Amanda Bryden, Head of Mortgages at Halifax, commented, "The reality is that average house prices have largely plateaued in the early part of 2024. This reflects a housing market finding its feet in an era of higher interest rates. While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability."
She noted that homebuyers were recalibrating their expectations, with a particular emphasis among first-time buyers on pursuing smaller properties to mitigate the impact of heightened borrowing expenses. This trend has been evident in the property market dynamics during the initial months of this year, where the value of apartments experienced the most pronounced ascent, narrowing the longstanding "growth gap" between smaller and larger properties that has persisted over the past four years.
Bryden highlighted an upswing in both activity and demand, with mortgage approvals hitting their highest level in 18 months. Nonetheless, affordability continues to pose a challenge for first-time buyers and those transitioning from fixed-term mortgage agreements.
Bryden said: "If, as is still expected, downward moves in Bank rate come into play later this year, fixed mortgage rates should fall. Combined with the resilience displayed by the housing market over recent months, we now expect property prices to rise modestly over the course of 2024."
Savills, a prominent real estate firm, has altered its previous forecast made in November regarding a potential decline in UK house prices for the current year. Instead, it now anticipates an average price increase of 2.5% throughout 2024.
Jeremy Leaf, an estate agent based in North London, commented: "We are not surprised to see house prices up a bit, then down a bit – a pattern which we are finding is repeated on the ground, reflecting that some sellers are more realistic than others.
"The market has lost a little momentum in the last month or so, which has chimed with recent modest increases in mortgage rates as well as listings. However, underlying confidence remains fairly strong for now at least, allowing purchasers the opportunity to perhaps negotiate a little harder where possible."
