The mortgage market performed better than expected in 2024, with a decrease in rates leading to a 16.4% increase in first-time buyers, UK Finance’s Household Finance Review for Q4 2024 has revealed.
The review found that growth in the final quarter was driven by borrowers aiming to complete before the Stamp Duty threshold changes in April 2025.
Internal product transfers remained the preferred choice for refinancing, but an increase in external remortgages is anticipated in 2025.
The final quarter of 2024 saw household deposits in high street banks rise, reaching £1,093bn in November, surpassing the peak of £1,085bn in December 2022.
Notice accounts grew to represent 25% of household deposits by year-end compared to 16% at the end of 2022.
Overdraft debt remained stable, while credit card usage increased, aligning with long-term trends, with less than half of balances being interest-bearing.
Eric Leenders, managing director of personal finance, said: “The final quarter of 2024 showed the resilience of UK households amid changing economic conditions, with mortgage lending showing strong growth and arrears continuing their downward trend.
“Consumer spending returned to growth for the first time in over two years and savings were up, with notice accounts proving popular.”
Leenders added: “The regulatory review of mortgage lending rules, which are arguably restricting the number of people who can access mortgage lending, will be welcome news for aspiring homeowners.
“Reviewing these rules would help with affordability issues, not just for first time buyers but also those looking to move further up the housing ladder.”
