Following the recent Bank of England’s second base rate freeze and this week’s fall in inflation rates for both the UK (4.6% from 6.7%) and the US (3.2% from 3.7%), the Autumn Statement will provide further clues on whether we can expect the new year to bring with it green shoots in the housing market.

This economic news has seen swap rates, which are used to price mortgages, drop by more than 1% from a peak of 5.4% to the current level of around 4.2%

Recent reported property prices have been mixed but appear to show that price falls are beginning to moderate following several months of downward correction.

Last week, Gleeson, the northern focussed builder of starter homes, announced a small recovery in reservation rates over the last nine weeks, reporting “Net reservation rates for the 9 weeks to 3 November 2023 increased to 0.47 per site per week (0.46 excluding bulk reservations), from 0.43 per site per week during the previous 9 weeks to 1 September 2023.”

iHowz are hoping that the Chancellor will choose to help address shrinking rental supply for those on benefits by providing an increase in LHA rates. It is likely that with an election in the next 12 months, we will see further incentives for home buyers, despite the recent temporary Stamp Duty threshold rate change announced in the mini-budget remaining in place until March 2025. The Help to Buy scheme ended on 31 March 2023, so the government may choose to launch something similar to help boost the construction industry, as well homeownership.

With rents at record levels, falling mortgage rates and property prices having dropped to near what may be their lowest levels in the current cycle, some landlords will be thinking that they should expand their portfolio and now is the time to get ready to buy more properties.

If you are in this position, or simply need to refinance existing lending, you will no doubt be starting to have conversations with our mortgage broker provider, Mortgages for Business