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North East property market set to continue to buck national trend

The North East property market remains robust despite average UK house prices falling by -3.9% over the last year and early indications suggest that trend will continue as the Bank of England is set to cut the official interest rate.

There is speculation the Bank of England could reduce the current 5.25% rate twice this year with a first cut expected in March. The Bank of England will next vote on whether to cut rates on 1 February before a further meeting on 21 March, two weeks after the Spring Budget on 6 March, when the Government is expected to announce cuts to taxes.

Rising interest rates over the past two years have impacted the UK property market due to the increasing cost of mortgage borrowing which resulted in average UK house prices falling by -3.9% over the last year, according to new research released by Halifax. The lender looked at typical house prices in more than 300 Local Authority Areas across Britain in the three months up to September this year and compared them to the equivalent figures from 2022.

However, in the North East the Halifax research showed prices have fared better than the national average and only fell by -1.9%.

Guy Coggrave, managing director GSC Grays, expects the North East to continue to buck the national trend and said: “It has been a busy start to 2024 with a number of market appraisals (home valuations) already booked and new sales agreed.  The North East presents excellent value for money for prospective buyers, we are seeing families continue to relocate to the area not only because they can get more property for their money but for the lifestyle and opportunities the North East has to offer.”

The indications are encouraging for the property market in 2024 with reports buyers contacting estate agents about homes for sale nearly quadrupled from Christmas Day, and they were 17 per cent higher on Boxing Day than last year. January has also seen major lenders reducing rates, with HSBC offering five year mortgages below 4% with other lenders set to follow suit.

The Bank of England is set to act on interest rates as a result of December, data which showed inflation was falling faster than expected with swap rates, which determine the pricing of mortgages, falling and as a consequence brokers expect lenders to cut mortgage rates further in the coming weeks.

The Halifax report states: “The resilience seen in house prices during 2023 continues to be underpinned by a shortage of properties available, rather than any significant strengthening of buyer demand. That said, recent figures for mortgage approvals suggest a slight uptick in activity levels, which is likely as a result of an improving picture on affordability for homebuyers. With mortgage rates starting to ease slightly, this may be leading to increased buyer confidence, seeing people more inclined to push ahead with their home purchases.”

Article by

Nicolle Hamilton
Marketing & Communications Director

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