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Halifax December 23 House Price Index - reaction

ended 05. January 2024

The Halifax has this morning published its December house price index. Newspage sought reaction from a number of property experts, below.

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15 responses from the Newspage community

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December was an absolute humdinger. We are coming off the back of our busiest December as a business and the busiest start to a year that we have ever had. Mortgage rates are decreasing with each day that passes, creating even more demand. This is on top of buyers coming to terms with the reality of our current economic situation and the fact that the rates we now have are the new normal. Our diaries are booked out for the next two weeks, which is a long time in the mortgage industry. I am very excited about 2024 and the future is looking far brighter than this time last year, as we were still shellshocked by the mini-Budget. Whilst social media is awash with unqualified nay-sayers spouting bile about true house prices dropping, house prices and sentiment are both on the up. I for one am not concerned.
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December saw a renaissance in the property market. It literally went from the dark ages to modernity in just one short month. Lenders were proactive in cutting rates, and people have now adjusted to the new normal and accepted rates as they are. It sounds dramatic but it genuinely felt like the market was reborn last month, and this month, based on the activity levels we're seeing, is definitely following suit. I am full of optimism for the coming year and I think we may see a buying frenzy similar to post-Covid as there is an awful lot of pent-up demand.
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I'm going to throw it out there. I think house prices will marginally increase this year, despite the Halifax forecasting a fall of between -2% and -4% in 2024. We still have a shortage of housing that's not going away and with mortgage rates looking more affordable, demand will increase. Front-end activity is brisk, and I don't think we've ever had more enquiries between Christmas and the New Year. We're less than a week into 2024 and it's already a blinder.
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With Rightmove reporting record views on Boxing Day, it appears that buyer interest has been piqued by the prospect of lower borrowing costs in 2024. On the other hand it’s panic stations for those coming off ultra-low fixed rates and facing significant increases in their mortgage payments. 2024 will prove to be a pivotal year as it’s not without its challenges with many geo-political factors still able to derail the markets. Many brokers have seen a huge uptick in enquiries this year and that will no doubt translate into purchases at some stage and help house prices recover.
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December buzzed with demand, leaving many in the property and mortgage industry to work right up to Christmas Eve. But there are still a number of challenges ahead. Lower mortgage rates will attract more buyers, boosting prices, but a sudden and unexpected base rate hike if inflation doesn't play ball could crash the party. A harmonious global economy could sustain growth, while a discordant recession could dampen demand. Limited supply keeps prices buoyant, but a surge of new listings could favour buyers. Though sentiment is up, there are still a lot of variables in play. Interest and mortgage rates, inflation, the economy and stock levels will all contribute to what happens to prices in 2024.
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Last year was the most challenging for borrowers in the history of my company. However, in the coming weeks, we should gain clarity on the borrowing environment for 2024 as lenders rush to adjust rates in response to economic conditions. Although it may take some time, optimism is expected to rebound sharply among potential movers. The upcoming Budget, potentially offering additional incentives, may further contribute to encouraging trends.
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The property market is showing promising signs of recovery. We expect to see homeowners more confident and looking to step up the ladder in 2024, which will release a good amount of quality stock for the bottom end of the market. This is likely to bring further increases in prices. With mortgage rates on a seemingly inexorable downward trend and the markets expecting a base rate cut in the near term, greater transaction volumes will assist the upward trajectory of prices this year on. We are seeing a fair amount of Shared Ownership transactions now that the bones of Help to Buy have rightly been laid to rest.
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Demand in December was high from purchasers and the festive drop-off came later than expected. With appetite to buy and move building in the market, we now just need to see the growth in property stock levels to build momentum in 2024. Rate drops will continue as lenders fight to ensure 2024 is not a repeat of the poor lending volumes of 2023. There is also renewed confidence in the medium-term outlook of the economy, even if we have to pass through a mild recession to get there.
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Property prices are intrinsically linked to consumer confidence, which is improving by the day amid the current wave of mortgage rate cuts. There is some space for further price cuts, especially where sellers have been holding out for 2021 prices, but as mortgage rates improve and confidence grows, we should see the housing market reach its bottom some point this year.
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2023 was very challenging for those looking to finance or refinance property, which resulted in price reductions across the board, though these weren’t as deep as many expected. As the year drew to a close, the mood music started to change, with affordability improving due to lower rates, and as a result the value reductions gradually slowed. 2024 is looking to be a far more positive year, though many will tread with caution and as such it’s likely that values will remain subdued. The fact that house prices in the South East saw the most downward pressure reflects the fact that they were higher in the first place.
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December saw renewed buyer interest, no doubt encouraged by lower mortgage rates. Many potential buyers held off in the autumn as rates were so high. Some of that demand is coming through now. Assuming any recession is only mild, and perhaps over by the summer, I expect house prices to fall gently this year, perhaps by 5%. But if the economy truly tanks and people start losing their jobs, 10% or more is possible.
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Over the past 2-3 months, we have seen house prices recovering and December was exceptionally - and unseasonably - strong. The usual festive drop-off in demand simply didn't materialise. Over the next few months, we may see more of this as rates continue to reduce and buyers return to the market. If the market remains stable then it's likely house prices will stay relatively stable, but if there are bumps along the road, this could lead to more volatility for house prices.
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We saw a significant increase in enquiries in December, which is unusual for that time of year. Coupled with reducing interest rates from lenders, and when you throw in that we will have a continued shortage in housing stock in the country, it’s unlikely we’ll see the significant reduction in house prices that some people have been predicting. All of the indicators are showing that buyers are returning to the market and as long as sellers decide to come back on, then we should be in for strong 2024.
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Lenders are quickly adjusting rates in response to falling inflation and expectations of a rate cut. It might take a bit, but we're optimistic that potential movers will start feeling hopeful again. And there's the upcoming Budget, which might throw in some extra perks and add to the positive vibes. December saw a fresh wave of interest from buyers. Lower mortgage rates seem to be the driving force behind this renewed enthusiasm. Many buyers, holding off in the summer and early autumn due to high rates, are finally making their moves now.
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Demand for property is strong as the window shoppers and voyeurs drop out of the market with only serious, qualified buyers left. House prices will remain turbulent as the supply of ex-buy-to-let properties continues to flow. The trajectory of house prices will be governed by qualified demand. Demand always outstrips supply but stricter affordability criteria among lenders has created a bottleneck in demand. As soon as the blockage is released either by rates dropping further or the introduction of a Government-backed guarantee scheme, activity levels will pick up in earnest. Every buyer has their maximum and every seller has a bottom line number they can't go below. Everything in between is just negotiation. The key theme in the housing market is always that we don't have anywhere near enough good quality housing available to meet the needs of an ever-growing and ageing population.