Another tiny rise in UK house prices has sparked debate over whether the embattled market may finally be turning the corner.
But is it too early for investors and homeowners to be breathing collective sighs of relief?
UK house prices rose 0.2 per cent on a monthly basis in November, the third successive monthly increase and the best performance since February this year, the Nationwide Building Society said on Friday.
The market "remains weak" however, with prices 2 per cent lower in November compared with the same month last year. But this is an improvement on the October figure, which was 3.3 per cent lower, the Nationwide said.
“There has been a significant change in market expectations for the future path of bank rate in recent months which, if sustained, could provide much needed support for housing market activity," said Robert Gardner, chief economist at Nationwide.
In August, market watchers had expected the Bank of England to push interest rates as high as 6 per cent by the end of the year and for the central bank to drop rates only in small increments to about4 per cent over the following five years.
But that mood has now changed after inflation fell from 6.7 per cent in September to 4.6 per cent in October. Most analysts now think the Bank of England will hold interest rates at their current 5.25 per cent until the end of 2024, before lowering them to 3.5 per cent in the years ahead.
Buyers market?
With the average price of a house in Britain now at £258,557 ($326,870), and research from the property website Zoopla showing recently that buyers were able to negotiate asking prices lower by an average of £18,000 in November, many market watchers say buyers are in a better position now than they have been for some time.
"Negotiating hard on price will become key for those hoping to nab a bargain, with homebuyers knocking off £18,000 on average from asking prices in November to land a deal – the highest average discount in five years indicating that buyers have the upper hand despite the long-term shortage of homes," said Alice Haine, personal finance analyst at Bestinvest.
This week, numbers from the Bank of England showed that net mortgage approvals for house purchases jumped to 47,400 in October, up from 43,700 in September, a rise of 8 per cent.
At the same time, the growing competition on the mortgage market continued at pace, with Barclays joining the fray by offering a five-year fixed mortgage at 4.39 per cent, with certain conditions.
Mortgage deals for fixed five-year terms charging rates below 5 per cent are becoming commonplace in the UK.
Meanwhile, the average two-year fixed residential mortgage stood at 6.05 per cent on Thursday, according to data from Moneyfacts.
"The rate war that is raging between lenders is now really starting to ignite demand for property," Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management, told Newspage.
"People who were simply browsing on Rightmove are now turning into buyers. With 90 per cent loan-to-value mortgages going sub-5 per cent this week, and more rate cuts likely as swap rates edge down, first-time buyers are finally being given that all-important leg-up on to the ladder. 2023 has been a year of turbulence but as we enter 2024 things are looking a lot less bumpy."
Light at the end of the tunnel?
But with the cost-of-living crisis still very much weighing on household budgets and interest rates expected to stay higher for longer, is the UK housing market really turning the corner?
As the Bank of England continues to stamp on demand, some analysts feel there may be glimmers of hope for first-time buyers in the new year, as more buy-to-let landlords quit the market because of falling yields.
"From the start of 2024, we’re expecting a further softening in demand from amateur buy-to-let landlords and with it an injection of high quality, smaller homes which will offer new opportunities for buyers," said Alan Davison, director of customer sales at Together.
"With the succession of tax and regulatory changes, as well as the continued pressure on costs versus potential yields, this is already unfolding, which will see activity steadily tick over."
Nonetheless, overall mortgage lending remains subdued and UK house prices continue to struggle despite managing to eke out weak rises in the past three months.
Gabriella Dickens, a senior economist at Pantheon Macroeconomics, said those rises could well be reversed in the near term and that "a material recovery in house prices still looks a few months away yet".
"The outlook for next year, however, is brighter," she added.
While transaction volumes are still low, the price indices collated by the likes of Nationwide, Halifax and others "are potentially more volatile", said Tom Bill, head of UK residential research at estate agency Knight Frank.
"But sentiment has improved in recent weeks as the worst of the economic data moves behind us."
"If we are not at the bottom of the current slowdown in the UK housing market, we must be close."
Even if the UK housing market is close to bottom, a rapid rebound "still appears unlikely", according to Mr Gardner at Nationwide.
Which makes it more likely that home buyers will lean more towards staying where they are for the time being, not least because the Bank of England is likely to keep interest rates at 5.25 per cent for much of next year.
Ms Haine said that means those looking to sell in 2024 face a "tricky decision".
"Pause moving plans to see if the market improves further or push ahead and hope to achieve the price they want?
"The solution may be guided by whether a move is necessary, because of death, divorce, an expanding family or financial difficulties, or whether it can wait for better market conditions."
UAE currency: the story behind the money in your pockets
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Louis Armstrong: his legacy is undeniable. He is considered as one of the most revolutionary and influential musicians.
Terence Blanchard: very political - a lot of jazz musicians are making protest music right now.
The five pillars of Islam
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Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
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Killing of Qassem Suleimani
UAE currency: the story behind the money in your pockets
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
Race%20card
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Know before you go
- Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
- If you’re driving, make sure your insurance covers Oman.
- By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
- Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
- Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.
CONFIRMED%20LINE-UP
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Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
SPECS
Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Profile box
Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
Investors: Class 5 Global, FJ Labs, IMO Ventures, The Community Fund, VentureSouq, Fox Ventures, Dr Abdulla Elyas (private investment)
Zayed Sustainability Prize
COMPANY%20PROFILE
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UAE currency: the story behind the money in your pockets
