NEWS: Research Reveals Insights into UK Mortgage and Property Market in 2024

28-December-2023
28-December-2023 16:03
in News
by Sam Hodgson
Research Reveals Insights into UK Mortgage and Property Market

Our recent survey results provide insight into public perceptions regarding interest rates, mortgage repayments, house prices, and the housing crisis debate in the UK in 2024. 

About Clifton Private Finance: Clifton Private Finance specialises in mortgage brokering and property finance, offering expert advice and solutions in the UK property finance market. 

Methodology: The research was conducted through over 250 form fills on the Clifton Private Finance website, which attracts thousands of monthly visitors seeking information on property and property finance. This method ensured a diverse and relevant audience for the study. 

Interest Rates

  • Just 15% of participants believe interest rates will rise over the next 12 months, while 85% expect either a decrease or for rates to stay the same. 

Mortgage Interest Rates Survey

This sheds some light on the fixed or tracker mortgage debate for first-time buyers and those remortgaging in the next coming months. 

Carly Cheeseman

Carly Cheeseman

Head of International CeMAP CeRER

Firstly, interest rates have already significantly improved over the last 8-12 weeks, which is good news for borrowers.

But I’d expect the base rate to stay the same until around springtime next year, at which point we may see a reduction.

Any sooner than that and there could be uproar from the public. Many people fixed their mortgages around the 6% mark for 5 years – so seeing the base rate go back down so quickly after so many consecutive hikes would be a hard pill to swallow.

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George Abouzolof

George Abouzolof

Senior Finance Broker CeMAP

The decision to keep the base rate at 5.25% doesn’t come as a surprise. Inflation is still in excess of 3% and swap rates have ticked upwards in recent weeks, although we are still expecting the base rate to fall towards the end of the year. Mortgage rates have also been squeezed upwards in light of the swap rates.

One factor that may have prevented inflation from dropping quickly is that the UK economy exited the recent recession and grew by 0.6% between January and March.

Mortgage Repayments

  • Concern about meeting mortgage repayments in the next year is notable, with 33% of people worried about keeping up:

Mortgage Repayments Survey

  • And this increases to 40% for those earning under £50,000 per year. 

Income under £50,000 per year: 

Mortgage Repayments Survey Low Income

Carly Cheeseman

Carly Cheeseman

Head of International CeMAP CeRER

Mortgage repayments are going to pretty much go up for everybody.

This year, lots of people came off 2-year fixes and saw an extreme spike in their repayments.

But over the next 2-3 years I think the spikes will be lower because the rates will settle a little bit - I think we’ve seen the peak.

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 George Abouzolof

George Abouzolof

Senior Finance Broker CeMAP

People are definitely worried – we see a clear concern about repayments among our clients every day.

As brokers, we look at every possible avenue to alleviate these struggles, whether it’s increasing the mortgage term, switching some or all of your mortgage to interest only, exploring offset mortgage options, and of course comparing lenders to get the most competitive deal.  

House Prices

  • It’s a pessimistic outlook for property prices in the UK, with 37% of participants predicting a decrease in house prices over the next 12 months, and only 26% thinking they’ll increase. 

House Prices Survey

Carly Cheeseman

Carly Cheeseman

Head of International CeMAP CeRER

I didn’t foresee a crash. Yes, in some areas the market has fallen slightly, and properties aren't going for above the asking price any more, but I don't think we'll see a significant drop in house prices over the next 12 months - perhaps just a small decrease next year.

In terms of the housing crisis debate – we’re certainly short of affordable properties in the UK. 

You can understand why people struggle to get on the property ladder - particularly those on a lower income - especially with affordability being squeezed recently due to the higher rates. 

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George Abouzolof

George Abouzolof

Senior Finance Broker CeMAP

I always suggest looking at Nationwide's quarterly house price index for housing market insights.

The rate at which prices are falling is potentially reducing - remember, as rates drop, demand increases. 

In terms of a housing crisis, there's an argument to be made that in a housing crisis, we should see house prices decreasing significantly - although we've seen drops recently, the rate of decrease is reducing, suggesting we're coming out of it.

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Housing Crisis: 

  • A significant 59% of participants believe the UK is currently facing a housing crisis. 

House Crisis Survey

  • This is more pronounced among those earning under £50k per year, with 69% affirming the crisis compared to just 46% of higher earners. It signifies a very divided outlook on housing options in the UK based on annual earnings. 

Income under £50,000 per year: 

House Crisis Survey Low Income

For more information, please contact: sam.hodgson@cliftonf.co.uk