There’s been a slight dip in house prices, but buyer demand and general activity in the property market have improved.

House prices have dipped recently, but there is renewed interest among prospective home buyers, and the market is showing improved momentum.

Average house prices dropped by 2.1% in the year to November 2023, according to figures from the Office for National Statistics (ONS). The average UK home is now priced at £285,000 – £6000 lower than a year ago.

However, a survey published by RICS (Royal Institute of Chartered Surveyors) for December showed that activity in the property market is picking up, with a spokesman reporting ‘tentative optimism for 2024’.

Property website Zoopla has reported that buyer demand in the first week of January was up by 14% compared to the first week of 2023. New sales agreed were up by 16% compared to last year.

Asking prices up

Vendors are being bolder when putting their properties up for sale – Rightmove reports that the asking price of a home in Britain increased by £4500 in January compared to December.

While we remain reasonably optimistic after a challenging year in 2023, the market may still be unpredictable.

Consumer Price Index (CPI) inflation, which relates to goods and services, crept up slightly in December from 3.9% to 4%. Analysts weren’t expecting this slight increase, as inflation had previously been falling faster than anticipated.

That said, mortgage rates have come down lately, which is encouraging news for home movers or anyone needing to remortgage. In fact, they are currently standing at their lowest level for six months, according to Moneyfacts.

‘This is the first time we’ve had disappointing inflation news since July,’ says MB Associates’ Managing Director, Monica Bradley. ‘Back then, the cost of fixed-rate borrowing had started to increase again following months of steady reductions.

‘I’m not suggesting this will be the case now,’ adds Monica. ‘But with swap rates ticking up and a quickly abandoned rate cut by a mid-sized lender recently, I can see the cost of fixed-rate pricing settling down for the time being.’

What if you’re due to remortgage?

If you are due to remortgage soon, you may be holding off in the hope that mortgage interest rates will continue to come down. However, it’s not advisable to do nothing.

‘I’ve had conversations with clients recently who have wanted to hold off committing to a fixed rate product for fear that fixed-rate pricing will continue falling,’ says Monica. ‘My advice would be to secure a product sooner rather than later, and then if rates do continue to decrease, you can trade the rate you’ve secured for a better one. And if rates increase, you’ve secured a rate at the lowest point in months.’

We recommend speaking to an experienced mortgage broker and locking in a rate now.

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