House prices, the car market and Clarkson (CKN)
House prices rose for the third consecutive month as a lack of supply outweighed the demand slump caused by higher interest rates.
According to data from lender Halifax (HALP), the value of the average UK home has hit £287,105, rising 1.1 per cent in December after increases in November and October. It brings the total increase for 2023 to 1.7 per cent, but the lender forecasts a drop of 2 to 4 per cent in 2024 because it believes interest rates will remain elevated even if the Bank of England has stopped raising them. ML
New car market drives ahead
The UK’s new car market had its best year since 2019 in 2023, with registrations increasing by 17.9 per cent year-on-year, to just over 1.9mn vehicles. However, the annual figure is still 17.6 per cent below pre-pandemic levels.
Last year’s increase was driven almost exclusively by fleet investments as an unwinding of supply chain constraints fed into pent-up demand for new vehicles, according to the Society of Motor Manufacturers and Traders. Fleet sales were up 38.9 per cent year on year, but demand from private buyers was flat given high inflation and cost-of-living pressures.
Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said falling interest rates should make car financing deals cheaper. An expected increase in households’ real incomes should also support a continued recovery in demand. MF