If the base rate goes down in 2024, mortgage rates should fall, and property prices should rise this year, says the lender. Read more about the latest house prices and Halifax’s expectations for the property market.

House prices increased on average by 0.1% in April after falling by 0.9% in March, according to Halifax. The lender says property prices grew by 1.1% annually compared to 0.4% the previous month. A typical UK home now costs £288,949 compared to £288,781 in March.

‘UK house prices held steady in April, rising on a monthly basis by just 0.1%,’ says Amand Bryden, Head of Mortgages at Halifax. ‘Annual growth rose to 1.1% from 0.4% in March, though this can be attributed to the base effect of weaker price growth around this time last year.

Bryden adds: ‘While there is always much scrutiny of monthly price changes – and a degree of volatility is to be expected given current market conditions – the reality is that average house prices have largely plateaued in the early part of 2024.’

Dealing with higher borrowing costs

So what does this mean? Bryden says it’s a sign of the times – in other words, people dealing with the impact of higher borrowing. ‘This reflects a housing market finding its feet in an era of higher interest rates,’ she says. ‘While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability. Activity and demand is improving, evidenced by greater numbers of mortgage applications so far this year, while at an industry level, mortgage approvals have reached their highest point in 18 months.’

The market has been boosted by first-time buyers adjusting expectations and searching for smaller properties. The value of flats has risen most sharply, closing the growth gap on bigger properties.

Affordability issues for buyers

‘However, we can’t overlook the fact that affordability issues are still a significant challenge for both new buyers and those rolling off fixed-term deals,’ says Bryden. ‘Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower rate of cuts.’

Bryden predicts that if the base rate comes down later this year, fixed mortgage rates should also fall. She says: ‘Combined with the resilience displayed by the housing market over recent months, we now expect property prices to rise modestly over the course of 2024.’

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