By the time you are reading this, the summer and the general election campaigns will be in full swing; two events that could have a significant impact on the housing market in H2. Traditionally in the summer, the market quietens and Lenders, advisers and clients alike take stock on H1, and get ready for the final push in H2. For advisers this may be in terms of getting applications to completion, and for the Lenders it might be building that all important pipeline for the following year. As for the general election, it doesn’t in the early weeks of campaigning appear to have had any material affect on the market as a whole, or on confidence, supply or pricing, but it is still early days. Research by Rightmove suggests this to be the case, interestingly when looking at the last two elections in 2015 and 2019 we can see that the market remained steady, both before and during the election period, but there was a bounce in activity after both elections. In 2015, demand from buyers was consistent leading up to the election, which was held in May. Demand then increased the following month, and was 18% higher than the year before. Similarly in 2019, demand remained stable in the months prior, and saw an annual increase of 13% in the December, when the election took place. This was followed by an annual increase in buyer demand of 14% in January 2020. It will be interesting to see if this is the case in 2024, although one thing I’m sure will happen and that is we will get a new housing minister regardless of the result! When I think of the election and the housing market I am reminded of the famous song "Flip, Flop and Fly" recorded by Big Joe Turner in 1955. The Flip stands for…they got in again, or, they didn’t get in again, and we have someone new in! The Flop stands for… no one got in with a majority so that’s what will happen with the market! And Fly… regardless of who gets in, the market is going to “Fly” which is what we all want! But given we are about to enter the second half of the year, how would we mark the first 6 months of 2024 in terms of the housing market? I think it’s fair to say the housing market has experienced mixed performance with some notable trends and regional variations. House prices have seen modest growth overall. Between March 2023 and March 2024, the UK House Price Index reported an increase of 1.8%, although there have been significant regional variations for example Scotland and Yorkshire and the Humber have seen good growth, whilst prices fell in London and the South East according to Savills. In terms of mortgage rates and approvals, January and February saw falling mortgage rates which certainly got the market off to a flyer and raised expectations that the good old days were back! Market activity picked up early in the year, perhaps because of the pricing initiated by the Lenders, but started to stabilise by the end of the first quarter. The number of completed transactions rose but remained below pre-pandemic levels which is perhaps no surprise. Richard Howes Director of Mortgages Paradigm Mortgage Market Update 04 SUMMER MORTGAGE NEWSLETTER
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