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3 important factors to consider if you’re buying a house in 2024

Category: News

UK house prices fell by 1.8% during 2023. The Guardian reported in December that higher mortgage rates were partially to blame for a property market it summarised as “weak throughout the year”.

While rates have started to ease, they finished the year three times higher than in 2021. But what is 2024 likely to bring and what steps should you take now if you’re looking to buy in 2024?

Keep reading to find out.

2024 could see a continued fall in house prices while the base rate remains high

While inflation has been falling since its 41-year high of 11.1% in October 2022, its effects are still keenly felt.

The latest inflation figures from the Office for National Statistics (ONS) confirm that the Consumer Prices Index (CPI) stood at 4% for the 12 months to December 2023. While this marked a 0.1 percentage point rise from the previous month, this was the first time the rate had increased since February 2023.

The Bank of England (BoE) expects inflation to fall back to its own 2% target by the end of 2025.

To tame inflation, the BoE’s Monetary Policy Committee (MPC) has increased the UK base rate over the last two years, from 0.1% in November 2021 to its current 5.25%. It is expected to stay at this new high until at least Q4 2024.

This signals continued worries for mortgage holders and first-time buyers but does mean that house prices could continue to fall.

The latest figures from Halifax suggest that house prices could fall by between 2% and 4% in 2024, though a faster-than-expected easing of interest rates could see the market partially recover before the end of the year.

3 factors to consider if you’re looking to buy in 2024

1. Be prepared to shop around (or speak to a mortgage broker)

The mortgage market has been struggling since the mini-Budget of 23 September 2022, which crashed the pound and severely damaged investor confidence. Mortgage rates shot up overnight.

This has led to a quick turnaround for deals, with new ones appearing and then being pulled from the market almost daily. Indeed, Moneyfacts recently confirmed the average mortgage deal had a shelf-life of just 17 days during December.

You’ll need to be prepared to shop around for the right deal in 2024. This will be important due to the sheer number of deals on the market, but also because your preferred deal might not be available for long.

Working with Fingerprint Financial Planning’s team of expert mortgage brokers could be invaluable here so get in touch if you’re thinking of taking out a deal.

2. Preparation will be key for first-time buyers

2024 could be another tough year for first-time buyers, as a result of higher-for-longer interest rates and inflation above 2%.

But there are steps you can take to improve your chances of getting the mortgage you need, starting with your credit rating.

To start with, make sure you’re on the electoral register to make verifying your identity easier for prospective lenders.

Check your credit history, and if you don’t have one, take out a credit card and make the necessary repayments on it. This might seem counterintuitive but having no credit rating means a lender has no evidence to back up a lending decision. This makes it almost as big a hurdle as having a poor credit rating.

If you have a credit score, check it for mistakes and get these rectified before you approach lenders.

Also, be sure to speak to us before you apply. We can help find the right lender for you and ensure you only apply with a high chance of success. This is crucial because rejections are likely to remain on your credit file, which could adversely affect future applications.

3. Beware of the Renters Reform Bill as a buy-to-let landlord

As a buy-to-let landlord, you’ll already have felt the effects of the BoE’s interest rate hikes.

You’ll also be aware of potential upcoming changes under the Renters Reform Bill. The abolition of section 21 relating to “no-fault evictions” could have huge implications.

It’s one of the reasons why, according to IFA Magazine, 1 in 4 landlords plan to reduce their buy-to-let portfolio in 2024.

Again, our team of property market experts can help you decide on the right financial decision for you so be sure to get in touch.

Get in touch

If you would like with any aspect of your property journey during 2024, speak to us now. Get in touch by emailing or calling 03452 100 100 and see how our mortgage team could help you.

Please note

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it. The Financial Conduct Authority does not regulate buy-to-let (pure) and commercial mortgages.

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