As we close out 2024, Mortgage Strategy looks back on a year filled with important developments in the mortgage market.
From budget forecasts and stamp duty policy changes to the ongoing battle over mortgage prisoner compensation, these stories have defined the industry. 
Read all 10 stories below to discover the key moments that made 2024 a remarkable year in the mortgage space.
Budget 2024: OBR raises mortgage rate and house price forecasts
The Budget Office has revised its forecasts for house prices and mortgage rates in the 2024 Budget. Average mortgage rates were expected to rise from 3.7% in 2024 to a peak of 4.5% by 2027. House prices were expected to rise by 3% in early 2024, rising slowly and are expected to reach £310,000 by 2028, 2.5% above the March forecast. Real estate transactions and housing starts are also expected to increase significantly by 2029. The OBR said planning policy reforms could have a further positive impact on housing supply.
Budget 2024: Right to Buy discount falls, social rent rises
The Chancellor has announced that he will reduce the amount of right-to-buy discounts in the autumn budget, allowing local authorities to set aside the proceeds to reinvest in social housing. Rachel Reeves also confirmed investing £500m to build 5,000 social homes and proposed rent increases for social housing tenants to ensure financial stability for providers. . Discounts of up to 70% now reduced, raising concerns about affordability. Mr Shelter highlighted the risks to social housing supply as more than two million homes have been sold under the scheme since its launch.
Leasehold fees to be capped at £250 rather than zero: report
Leasehold reform under the Leasehold and Freehold Reform Bill would cap annual ground rents at £250 for up to 20 years, rather than abolishing them completely, following opposition from the Treasury. Michael Gove had originally proposed cutting fees to zero, but concerns that pension and insurance investments could be affected by £37bn prompted the change. Critics say the amendments are insufficient and would impose burdensome fees on leaseholders. Legal experts stressed that complete deletion could lead to large compensation claims. This bill is currently being debated in the House of Lords.
Budget 2024: Stamp duty on second homes rises to 5%
Finance Minister Rachel Reeves has decided to increase the stamp duty surcharge on second homes and investment properties from 3% to 5%, with immediate effect. The reforms, announced in the Autumn Budget, aim to fund first-time buyer support and facilitate 130,000 additional property transactions over five years. Industry reaction was mixed, with some expressing disappointment at increased costs for landlords and reduced demand for second homes. Experts warned of market challenges, particularly for first-time buyers in high-cost regions, but emphasized resilience and adaptability in the buy-sell sector.
Reeves to scrap lower FTB stamp duty threshold: report
Finance Minister Rachel Reeves had planned to scrap the stamp duty threshold increase for first-time buyers introduced in the 2022 mini-budget. The changes, which are due to end in March 2025, will cost buyers up to £2,500 and raise £1.8bn a year by 2029-30. The move will particularly impact buyers in London and the South East. Critics warned that it could reduce affordability and discourage first-time buyers. Industry experts predicted a rush to complete purchases before the changes would put a strain on the housing market during the holiday period.
Spring Budget: Stamp duty and public holidays tax breaks scrapped
Former chancellor Jeremy Hunt scrapped stamp duty relief for multiple property buyers and holiday home tax relief in his spring budget. Citing abuse and lack of investment in the private rental sector, he ended stamp duty relief from June 1, saving £385m a year. The tax relief for furnished holiday rentals will end from 6 April 2025 and will save £245 million a year. These changes are intended to eliminate the benefits of short-term rentals and may reduce the economic viability of vacation rentals, impacting local tourism and landlords' net income.
News analysis: Will the market reach mortgage rates below 3.5% by Christmas?
Roger Baird has found that UK mortgage rates could fall below 3.5% by Christmas 2024 due to inflation, US interest rate cuts and Rachel Reeves' Autumn Budget. The Bank of England's decision to cut the benchmark interest rate to 5% in August sparked optimism among brokers, but inflation remains stable at 2.75% and potential tax increases add uncertainty. are. Experts have given different predictions, with interest rates likely to settle between below 3.5% and 4.5%. Global economic pressures, energy prices and fiscal policy were highlighted as key factors shaping mortgage rate outcomes.
First 'mortgage prisoner' court begins tomorrow
Becky Bellamy reports that the High Court trial for 2,500 TSB Whistletree Mortgage prisoners will begin on 23 July 2024, with compensation claims of up to £30,000 each. Harcus Parker, representing 15,000 former Northern Rock customers, claimed TSB had charged these borrowers unreasonably high interest rates. The case follows a years-long campaign by mortgage prisoners who say they were exploited after the government sold their loans to inactive lenders after 2008. TSB denies the allegations and is defending the lawsuit.
NatWest's less than 4% direct trading frustrates brokers
NatWest began offering mortgage deals of less than 4% to direct customers, leaving brokers unhappy. Five-year fixed rates of 3.97% up to 60% LTV with fees of £1,495 are six basis points cheaper than those offered by NatWest brokers. Chris Sykes criticized dual pricing and highlighted its complexity. Nicolas Mendez emphasized the value of brokers and criticized the move as short-sighted. Moneyfacts highlighted that the overall cost of a mortgage is most important, noting that the likelihood of fixed interest rates is decreasing. Less than 4% of Nationwide's trading is still available to brokers, in contrast to NatWest's exclusivity.
NatWest begins trading below 4%, cutting interest rates by up to 79bps
