The latest State of the Market update brings good news for small and medium sized Property Developers according to CrowdProperty

The key takeaways from the article are as follows:

  1. The housing market continues to improve, with UK house prices rising by 1.1% in December 2023. However, price increases have not been consistent across the UK, with the South East experiencing a sharp fall in prices.
  2. Mortgage rates have fallen, with more than 50 lenders cutting their rates. This has resulted in the best five-year fixed rate falling below 4%. SONIA swap rates have also eased, presenting new opportunities for the mortgage market.
  3. The outlook for inflation has improved, which is expected to lead to significant reductions in the Bank Rate this year. The EY ITEM Club is forecasting rate cuts of 100 to 125 basis points, starting in May.
  4. Construction activity has continued to decline, but at a slower pace. The main contributor to the decline is the slump in housebuilding, which has been attributed to high interest rates and subdued client confidence. However, anticipated interest rate cuts in 2024 have boosted sector-wide confidence.
  5. The government is considering plans to introduce a 99% mortgage scheme, allowing first-time buyers to purchase a property with a 1% deposit. This scheme has attracted divided opinions, with some mortgage brokers comparing it to existing 95% LTV mortgages, while others warn it could lead to negative equity and further increase house prices.

Overall, the housing market is showing signs of improvement, with rising house prices and falling mortgage rates. However, challenges such as declining construction activity and the potential risks of new mortgage schemes need to be taken into account.

Read the full update here –