"We could see buy-to-let investment ramp up next year, with over a quarter of existing landlords having already confirmed plans to expand in 2024."
This year proved to be plenty eventful for the property market, with 2023 managing to have a surprising number of ups as well as downs. In fact, despite appearances, 2023 has arguably been a year of recovery and lowering prices.
Inflation peaked at 11.1% in October 2022 but since then, we’ve seen CPI drop to 4.6%. We still have a way to go until normality returns, but at least we’re on the right track.
By the looks of things, the relative strength of the economy has brought with it renewed confidence from lenders. In the first half of 2023, hundreds of mortgage deals were pulled from the shelves with little-to-no notice as pessimism took hold. But, as we all pushed on, mortgage availability returned and by late November, record numbers of products were available for prospective borrowers.
Despite lenders being in a better position now however, good news hasn’t been shared evenly across the property landscape. In the public sector, we’ve seen several backtracks from the state, likely leaving investors on an unsure footing. Michael Gove, for instance, vowed to reform the rental market, and introduced the long-awaited Renters Reform Bill in May.
Yet, we also saw several backtracks from the Levelling Up secretary. Including amendments to the Bill on planned student let rules, rowed-back plans on gas boiler ban plans, and watered-down leasehold changes. Elsewhere, we saw planned Energy Performance Certificate (EPC) changes scrapped entirely, and continued back peddling on the infamous 300,000 new homes target.
And of course, we had both a Spring Budget and an Autumn Statement from the government this year. The former had few announcements for the property world, but the Autumn Statement delivered a few notable bits of news. This included an extension of the Mortgage Guarantee Scheme, £110m set aside for new home developments, a removal of a Local Housing Allowance freeze, and plans to allow easier residential conversions.
What could be on the horizon for 2024?
So how does this all set us up for 2024? Hopefully, we’ll continue on a path of recovery - especially where house prices are concerned. House prices faced pressure throughout 2023 but, according to official Land Registry data, the average property price in the UK in January 2023 was £286,321. By September, it was £291,385.
House price predictions vary between predictors, but the latest data from Halifax showed a surprise rise in November. What’s more, some expect house prices to rise by nearly 6% on average by September 2024.
Also, fortunes for landlords may rebound in the coming months. We saw an apparent “landlord exodus” this year, but rental demand is now triple what it was before the pandemic. We could see buy-to-let investment ramp up next year, with over a quarter of existing landlords having already confirmed plans to expand in 2024.
We also see more activity from smaller developers looking to take advantage of a favourable conversion and renovation environment. Should rates continue to lower, we may also see an uptick in first-time buyers entering the market, while existing homeowners may be keen to refinance and seek out better terms.
Regardless of what’s on the way in 2024 though, the most important thing is that specialist lenders remain ready for anything. As we keep on pushing our way out of the economic mess we were in, the bespoke finance industry must continue to embrace speed, flexibility, and optimism.
