The property market in the early weeks of 2024 has, despite a plethora of mixed news, demonstrated its resilience and activity levels have been stronger than those experienced in 2023.
At the macro-economic level we have seen the UK edge into a technical recession having seen two quarters of negative growth largely as a result of people cutting their spending habits and keeping their “powder dry”
Inflation (consumer price index) has edged down to around 4% and whilst still above the Bank of England target of 2% should, a new energy price cap reducing energy bills from April, reduce further in the coming months.
The Bank of England base rate which has been held at 5.25% since August 2023 having risen significantly in the period from December 2021 and is, according to economists, likely to fall to sub 4% in the second half of the year.
Mortgage rates are bouncing around a little at the moment having risen significantly but then reducing earlier in the year. If inflation and the Bank of England base rate reduce further then it is likely that mortgage rates will also reduce. Those currently locked into low fixed rate schemes will still however see a significant increase from levels of two or three years ago.
With a General Election due later in the year the Government will be looking to try and win favour with the electorate with eye catching (and more importantly) vote winning announcements. The budget is due on March 6th and we expect to see some tax cuts announced. The Government has already reduced NI payments by 2% (admittedly having raised them previously!) and there is much speculation about a revamped “Help “ Buy” mortgage guarantee scheme and changes in stamp duty land tax both of which have the potential of boosting the market although we must be careful not to simply go from bust to boom and back again!
On the ground, people are getting on with their lives.
Those that need to move and can afford to do so, are doing so. Those that either cannot currently afford to or whose motivation to move is not as strong, are, understandably sitting on their hands and waiting to see what develops.
Transactional numbers have risen a little from last year and will likely exceed one million in 2024. This remains below the levels seen a couple of years back.
Housebuilding remains at low levels as developers, in many cases, wait for more favourable conditions before committing to building. This, of course, reduces supply and does help keep property values higher but we would all benefit from a stronger and more active market volume wise.
The lettings market remains strong although, in the face of financing costs that have risen and a greater level of legislation to comply with, there continue a slow but steady exit of individual landlords from the sector. This, like housebuilders not building, reduces supply and keeps value higher although these are also balanced by affordability factors for tenants.
Overall, there is a market, the road is a little bumpy but sales and lets are being done and people are moving.
Sensible pricing to attract interest remains key and is seeing good values being obtained.
For sellers, taking advice and preparing for sale by having all key information available is vital. For buyers, ensuring finance is arranged is also key.
For landlords, ensuring your property is well presented and compliant with all legislative requirements is key to attracting the best tenants. As is offering a property on a managed basis as tenants want the peace of mind of knowing that their homes are going to be looked after and, should an issue arise, that it will be resolved quickly and efficiently.
As always, the experienced team and myself here at Christopher Nevill will be delighted to advise and assist you in achieving your plans in complete confidence.
Yours
Darren Murphy
