UK House Prices Predicted to Increase in 2024
UK House Prices to Rise Amidst Mortgage Price War and Anticipated Interest Rate Cuts
Contrary to previous projections, UK house prices are set to rise by 3% in 2024, as per the revised forecast by global property consultancy, Knight Frank. This turnaround from an earlier forecast of a 4% decline is attributed to an ongoing mortgage pricing war and the prospect of interest rate cuts by the Bank of England, injecting new life into the property market after a year of falling prices in 2023.
Mortgage Pricing War and Interest Rate Cuts: The Catalysts
The Bank of England, after 15 consecutive base rate hikes and two holds, is expected to introduce its first cut within the next six months. Such a move is likely to result in a surge of new and more attractive mortgage deals. A price war among mortgage lenders has already led to repayment rates dipping below four percent. However, house price growth in London is anticipated to be slower than the rest of the UK due to high property values and rents.
The Wealth Gap: A Juxtaposing Scenario
While the property market experiences an upturn, a stark contrast is presented by a report from Oxfam. The world’s five richest men have more than doubled their fortunes to $869 billion since 2020, while nearly 5 billion people, representing the world’s poorest 60%, have suffered financial losses. The report gains significance as the wealthy gather in Davos, Switzerland, for the World Economic Forum.
Infrastructure Challenges and Investment Opportunities
Britain’s gas network faces challenges with its ageing infrastructure, which relies on old aircraft engines, including some from 1960s RAF Lightning fighter jets, to propel gas through the system. Jon Butterworth, CEO of National Gas, has highlighted the need for significant investment to replace these engines. In another development, the billionaire Tory donor Alan Howard and partners at Brevan Howard Asset Management enjoyed a substantial increase in payouts, amounting to £268 million in the previous year, largely due to successful interest rate bets.
Contributing to the wave of investments, Scottish Power has announced a record investment in updating old electricity transmission lines to facilitate the transport of more renewable energy from Scotland to England. This marks the start of significant spending by major power line operators to help the UK achieve its net-zero emissions target by 2050.