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The reduction in rates from the mortgage lenders has brought a cautionary optimism to the outlook for the housing market in 2024.
The Halifax announced a reduction of 0.83% for its 2, 5 and 10 year fixed rate products increasing to 0.92 per cent for existing customers.
The Halifax also confirmed it will be reducing its remortgage rates by up to 0.32% on selected 3-year fixed rates from Friday, 5th January 2024. This mid range fixed rate is not offered by many lenders and is often seen as good middle ground for those looking to remortgage.
All this activity looks likely to prompt other lenders to follow suit.
With inflation falling faster than expected pressure is on the Bank of England to reduce interest rates and encourage further falls in mortgage rates.
Competition amongst lenders is fierce with in a smaller market place – first time buyers with a mortgage fell to a 10-year-low of just 290,000 in 2023.
Despite market indicators still showing a negative trend, sales expectations are looking positive for the first time in three months with a rise of 6% expected and looking toward the future, a 24% increase in sales is forecast in the next twelve months, the most positive outlook since January 2022.
According to Rightmove the number of homes being listed by estate agents on Boxing Day 2023 has nearly tripled (+173%) since pre-pandemic 2019.
Although house prices still look set to continue in decline the rate of decline is slowing.
According to Simon Rubinsohn, RICS chief economist, “The latest RICS Residential Market Survey provides further evidence that sentiment is a little less negative than previously was the case with, critically, the new buyers enquiries indicator finally beginning to stabilise.
“This is being aided by increased confidence that the interest rate cycle has peaked which is reflected in somewhat more competitive mortgage products coming to the market.
“However, with the cost of money likely to remain elevated for some time to come and the economic outlook still downbeat, it is not surprising that the overall tone to the anecdotal remarks from survey respondents is still quite cautious.”
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