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Lower Mortgage Rates and Inflation in 2024?

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As first seen in our January 2nd 2024 market update newsletter.

For homeowners, 2023 will be remembered as the year that the “golden period” of low mortgage rates came to its end. The average increase in payments for our clients whose remortgages became due was £300-400pm and this has been quite the adjustment.

The good news though is that inflation has really started to come back under control now and recently we have seen it drop to 3.7%, down from its 11.1% peak. The rises in mortgage rates have been very painful and whilst I have criticised the Bank of England before that they were too slow off the mark with the rises, we can now say the plan has finally worked.

There are still inflationary pressures out there (world events mainly) and that’s why we won’t see any immediate cuts to the base rate, but we are hopeful it could happen at some point next year to stimulate some much-needed economic growth.

2024 will bring us a General Election and a probable change of Government looking at the polls. We will hear much from Labour about building the homes that our country desperately needs.

Housing has been a dismal failure of this Government, we have had 15 Housing Ministers since they took office in 2010 and I think that probably speaks volumes. You’ve got more chance of a long-service medal as manager of Chelsea FC than seeing through a reasonable period in that job!

We are now seeing fixed rate mortgages of between 4 and 5% which is much more like it and in many instances again now it’s cheaper to buy than rent. There is certain to be lots of pent-up buyer demand out there too.

We have spoken with countless people who have put their plans on hold due to the cost of living crisis and mortgage rates so I’m fully expecting to see many more properties come onto the market in 2024. With a new year approaching, comes a time of reflection and many people conclude their homes are no longer suitable for their needs.

To summarise, we have lower inflation, affordable mortgage rates and stable property prices – so I’d say the outlook is currently pretty good for the market as things stand!

On behalf of us all at UK Moneyman, thank you for your support in 2023, we hope you’ve all had a great Christmas and wish you the very best for 2024!

A Message from Our Head of Later Life Lending

The alleged Chinese curse ‘may you live in interesting times’ could apply very well to a turbulent 2023 which has seen many people struggling with the cost of living and impacted by global events.

Thankfully we seem to be set for a more stable period with inflation falling and lenders showing confidence with rates under 6% available for both equity release and retirement interest-only mortgages and their variants.

There have been some good product innovations recently with more expected in the first half of 2024. With older clients being viewed more as mainstream borrowers I think we have an exciting year ahead.


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About the Author

Malcolm Davidson

Managing Director of UK Moneyman LTD

Malcolm is one of the UK’s most well-known and respected Mortgage Advisors. He is passionate about providing a 5* customer experience and he has also trained and mentored dozens of fellow Advisors in a career that is now in its third decade.

In addition to his day to day duties as Managing Director, Malcolm still gives out mortgage advice and feels lucky that his job is also very much his hobby.

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