UK Finance predicts a decline in mortgage lending for 2024, coupled with an increase in repossessions and households in arrears.
Affordability constraints persist, driven by the recent conclusion of the Bank of England’s interest rate hikes. Despite these challenges, the report suggests a potential rebound in demand as household finances strengthen.
The analysis points to various factors influencing the mortgage landscape, including the broader cost of living crisis and sustained high mortgage rates.
While the average fixed-rate mortgage has seen a slight decline, the overall outlook remains cautious due to the absence of anticipated interest rate cuts by the Bank of England.
The report anticipates a rise in mortgage arrears and repossessions but emphasises that the majority of customers are expected to recover, with only a minimal impact on possession rates.
1. Mortgage lending in the UK is projected to decrease in 2024, according to a forecast by UK Finance.
2. Affordability challenges are highlighted, stemming from the recent conclusion of the Bank of England’s interest rate hike cycle.
3. The report suggests that demand for mortgages may rebound as household finances gradually stabilise.
4. Ongoing pressures from the cost of living crisis and comparatively high mortgage rates contribute to the constrained mortgage landscape.
5. Data from Moneyfacts indicates a decline in average fixed-rate residential mortgages, albeit with expectations of limited decreases.
6. Despite the potential for lower mortgage lending, the Bank of England’s hesitancy to cut borrowing costs may restrict significant declines.
7. UK Finance predicts an increase in mortgage arrears and repossessions, with numbers expected to peak in 2024, but assures that most customers will eventually recover their financial positions.
