Are calmer waters forecast for the mortgage market in 2024?

CEO of SEICO Mortgages, Rob Starr shares his outlook on the mortgage market for the coming year.

Is 2024 going to offer any more stability in the mortgage market than 2023? Well, we certainly hope it will. For the mortgage and property market 2023 was like continuous wild days at sea – bumpy, unpredictable, and perhaps not for the faint hearted. Mortgage rates never seemed to settle and property sales were almost non-existent. So will that continue in 2024?

Well, I, for one, do not think so. Since the last quarter of last year we have seen the Bank of England hold the base rate multiple times and we have seen Lenders across the board offering fixed rates around the 4% mark.

Sure, this is still way more than the 1.5%-2% deals we used to see, but it is way better than the 6%s that appeared from nowhere. The reality is that the good old 1% days are well and truly over and the new normal looks like it is going to be between 3.5%-4.5%. But the important thing, the indicator that the property market will start to recover, is not the rate of interest per say, but the stability of the deals on offer.

Once we see rates settled, which we are not far off seeing, then confidence will return and property will start to move again. The hard truth is that Property remains the Country’s biggest business and as such both the Government and the Lenders must see the property market grow again. We believe that by the middle of the year interest rates will be settled around the 4% mark and that 2 and 5 Year Fixed Rates will be available under and around the 4% level.

For people wanting to move home it will mean that, whilst prices may start to rise again, they should not go to the silly numbers we saw a few years back and this will make property purchasing once again a safe and desirable thing to do, both for buying your own home or for future growth potential.

For someone with an existing mortgage that is about to expire it is perhaps time to start looking at securing a new deal as rates start to settle. The best time to do this is around 6 months before your current rate ends. You will be able to get a new deal right away and hold it in place ready for your existing deal to end. If, however, the rates come down again in that time you can then swap out that saved deal for the newer lower one. By doing this now, you can start to budget and understand the increases that are inevitable, but also you can still benefit from any further decreases that might come along in the interim. One way of doing this is to join up to a mortgage monitoring system. This is a Free way of staying in touch with all the hundreds of deals on the market and making sure you do not miss out.

Whatever 2024 brings us all, it does feel like the mortgage storm is clearing and calmer waters are on the way

Get in touch for a chat with one of our brokers: 01273 778888