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Nationwide December 23 House Price Index

ended 28. December 2023

Tomorrow morning at 07:00, the Nationwide is publishing its December House Price Index, which will be picked up widely by the local, national and trade media (all the more so as it's a quiet news period). A selection of Qs ahead of this -

  • Average house prices rose in both October and November according to the Nationwide. The lack of supply was a key contributor but, in your experience, did demand pick up in December as inflation and mortgage rates fell and the base rate was held? 
  • In terms of purchase activity, 2023 has been quiet transactionally as confidence has been weak throughout the year. Are you expecting a lot of pent-up demand to be unleashed onto the market in Q1 2024? If so, will this further drive up prices?
  • A base rate cut is expected in H1 next year, perhaps as early as Q1, to stave off (or limit the duration of) recession. What impact could this have on the property market?
  • Could the circa 1.4m people coming off ultra-low fixed rate mortgages in 2024 see more properties come onto the market (on a reactive or pre-emptive basis)? How could this impact prices?
  • The UK economy contracted very slightly in Q3 and is at risk of being in a technical recession. How could this impact sentiment and the property market?
  • What other factors could impact the property market in 2024, e.g. General Election?

Any other thoughts or insights, fire away.

9 responses from the Newspage community

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Mike Staton
Director at Staton Mortgages
The first three weeks of December were the busiest run-up to Christmas we have had on record. A combination of a mortgage price rate war and a general acceptance that the era of ultra-low rates is unlikely to ever come back is bringing buyers out of their shells. With this acceptance becoming more widespread, I can see an increased demand for purchases in 2024. I also expect to see a lot of people who fixed their mortgage in a mad panic rush at rates in excess of 6% biting the bullet and paying off the excessive early redemption charges to return to a much lower rate. 2024 is going to be a fruitful year for the banks. You would almost think this was planned out by them.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
December is usually quiet but the first three weeks of this month were anything but, with buyers emerging left, right and centre. Demand was much higher than usual and did not drop off as early for the festivities as in previous years. As ever, there are far to few properties available for the swell of interested buyers to purchase. After poor GDP figures and positive inflation results recently, the market is expecting base rate reductions before the summer, despite what the Bank of England is sign-posting, which could help rejuvenate the housing market in early 2024 as lenders should be confident to reduce their fixed rates in a January sale.
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Ken James
Director at Contractor Mortgage Services
Strong winds are pushing us closer to 2024 and the start of next could be a very positive one as the momentum we saw at the tail end of 2023 grows. Buyers who were previously sat on the fence have seen mortgage rates falling, encouraging them to make the decision to buy. The demand for mortgages rose materially in December and even now, in-between Christmas and the New Year, we are getting enquiries, which is a great litmus test of the confidence emerging. Rates, however, need to continue to improve and if the Bank of England does make a rate cut earlier than expected this should fuel lower swap rates and inject real life into the mortgage market.
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Rohit Kohli
Director at The Mortgage Stop
Many of the prophets of doom predicting a collapse in house prices have disappeared or are now reworking their numbers. The property market has an in-built resilience due to the lack of housing stock and in December that was boosted by demand right up until the day before Christmas. The lack of supply will further support prices in 2024, although high-end properties are still seeing a reduction in their asking price and are still proving harder to sell. With a potential recession on the cards, it’s likely we’ll see some form of action taken by the Bank of England to try to stimulate growth in the first half of 2024, which will likely bolster prices further.
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Justin Moy
Managing Director at EHF Mortgages
The technical recession the UK is very possibly now in, on top of much higher mortgage rates, are certainly contributing to the price challenges within the property market. However, lenders are working overtime to improve rates and affordability models to try and see out this current trough of property prices. With over 1.4m borrowers coming off ultra-low rates in 2024, we will see more financial issues before the upturn kicks in but sentiment is definitely improving and we all need to see out that storm before improvements with prices and rates truly make a difference.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
This has been no ordinary December, with demand remaining high right until the last few days before Christmas. For now, buyers are still holding the cards but this may change in the months ahead if mortgage rates continue to tumble. If the Bank of England cuts rates then all bets are off. If the Government intervenes with support for first-time buyers, then we will see purchase activity increase potentially significantly next year, especially if the Bank of England cuts rates. After a subdued 2023, 2024 is shaping up to be a much more dynamic year for the property market.
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Elliott Culley
Director at Switch Mortgage Finance
The positive trend in mortgage rates over the past two months has led to an increase in first-time buyer enquiries and we had a very busy December. There is still a lack of affordable housing so it's likely we will see an increase in house prices over the next month or two whilst rates continue to bottom out. Any base rate reductions will add further fuel to the fire and the property market will start to recover as a result. 2024 is looking promising for the property market.
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Graham Cox
Director at Bridging Hub
I still believe house prices will fall at least 5% in 2024 due to a looming recession caused by the Bank of England. As a knee-jerk response to being asleep at the wheel when inflation first reared its ugly head, they've tightened monetary policy far too aggressively. To prevent a severe recession, the Bank should reverse course with an early interest rate cut. If they wait until the summer, the damage will be done and jobs and businesses will be lost unnecessarily.
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Gary Bush
Financial Adviser at MortgageShop.com
Unbelievably, the bidding wars are already back on some properties. Though undesirable properties are still taking a hit, sought-after properties that came to market in late November and December are now having very good early viewings and people bidding against each other to secure purchases. December was busier than expected and January will see property viewings increase further. The market now needs more sellers of good quality premises bringing their homes to market. Having heard the Chancellor's budget plans, our prediction of a drop in the Bank of England base rate by at least March 2024 is now looking even more likely, leading up to the general election. With fixed mortgage rates now coming available with a three in front of them, 2024 looks likely to be a good year for the UK property market.