2024 sales and lettings market trends and predictions
With 2023 coming to an end, entering the new year seems like the perfect time to turn our attention to the market trends that are just waiting to unfold in 2024. A series of research has delved into forecasts for the housing market in the upcoming year, so we explore our predictions for 2024 in this article, looking at how the sales and lettings markets might be affected.
Lettings
Rentals are in
Committing to a house purchase with a sizeable mortgage is a significant financial investment and increasingly, for a number of reasons, many turn to the rental market as a more flexible option with less longer-term ties and financial strains. The result has been a steady increase in demand for rental stock across all demographic and we anticipate this to continue as we move through 2024.
Shifting legislations
Legislation and regulation of the sector has been constantly changing for a number of years – 2023 has been no different with The Renters Reform Bill dominating the headlines on how the market might be shaped in the next 5 years. Consultations are also in play on topics ranging from Smoke & Carbon monoxide detection, electrical tweaks, and fire safety in multi-occupancy blocks. With an impending General Election in the next 12months housing will continue to be a political hot potato and expect more new requirements to be announced.
Supply issues
Increased regulation of the housing sector has made the provision of rental housing a more business and profit-related affair, with many smaller, private landlords exiting the market as a result. Additionally, a shift in housing strategy has occurred among millennials; many now opt to rent on a longer term, exasperated by the complications of higher mortgage rates and deposit requirements in an economy where it is difficult to get on the housing ladder. As a result, the average rent for new lets has risen by 9.7% in the last year and we don’t expect to see this fall in the coming months given the ongoing shortage of rental supply.
Sales
Demand remains resilient
The national press and many market commentators predicted a sluggish market in 2023 with economic woes impacting residential sales. Thankfully, the market appears to have brushed off many of the challenges throughout 2023, and we are confident we will see continued strong activity throughout 2024.
The growing appeal of downsizing
Owning a large country property or period home is the aspiration of many a would-be buyer. For growing families, these homes can offer that dream lifestyle; with plenty of space both indoors and outdoors, it’s easy to see the appeal. For those property owners who have now seen their children grow up and move on, these homes can become a financial burden. We have seen an increase in the number of downsizers entering the market and we expect this trend to pick up pace through 2024 and 2025.
Interesting interest rates
With tentative signs that inflation may be easing and talk of interest rates cuts during 2024, we are seeing the mortgage market become more competitive. The increasing availability of mortgages, combined with the more attractive rates that are now being offered bodes well for house hunters over the next 12 months.
Homes will need to be well-presented
The expected uptick in new instructions coming to the market in the peak spring, summer, and autumn periods means buyers will have increased choice in the market. Time and time again, we see well-presented and well-maintained homes achieving higher values and selling within shorter timeframes. Even small, seemingly insignificant differences in the presentation of homes that are for sale can have a very measurable impact on their saleability.
The rise of sustainability
In an age of economical awareness, energy efficiency is increasingly becoming a top priority for buyers when evaluating their next move. The cost-of-living crisis reinforces this shift; not only will it be more eco-friendly, but it will also be more cost-effective long-term. Energy efficiency measures such as solar panels, air and ground course heat pumps and updated windows & doors will all be high up on the wish list of purchasers.
A general forecast
The residential homes market is continuing to evolve and with a general election due in the coming 12 – 18 months, housing will inevitably move up the political agenda. The number of new homes still lags behind the targets set by successive governments and housing supply - or the lack thereof - is likely to play a big part in dictating the direction of the residential sales market for years to come.
Although a reduction in interest rates during 2024 is expected, the years of sub 1% rates are not likely to reappear anytime soon, with more normalised market condition rates settling at between 4 – 4.5%.
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