Looking forward to 2024

Published: 22/01/2024 By Alex Maile

First off, I hope you all had a wonderful Christmas and New Year. We are, though, well into January now and so the decorations are all back in the attic and most of our resolutions have already fallen by the wayside. It’s also that time when we like to speculate about what’s in store for the year ahead, whether that’s for the sporting, fashion or financial world. And, this year, that includes the political world, because there’s going to be an election, and probably in the autumn.

Unsurprisingly, everyone in the property industry has been getting out their crystal balls, too. So, what have they been saying? Most agree that last year was challenging, with soaring rents and mortgage costs. This year, however, with mortgages (and the base rate) finally coming down, there is a very different outlook. There is a lot of pent-up demand out there, with so many having put their moves on hold, and the more benign conditions should help release some of it.

But, before we all get too excited, no one is expecting it to turn into a boom year. In fact, the majority of the pundits are betting prices will come down in 2024, but only by between 1% and 2% before bouncing back in 2025. What that means in reality is that the sales market is likely to start the year slowly and then build momentum, especially from the spring, as confidence builds and mortgage costs come down further.

In the rental market, in contrast, there was more of the same. Rents rose and supplies fell yet again in 2023, but not by quite as much as they did the previous year, suggesting they may finally be getting close to the limits of affordability. In 2022 the average UK rent rose by 10.8%. In 2023 that figure was 8.9%. Most commentators are predicting the rises will slow even further in 2024, coming down to around 5%. Landlords’ falling mortgage costs should also help relieve some of the upward pressure on rents. It remains to be seen, though, what effect the election will have.

The rental sector has become something of a political football in recent years and it is not yet clear what approach a potential Labour government might take. They have traditionally been even more pro-tenant than the Conservatives, but it is becoming clear that if you keep bashing landlords, it will backfire badly - reducing supplies and pushing up rents. Hopefully, if Labour get in, they will have learned from the Conservative’s mistakes and take a more measured approach.

Right, that’s it from me. If you want to take advantage of the more benign conditions, just give me a call. Otherwise, as usual, I’ll be back again next month.