Mortgage market activity presents mixed view of 2024

The number of mortgage searches recorded by broker platform Twenty7tec provides a mixed view of the property market as we head into 2024. 

Despite the usual December slow down, the number of searches recorded were slightly higher in December 2023 compared to previous years, and with high street lenders announcing mortgage rate cuts this week and a rise in the number of available mortgage products, there are hints of confidence returning to the market.

But purchase mortgage searches were down over a third December 2023 compared to November 2023, with remortgage searches (37%), buy-to-let (33%) and first time buyer (40%) searches down on November. The broker platform also reported a rise of 2% in total mortgage product availability. The total volume of Mortgage products is now at 94.32% of the highest-ever number of available products. Commenting on the figures Nathan Reilly, Director at Twenty7tec said:

“December is always a quieter month than November, but December 2023 was busier than prior year ends. January tends to be when we see a 70% rebound in the market compared to December. In fact, Januarys normally outperform the prior November too, so we are looking forward to a busy period in the run-up to the interest rate decision on 1 February 2024.

“In December 2023, remortgage searches outperformed purchase searches for the third consecutive month. In fact, we had the lowest proportion of purchase searches (as part of all mortgage searches) since October 2022. The figures in December were also impacted by the lowest proportion of First Time Buyers in the market (15.83%) since May 2020 when the pandemic prevented house viewings.”

High street lenders have responded to consecutive interest rate holds by the Bank of England by cutting mortgage rates this week. Halifax has reduced its two-year fixed rate for existing customers by 0.83% to 4.81%, while Leeds Building Society reduced rates on a variety of its products by up to 0.49%, with others expected to follow. Describing the move as a “belated Christmas present” Rightmove’s mortgage expert Matt Smith said

“After the reduction in swap rates we saw before the holidays, this is now starting to filter through to mortgage rates now that the festivities are over and the working year has begun. Unless things change, the signs are positive that lenders will reduce rates further over the coming weeks. Combined with the early-year bounce in home-mover activity we’re starting to see, lenders who price more competitively can expect growing interest from those looking to take out a mortgage soon.”

According to Rightmove the average 5-year fixed mortgage rate is now 5.02%, down from 5.23% a year ago, the average 2-year fixed mortgage rate is now 5.43%, down from 5.46% a year ago. Home buyers are also hopeful the Bank of England will reduce interest rates in 2024, with analysts predicting reductions over the next 12 months. Just under half (49.7%) of all fixed mortgage searches in December 2023 were for 2 years and under.

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