Rolling coverage of the latest economic and financial news, as house prices defy fears of a crash, on the final trading day of 2023
Matt Thompson, head of sales at Chestertons, says December has been a busier month than normal, as buyers search for homes:
Pent-up demand caused by this year’s economic uncertainty is a key reason for this delay in buyer activity and indicates that 2024 will start off with a rather active property market.”
Chestertons forecasts that UK house prices will experience a slight decline of -0.3% over 2024, while London prices will show growth of 1.8% due to the higher number of cash buyers that are less affected by the higher interest rates.
The prospect of a slightly stronger economic outlook from 2025 feeds through to a more meaningful uplift in house prices. The agency forecasts that this will result in growth of between 3.5% and 4.5% across London and the UK. However, any house price growth is more likely to be slow and steady rather than spectacular.
A borrower earning the average UK income and buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 38% of take-home pay – well above the long run average of 30%.
“At the same time, deposit requirements remain prohibitively high for many of those wanting to buy – a 20% deposit on a typical first-time buyer home equates to c105% of average annual gross income – down from the all-time high of 116% recorded in 2022, but still close to the pre-financial crisis level of 108%.
Continue reading…Rolling coverage of the latest economic and financial news, as house prices defy fears of a crash, on the final trading day of 2023Matt Thompson, head of sales at Chestertons, says December has been a busier month than normal, as buyers search for homes:Pent-up demand caused by this year’s economic uncertainty is a key reason for this delay in buyer activity and indicates that 2024 will start off with a rather active property market.”Chestertons forecasts that UK house prices will experience a slight decline of -0.3% over 2024, while London prices will show growth of 1.8% due to the higher number of cash buyers that are less affected by the higher interest rates.The prospect of a slightly stronger economic outlook from 2025 feeds through to a more meaningful uplift in house prices. The agency forecasts that this will result in growth of between 3.5% and 4.5% across London and the UK. However, any house price growth is more likely to be slow and steady rather than spectacular.A borrower earning the average UK income and buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 38% of take-home pay – well above the long run average of 30%.“At the same time, deposit requirements remain prohibitively high for many of those wanting to buy – a 20% deposit on a typical first-time buyer home equates to c105% of average annual gross income – down from the all-time high of 116% recorded in 2022, but still close to the pre-financial crisis level of 108%. Continue reading…