What’s next for mortgages and house prices in 2024?

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Mortgage rates have been falling in recent weeks, a glimpse of light at the end of the tunnel for the property market. But just how long will it take to get out into the sunshine?

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Published on 10 January 2024

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

We’ve seen big cuts in mortgage rates over the past few months.

At the end of July, average two-year fixed rates peaked at 6.86%, then fell to around 5.8% in early January. The new year has seen some chunky cuts from around half of lenders and they’re likely to keep going.

The market’s stopped pricing in rate rises and instead started pricing in cuts.

After the surprise fall in inflation, markets were pricing in rate cuts as early as May, and even more through the rest of 2024. But, take this with a pinch of salt as everything the Bank of England has said so far has been about preparing to keep interest rates higher to bring inflation down to target.

There are some signs that this has already brought a little more life into the market. Mortgage approvals were up slightly in