudged on this occasion.
    Large Landlords affected by S24 are having to sell right! The tenant now doesn’t have a home, however a tenant now has the opportunity to buy a house with similar payments to rent. The tenant that cannot get a mortgage due to age, credit rating, benefits etc ARE being marginalised.
    The HMRC, new gov rules GR, Shelter Acorn have collectively created a new underclass. The very people we were housing - well done. Over to you James Turner for your world view on how to help these people. (Bring your calculator)

    Peter Why Do I Bother

    Jahan, no point putting James on anything at this time of the morning he will still be in bed waiting for his mum to wake him up with cornflakes and rattling the teapot.

    His calculator is one of two things either broken or he has run out of talent steering it.... Probably the latter..!


    I think he is still in bed drinking landlords' tears as he mentioned last week.

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    I think that Generation RANT, Shelter and Acorn needs to find deposits for the tenants who wish to buy their own property but struggling to save, instead of ranting and blaming rents and landlords. These so called ceos are only helping themselves to be in their high paid jobs and sitting in their office in front of their PC or at home brain storming against the LL's. They call their jobs as worthwhile work but not getting any outcomes, except increasing costs for the LLs and tenants.

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    HSBC introducing 5 year fix at 3.94%. What is their arrangement fees? Perhaps 7%, so get their income at the outset. Very good for them.

    Matthew Payne

    All pricing their long term fixed rates, a sprat to catch a mackeral. Even if you are minded to go for the security of a fixed rate, the only direction of travel is down. It's worth riding out nasty SVR for a couple of months to see these rates fall. Every quarter % on a fixed rate is going to add up to far more over the term of the product. I did advise clients/friends/family back in the autumn who swallowed project fear and tied themselves into 5.5% fixed rates (some 6%!) that they had to hold their nerve, and fixed rates were not the way to go and the same still applies. Fixed rates have a long way to go to bottom out. As John Cleese said, "I warned you, but did you listen to me? Oh, no, you knew it all, didn't you? Oh, it's just a harmless little bunny, isn't it?"


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