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Halifax November 2023 House Price Index

ended 06. December 2023

On Thursday 7th December, at sparrow's fart, the Halifax is publishing its November 2023 house price index. Last Friday, the Nationwide said house prices edged up very slightly by 0.2% in November and that annual growth was -2%. The building society said falling swap rates, strong wage growth, lower house prices and a lack of supply were stimulating demand. Against this backdrop, a handful of Qs:

  • In your experience, have ongoing cuts in mortgage rates started to stimulate demand?
  • Has the UK residential property market bottomed out or should we expect further price drops next year (and why)?
  • How important is the lack of stock/supply in terms of supporting house prices?
  • How important are the next set of inflation data out on 20th December and the MPC meeting on 14th December?
  • Where do mortgage rates need to get to in order to really boost sentiment and demand?
  • Could the sheer volume of people coming off ultra-low fixed rates next year see a spike in forced sales, putting downward pressure on prices?

Any other thoughts, fire away.

5 responses from the Newspage community

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Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
Though the recent spate of rate reductions from mortgage lenders has started the engine and defrosting process, further stimulus is needed to shift the housing market into gear and really get it moving. All eyes will be on the next Bank of England base rate decision on 14th December, which fortunately comes ahead of the next set of inflation data, so a hold decision is expected in December. The next Monetary Policy Committee meeting is not until February's meeting, which should give some much-needed stability to the market.
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Justin Moy
Managing Director at EHF Mortgages
The rate cuts of the past few months have taken as much as 1.5% off the highest rates for most borrowers. The cumulative effect of all these rate cuts is now triggering people to act, especially first-time buyers. The extra cost of borrowing has been more than covered by the reduction in house prices and owning a property provides a security that renting does not. The sting of higher rates has been eased by the reduction in house prices. The stock of property for sale is still limited in a number of places, as landlords are not exiting the market as quickly as first suggested, alongside the usual issues with supply and demand seen for the last decade or so. If rates continue to slide throughout 2024, we should see fewer homeowners selling for financial need, with the rate shock less significant than a few months back.
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Ken James
Director at Contractor Mortgage Services
The steady stream of mortgage rate cuts over the past few months has given the market an injection of confidence that was sorely needed. Money will never be as cheap as it was a couple of years ago but it's getting cheaper and that's stimulating buyers into action . We saw a marked increase in enquiries last month and that has continued into December. It's a mixture of remortgage clients who are moving away from their existing lenders as better rates present themselves, and in the first-time buyer market, lower mortgage rates at higher loan-to-values are bringing them back to the table as they begin the hunt for their new home. To kickstart 2024, we need mortgage rates to stay consistently below 5%. If the Bank of England cuts the base rate in the first half of next year, that will pour fuel onto the burning embers of the UK property market.
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Riz Malik
Independent Financial Adviser at R3 Wealth
If inflation continues to fall and there are no surprise upwards adjustments in the base rate as the year comes to a close, 2024 might start off well, perhaps revitalising the housing market by late January, especially with recent fixed rate reductions. Many people who gave up trying to sell their property in 2023 are planning to try again in the new year. However, the prediction for 2024 suggests that it will still be a buyers' market, particularly in the first half of the year.
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William Page
Head of Global Sales at IP Global
In recent months, we have seen a definitive shift in investor behaviour, with both UK-based and overseas property investors now acquiring more properties. The first three quarters of 2023 were defined by hesitation but that has now passed. Concerns about major price drops have eased as people realise that, due to structural undersupply, a significant decrease in house prices is unlikely. Now is a good window of opportunity to invest before competition increases for property purchases, potentially quite sharply in 2024.