A year ago, no one would have predicted the end of 2024 would end with house prices reaching a record high.
“The mood of the housing market has shifted from trepidation to cautious optimism,” says Aneisha Beveridge, research director at Hamptons estate agency who is predicting average increases of 3 per cent next year. “In contrast, first-time buyers have made fewer compromises on the price of property they are seeking to buy while taking slightly larger loans,” says Zoopla’s Donnell.– but not as much as they were, offering small consolation to tenants. The average rent is likely to rise by 4.5 per cent this year, against 10.2 per cent last year, according to Hamptons data.
At the moment lenders are often stress testing at rates close to 8 per cent, which has been a major affordability hurdle. But lenders are expected to stress test at lower rates for people taking fixed-rate mortgages of five years or more, which will give some wiggle room for those able to sign up for the longer term.Another key factor influencing the outlook for the sales market is whether people think they can get a bargain or not. The cheaper prices appear, the more likely they are to rise.