UK Finance has published its housing and mortgage market forecasts for 2024 and 2025, together with projections for the 2023 full-year numbers.

The report stated: ‘In 2023, higher interest rates and household costs limited access to mortgage credit. Affordability constraints have also dampened external remortgaging activity, although there was growth in the internal product transfer market, where affordability tests are not required. Cost of living and interest rate pressures also pushed more customers into arrears, which were up on the historically low number in 2022, although the total represents only around one per cent of total outstanding mortgages in the UK.

‘The outlook for 2024 is one of continuing challenges in the mortgage market; however, the main pressures on affordability look to be peaking now.  Whilst it will take some time for the pressure on household finances to recede, we expect things to begin to look up in 2025.  Meanwhile, prudent lending standards and extensive lender forbearance will minimise the number of customers who struggle with their mortgage payments through this period.’