The UK’s rate of inflation has fallen to 3.4%,with the Bank of England expected to hold interest rates at 5.25% this week. But the fall, the lowest level since September 2021, has fuelled speculation the Bank of England could bring interest rates down in the Summer.
Commenting on the fall, which is still above the Government’s 2% target Matt Smith, Rightmove’s mortgage expert says
“Today’s news is positive, and every day is one step closer to when we might see the first Base Rate reduction, and mortgage rates are likely to reduce before this. I don’t think this will change the course of the Bank of England’s decision on the Base Rate tomorrow, but I expect both the Bank and home-movers will have some renewed optimism for the direction the economy and mortgage rates are heading in after today.”
Tim Bannister, Rightmove’s property expert adds:
“The general feeling is one of positivity at the moment after a good start to the year for the housing market, albeit with most of the year still to go and some twists and turns likely still ahead. We’re seeing many buyers and sellers get on with moves after some held back last year, and in the short term, given we don’t expect any dramatic changes in mortgage rates, it looks like the trend to ‘get on with moving’ will continue.”
Alongside the inflation figures, the average UK house price has decreased by 0.6% in the 12 months to January 2024, after a decrease of 2.2% in the 12 months to December 2023. With market sentiment broadly positive the latest figures represent a readjustment following the pandemic years, according to Iain McKenzie, CEO of The Guild of Property Professionals,
“Now that the dust has settled, we can see that last year was not as disastrous for the property market as analysts had feared. An annual fall of 0.6% is a modest readjustment in prices that was overdue after a period of significant growth during the pandemic years.
“This will come as welcome news to sellers that may have been cautious about putting their house up for sale. It is clear that while there has been some volatility in house prices over the past year, now is still a good time to buy.”
Ruth Beeton, co-founder of Home Sale Pack, adds:
“House prices have shown consistent signs of recovery in recent months, albeit this rate of growth has been somewhat measured. However, with the changing of the seasons all but here, we fully expect these green shoots to blossom over the coming months as market activity continues to build.
Many homebuyers were laying in wait to see how the Spring Budget played out and, while they were disappointed to see no homebuyer based initiatives announced, they now intend to push on with their plans to purchase regardless.”
Spring is traditionally a strong period for the property market, and with Propertymark’s own research showing a significant increase in new properties coming to market, the next few months could be buoyant according to CEO Nathan Emerson.
“Although we have seen a slight dip demonstrated within the latest ONS figures, we are now entering spring, which traditionally is one of the busiest times of the year for the housing market. This is an ideal time for buyers to start looking for homes that they can afford.”
“Propertymark’s own Housing Insight Report showed that there is an 80 per cent increase in the number of new properties coming to the market. With house prices continuing to normalise following the turbulence of the last three years, there should be no reason why people should hesitate to buy their ideal home.”
