Happy New Year to you and welcome to 2020. As most of you know, at the start of each year we like to look back and reflect on what has happened over the past year. Then, we look forward in to 2020 and give predictions on property prices and interest rates.
Firstly, let’s look at what happened in 2019
Property Prices
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- Halifax forecasted a 2 to 4% rise for 2019 and their House Price Index to November 2019 showed a 2.1% rise in prices, making their prediction correct.
- Nationwide’s House Price Index showed a 0.8% rise in prices up to November 2019.
- Zoopla shared that house prices rose by 1.6% in 2019.
Interest Rates
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- The Bank of England rate remained unchanged all year at 0.75%
- Mortgage product starting rates were typically 0.1% to 0.2% lower on both residential and buy to let mortgages in 2019.
Number One Mortgages
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- In 2019, we helped more clients than in any other year making it another record year. Thank you for your continued recommendations – keep them coming!
- In 2018, Lilly & Lucy joined the team to support you. They are both now settled in; enjoying their roles and being on your side to achieve your goals.
So, what about 2020…?
Interest Rate Predictions for 2020
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- Yael Selfin, Chief Economist at KPMG predicts rates to remain the same, possibly with a rate cut in February or May if economic weakness proves more persistent.
- Sarah Coles at Hargreaves Lansdown believes that the Bank of England won’t be keen to raise interest rates and it is generally expected to be a cut rather than a rise.
- Jeff Knight of Foundation Homeloans isn’t expecting much change at all for 2020, perhaps even a further cut to Bank base rate – depending on the politics.
- Anna Bowes, co-founder of Savings Champion, added: ‘If inflation remains below the official 2 per cent target, that could be a reason for the base rate to be cut’
Property Price forecasts for 2020
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- Rightmove recently predicted that the average price tag on a home will increase by 2% over 2020.
- Royal Institution of Chartered Surveyors (RICS) has also forecasted a 2% rise.
What do I forecast will happen to property prices and interest rates in 2020…?
The demand to own property in our great nation is huge, we live on an Island, broadly respect our green spaces and have a growing population. It seems likely that on 31st January we will BREXIT which I expect will see many people looking to purchase a property come out of the ‘wait and see’ camp. Subsequently, bringing more properties and buyers to the market. With the expectation of both more properties on the market and more buyers, I believe demand will be fairly consistent with 2019, maybe with a slight upward trend.
I predict that property prices will rise between 1 to 2% during 2020 and the Bank of England interest rate will remain at 0.75% throughout the year.
I am frequently asked; “when is the best time to buy?”. The answer can be different depending on personal circumstances, however, my answer is commonly; “when you see the right property for you and your family in combination with being able to proceed with affordable monthly mortgage payments, then this is the right time for you.”
What are Number One Mortgages plans this year…?
We’ve done our business plans and expect to continue to grow our team in 2020. Our focus is unchanged on providing great outcomes for you and offering an excellent service to keep you guys recommending us. We are comfortable in our High Street location and have the room to expand.
We are looking forward to achieving your objectives throughout the new year and beyond…
Have a great 2020!
Kevin Dunks
Managing Director
Managing Director