2023 was a year of turbulence and change for the buy-to-let property market in the United Kingdom, over the last quarter of the year, the fog slowly started to clear and investors were greeted with more favourable mortgage rates, better supply on the market, and more affordable property prices. While the years leading up to 2023 could be described as a seller’s market, our property consultants take a look into the new year and highlight predictions that show 2024 could become a great buyer’s market. This is everything you need to know if you are a landlord in the UK or looking to become one in the new year.
Improved mortgage rates
It is widely acknowledged that there won’t be a return to the era of extremely cheap borrowing, given the gradual phasing out of central bank policies that initially introduced cheap money to support economies after the global financial crisis and during the pandemic.
The current 4-5% mortgage rates are still historically low, although they are higher than in recent years. We may not see them return to the low levels we saw during the pandemic, but throughout 2024, they are forecasted to continue falling as a result of the third base rate hold from the Bank of England, it is suggested that we’ll see a 100bp drop in the bank rate across 2024.
More affordable house prices
In the coming year, house prices in the United Kingdom are expected to fall between 2% and 4% according to Halifax. The Office for Budget Responsibility says that the recovery of prices to peak 2022 levels may take until 2027. This is in line with Savills’ latest predictions that across the UK house prices will see a 3% drop and in London this drop will be slightly higher at 4%.
As developers and sellers still try to recoup losses and as a result of the uncertainty that still surrounds the market, buyers can negotiate much more effectively and benefit from seller discounts in 2024. Property discounts coupled with falling house prices present a strong opportunity for landlords to enter the market or expand their portfolios during this time.
Increased buyer demand and competition
At the end of 2023, Zoopla reported that buyer demand was up by 19% from the year prior. As the year came to a close, we also witnessed improved sentiment within the market. With the lowering mortgage rates and house prices predicted in the upcoming year, demand and sentiment could continue improving over 2024 leading to increased buyer competition.
Although it is important not to discount the affordability concerns still present, the growth in demand seen by Zoopla still acts as a positive indication for the 2024 market. With more demand, there will be increased buyer competition. Getting in the market early will give buyers the option to find the best buy-to-let property for their goals.
The emergence of a buyer's market
2024 is a buyer's market, with an opportunity that has not and will not be seen in a very long time, which offers buyers the chance to secure great value at the beginning of a market on the upturn with lots of growth to recover from.
The year will offer a generational opportunity for buyers to capitalise on an economy that is showing many indications of nearing the end of its most turbulent period in decades. Inflation has halved since this time last year and it is expected to do so again in the upcoming year; hitting the 2% target looks promising as a result.
Over the past 70 years, there has been a strong trend of growth in the UK property market. Following this course, it can be assumed that the growth that has been lost in the previous years will need to be recouped in the medium to long term. With the prediction of falling mortgage rates and property prices over the coming year, profiting from the capital appreciation that could be witnessed in the years beyond 2024 is an opportunity that buyers should take advantage of.
Entering the buyer's market in 2024
The buy-to-let property buyer’s market of 2024 provides a great opportunity for landlords who are looking to enter the market or expand their portfolios. Reducing mortgage rates and house prices leaves room for increased returns on investment. With GetGround you can find, finance, manage, and sell your property investments all in one place. To learn more and get started, you can book in a call with our team.
