Why all major parties should prioritise further stimulation of the housing market - Matt Stamford

While there is no doubt the old message still applies, there may just be an argument that something more important now needs our consideration as we safely negotiate our way out of a tricky 2023.

One year ago, we were faced with one of the most volatile markets of recent times. Stirred up by the on-going fall-out from Covid and the misguided – albeit short-lived – policies of Liz Truss, both mortgage and interest rates were proving prohibitively high.

We fully expected 2023 to throw up its fair share of difficulties, even for a region like Harrogate.

Some might think we are unaffected here because we are regarded as an affluent town, but while we are certainly resilient, we are not immune to those issues which have impacted the housing market.

The steep rise in mortgage rates clearly damaged confidence within the market, and it has taken a slow and steady effort over the last 12 months to see that faith seeping back into the process.

Pricing is relatively consistent again, with a recent Rightmove report confirming that competitive valuations are leading to quicker sales, and there is also a level of stability to the once-fluctuating mortgage rates.

Sadly, we are unlikely to see a return of the 1 per cent mortgage - we were very lucky to get that - but we would expect rates to settle around the 4 per cent to 5 per cent mark, which would be good enough to get the market moving strongly in the new year.

Confidence is key when it comes to the process of buying and selling houses. One year on and I can safely say that we are in a much healthier position.

We have confidence that the mortgage rates will remain consistent, we have confidence that the house prices have stabilised, and we also have belief that the confidence level in the market itself is now stronger than at any point in the last 12 months. So, should ‘confidence, confidence, confidence’ be the new estate agent’s motto for 2024?

We are certainly optimistic that the improvements we have seen over the final few months of 2023, will filter through into the new year.

There has been a visible lift in the market, with the all-important return of said confidence not just evident in the steadier rates and prices, but also in the just-as-crucial increase of stock and demand.

Householders who had been put off from moving earlier in the year are now thinking the time is finally right to restart the process. And I fully expect that to continue into January. Of course, certain areas of the country may still find things a little tough, but Harrogate is showing its resilience, and there is no reason why others will not follow as we buy and sell across the same financial climate.

Christmas does usually provide us with something of a reset button. It gives everyone a breather to take stock…and then go again.

However, the four to six weeks running up to the festive season can also give us an indication of where we are going to be, come the new year. And we have certainly ended this year stronger than we predicted.

Even after the adverse reaction to the Truss policies in 2022, we saw the market steady itself in the following January, so there is evidence that with this new-found confidence we are witnessing, that 2024 could continue the upward trend.

Of course, much will also depend on affordability and how tough the lenders will make it for buyers to secure their mortgage products.

The cost-of-living crisis remains a factor as household disposable income continues to be eaten away by the increased prices of food, heating and petrol.

Help would certainly be welcomed here, and with an election due in 2024, it is hoped that the manifestos of all major parties will contain plans to prioritise further stimulation of the housing market.

The possibility of an early budget being called in February - to then facilitate a snap election in the spring - could then see the potential voter-seducing tax cuts which would alleviate the financial burdens of buyers and ease the mortgage-securing process.

It would certainly be short-sighted of any party not to add in some sort of provision for the housing market as they look to woo their voters in the race for No10.

There is a saying that an Englishman’s home is his castle, and while the electorate will forgive many things, they will not allow their homes to be put at risk.

Confidence, while fragile and easily broken, can also be nurtured to provide strength and stability. We remain quietly confident that 2024 will bring the latter.

Matt Stamford is a director at Verity Frearson in Harrogate.