The Halifax data suggests that “recent rises in mortgage rates may have started to weigh on the housing market at the end of last year a bit more than previously thought,” said Ashley Webb, economist at the consultancy Capital Economics.
Mortgage rates ticked up in November, as markets forecast that the BoE will lower borrowing costs more slowly than previously expected. However, mortgage costs remain well below their peak reached in summer 2023.
Webb expects mortgage rates to fall to 4 per cent — further than most expect. This would push house price growth to a healthy 3.5 per cent in 2025, higher than the consensus forecast of 2.5-3 per cent.