Mortgage rates are expected to come down next year but this will take time so there may not be any immediate hope for those coming up to a remortgage, Coles said.
“This means weakness is likely to remain in the property market,” she added. “The fact that rate rises have been passed through so slowly to homeowners means we may still have a fair amount of bad news yet to make itself felt in the market, so we’re not expecting a particularly golden year for property.
“Housing transactions have fallen to their lowest level since the middle of the pandemic and the Office for Budget Responsibility expects them to fall another 6.9 per cent in 2024. House prices, meanwhile, are expected fall 4.7 per cent during the year - according to the OBR.”
A combination of rising taxes, inflation and higher interest rates mean living standards are expected to be 3.5 per cent lower in the coming tax year than they were before the pandemic, Coles said.
But she added that for those in employment, wages are likely to keep pace with inflation.
“Overall, the economy is expected to grow less than 1 per cent, which could have a knock on impact on hiring and firing, and the OBR expects unemployment to rise during the year.”
amy.austin@ft.com
