The UK property market is starting to thaw a little as speculation mounts that interest rates have peaked and may start to fall.
We suggest this is premature. House prices are still down by 1% for the year and the big squeeze will start to hit next year as many remortgage onto higher rates (despite the modest recent falls) with many forecasters suggesting a 5% fall in 2024.
We also suggest that it is extremely premature to think that the Bank of England will reduce interest rates which add another ‘turbo charge’ to property prices. Oil prices are rising, energy prices rise again in January and this may knock on to food prices that have fallen, but may tick up a little in 2024. We cannot see the Bank of England reducing interest rates until Autumn 2024 at the earliest (unless we dip into a deep recession) and many suggest it may be early 2025 when interest rates are cut.
The next Bank of England Monetary Policy Committee meeting is next week on 14th December and we do not expect any festive cheer.