Summer Property portfolio 2024 - Flipbook - Page 8
MORTGAGE MARKET ANALYSIS
BY PRIVATE FINANCE
Sir Keir Starmer's landslide victory in the general election, securing 411 seats in
parliament, has introduced a potential new era of stability and confidence in the
market. This majority allows Labour to efficiently implement policies in parliament,
providing reassurance to markets. UK businesses, in particular, will welcome a
business tax roadmap that clearly outlines the future tax system in the medium term,
especially when investing in large financial projects.
HOUSE PRICES & MORTGAGE RATES
The hope now is that this renewed sense of
confidence will reinforce steady growth in
house prices and anticipations of rate cuts
into 2025. According to Halifax, current
annual house price growth is at 1.6% with
modest increases expected through the rest
of the year and into 2025. Major lenders
announced mortgage rates reductions leading
up to and following the election.
SONIA (Sterling Overnight Index Average) swap
rates, particularly 5-year swaps, have fallen again
following the election4 a positive move for fixedrate mortgages. The market had likely priced in a
Labour victory, and the announcement confirmed
these expectations. Now, the next major economic
expectation is the anticipated first base rate cut
this year, which would likely signal a major market
shift and a departure from the highest mortgage
rates for now.
ADDRESSING THE HOUSING CRISIS
Labour's house building targets include constructing one and a half million new
homes within the next five years, aiming to boost affordable housing and provide
support for first-time buyers. New housing policies should focus on serving the
market in the longer term, providing affordable, good-quality housing and market
stability. The ongoing housing supply shortage highlights the need for significant
reform, particularly to support first-time buyers.
One key area Labour will need to address is stamp duty changes, particularly for
those looking to downsize and free up much-needed good-sized family homes back
into the housing market.
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