Belfast-based mortgage advisory firm, The Mortgage Clinic, has provided new insights into the UK housing market, projecting a more favourable outlook for homebuyers in 2024. Founder Helmut Elstner discussed recent trends in mortgage rates and house prices during an exclusive interview, shedding light on what could be a pivotal year for the housing market.
One of the key developments highlighted in the interview is the recent cut in the Bank of England’s base rate, which now stands at 5%. This reduction signals a possible turning point for the mortgage market, with experts anticipating gradual improvements in mortgage rates over the coming months.
Elstner noted that, by the end of 2024, average five-year fixed mortgage rates are expected to decline to approximately 3.82%, compared to 4.86% at the close of 2023. “We’re seeing positive trends in mortgage rates as we move through 2024. This is welcome news for homebuyers and those looking to refinance,” he said.
Alongside falling mortgage rates, the UK housing market is projected to experience modest growth. House prices are forecast to rise by between 1.5% and 2% over the course of the year. While these increases are moderate, they represent stability after several years of more volatile movements in the housing market.
The potential impact of a Labour government on the housing sector was also a topic of discussion. Elstner believes that a new government is unlikely to cause significant disruption to the mortgage market, with any changes to demand growth expected to be relatively small. “We don’t anticipate major shocks to interest rates if Labour comes into power. The overall impact will likely be limited,” he commented.
In addition to projections for 2024, the interview addressed the ongoing debate between fixed-rate and tracker mortgages. According to Elstner, fixed-rate mortgages continue to offer security in a fluctuating market, but tracker mortgages might present more opportunities as rates fall. He urged potential borrowers to weigh the pros and cons of both options carefully and to stay informed about their choices.
“We always recommend that buyers and homeowners seek professional advice when considering their mortgage options,” Elstner said. “At The Mortgage Clinic, we’re committed to helping our clients make informed decisions about their financial future. In this dynamic environment, understanding market trends and having expert guidance can make all the difference in securing the best possible mortgage deal.”
Looking further ahead, the outlook for 2025 remains cautiously optimistic. While it is still early, Elstner hinted at a possible stabilisation in the market as mortgage rates gradually ease. However, with the ongoing economic challenges and shifts in government policy, he reiterated the importance of staying vigilant and making well-informed decisions.
For homebuyers and those seeking to refinance, the coming months could present key opportunities, but navigating the ever-changing landscape of mortgage rates requires careful planning.