Header Mortgages

Mortgages: improved outlook in 2024

Header Mortgages

By Mike Boles, Head of SPF Private Office

After what has been a tricky 12 months or so, there seems to be light at the end of the tunnel. The markets are pricing in quicker-than-expected rate reductions, and assuming inflation also continues to move towards its 2% target, we expect the base rate to be heading towards 4% by the end of 2024 - down from its current level of 5.25%. This would necessitate around three or four interest rate cuts this year.

The hold on rates at the last three meetings of the Monetary Policy Committee has drawn a line in the sand. This shift has resulted in an uplift in activity as borrowers are more confident about committing to a purchase: Rightmove reported that a record number of sellers came to the market on Boxing Day. And we now find ourselves in the midst of a mortgage price war with several high street lenders making significant rate reductions already. As well as reducing rates, many lenders have been improving criteria with more favourable loan-to-income ratios and better terms for self-employed applicants too. 2024 really could be a promising year for the housing market and it’ll come as a relief to borrowers who have struggled with affordability over the past few months.

Although those re-mortgaging this year will still see an increase in their payments – and understandable there will be a certain level of shock to this - the pain will not be as bad as it could have been thanks to recent shifts. As always, the important thing is to plan ahead; mortgages can be booked up to six months before you need them, so speak to a broker to find out what is available. If, by the time you come to take out your new mortgage, rates have come down further, you are not obliged to stick with the original deal and can choose a cheaper one.

For those planning a property purchase in 2024, it is more important than ever to seek advice from a whole-of-market broker such as SPF. The lending outlook is fast-moving and speaking to a broker means you’ll be able to review all the options – and potentially receive preferential rates -, ensuring you find the best solution for your particular circumstances.

Learn more about mortgage finance and SPF here. And read our expert insight into 2024’s housing market here.

This article is a guide and you should always seek professional advice for your own personal circumstances.


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