Spring is one of the most popular seasons to buy and sell homes and we typically see the housing market start to defrost in March, with more properties coming to the market. While we’ve seen this in the latest Rightmove figures below, it’s still not a ‘normal’ March by historical standards. Many homeowners and buyers are still finding their affordability limited by relatively high mortgage rates. That said, it’s been great to see market activity continuing to pick up this month – here’s our usual breakdown.

 

Base rate held at 5.25% again, but the tide is turning

Inflation fell from 4% to 3.4% in March, its lowest level since 2021 and inching closer to the government’s 2% target.¹ However, the Bank of England have signalled they won’t be cutting interest rates until they have seen a continued drop in inflation. At their March meeting, 8 members of the Bank’s Monetary Policy Committee voted to keep the base rate at 5.25%, with only 1 member voting in favour of reducing the base rate to 5%. Markets are now predicting a greater chance of the first interest rate cut landing in June.

These decisions affect millions of future and current homeowners, especially anyone on a tracker mortgage linked to the base rate. If this sounds like you and you’ve been dealing with higher mortgage repayments for some time, it could be time to remortgage to a new deal, as you could save money. Our free mortgage advice service – Moneybox Mortgages – is here to help you. We can compare mortgages from over 90 lenders, giving you thousands of mortgage deals to choose from. Head in-app to Accounts > Mortgages to start a conversation with expert brokers at Moneybox Mortgages.

Your home may be repossessed if you do not keep up repayments on your mortgage.
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Mortgage approvals jump significantly

Figures released this month show that UK mortgage approvals climbed to 60,400 in February, up from 56,100 in January. Not only is this the fifth consecutive monthly rise, it’s also the highest number of approvals seen since September 2022. Approvals for remortgaging also increased significantly in February, from 30,900 to 37,700.² 

This acceleration is a positive sign that the mortgage market is continuing to bounce back, with the prospect of interest rate cuts on the horizon boosting confidence among buyers and remortgagers alike. We’re hopeful that this trend will continue and accelerate even faster if rate cuts materialise in the summer months and affordability improves across the market. 

 

Housing market continues cautious recovery

January’s UK House Price Index showed that average house prices in the UK increased by 0.5% compared to December. But, average prices are still down 0.6% compared to last year, and there’s likely to be some way to go before we see big monthly house price growth again.³

Even so, sellers are feeling confident as the spring selling season gets underway and current asking prices reflect the optimistic mood. Rightmove reported that the average price of newly-marketed properties on their portal increased by 1.5% in March, which is the largest monthly increase in the last 10 months.⁴ Lender house price indices report a different story and, as usual, these are the stories hitting the headlines. For example, Nationwide reported a ‘surprise 0.2% fall’ in house prices in March compared to February.⁵

It’s important to take these indices with a pinch of salt and remember that they don’t always tell the full story, as they only include mortgage data specific to that lender. For a full picture of what’s happening with all house price transactions, you’re always better off looking at the UK House Price Index. As we always say, trying to time the market when you’re buying a home is near impossible and the ‘right’ time to buy is when you’re ready.

 

¹ Source: Office of National Statistics (ONS) CPI Annual Rate of Inflation

² Source: Trading Economics, UK Mortgage Approvals for February 2024

³ Source: GOV.UK Land Registry (UK House Price Index for January 2024)

Source: Rightmove House Price Index, March 2024

Source: Nationwide House Price Index, March 2024