The UK Property Market is going through a turbulent period in which the effects of the COVID-19 pandemic, Inflation Spike, Interest rate hike, and regulatory reforms are reshaping the demand and supply of Properties. This blog post aims to explore the key factors that are influencing the current and future property market in the UK, and what they mean for property investors.
According to some experts, the UK property market is unlikely to crash but will experience a correction in 2024, with property prices falling by around 6% on average. This could create an opportunity for landlords to buy properties at a lower price and benefit from future capital growth. However, this also depends on the local market conditions, the type and quality of property, and the availability of finance.
Is buying property a good investment in 2024?
Investing in property is a great investment option in 2024. However, we might need to consider these factors when determining if these properties provide strong returns in the coming year.
- Limited Supply – The UK continues to face a property shortage, with demand far outpacing supply. This limited supply will likely support price growth and demand from buyers.
- High Demand – Millennials are entering into property investment, and many prefer new, energy-efficient properties. This swelling demand suggests properties may achieve quicker sales.
Will more buyers return to the market in 2024?
Buyers are currently hesitant to move amidst the uncertainty over property price falls and higher mortgage rates.
A recent survey revealed that parts of the population are still keen to move, but many are hoping and/or waiting for mortgage rates to get lower again before they do.
Energy Efficiency Gains Popularity Energy Efficiency is becoming an increasing concern for property buyers and investors. New regulations are due to come into effect in late 2024 or early 2025 taking the minimum EPC rating for new tenancies from E to C. As such, property investors with EPC ratings of C or above ensure they are prepared for new regulations.
The UK property Market in 2024
The Bank of England expects the base rate to peak at 5.5% at the beginning of 2024, and sources suggest the rate will begin to decrease by mid-2024 and stabilize at around 3% in 2026. This increase in certainty in the market is likely to mean that mortgage rates will also begin to come down, making property investment more accessible and driving property prices up.
Although investors have not experienced the growth previously seen in the UK market over the past 12 months, the acceleration of property price growth between 2020-2022 means that average UK prices have still increased by 25.9% over the past 5 years.
Conclusion
While predictions indicate a 2024 buyer’s market in the UK, buyers can’t be passive. Be ready to act decisively when the time is right. Target realistically priced properties and leverage your stronger negotiating position. Offer shrewdly and strategically. Stay resilient if deals fall through. With this multi-pronged approach, you can successfully capitalize on market conditions when looking to buy a property in the UK during 2024.
