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2024 Outlook: Stability and Growth in the UK Property Market
After experiencing significant upheaval in the years following the pandemic, the UK property market is now displaying signs of steady recovery. Zoopla's latest analysis indicates that both buyers and sellers are regaining confidence, largely unaffected by the challenges posed by higher mortgage rates and the prevailing cost-of-living crisis. This article explores the critical factors shaping the property market's trajectory as we head into 2024.
Rising Supply and Demand: Over the past year, the UK property market has seen a notable increase in both supply and demand. Zoopla reports an 11% growth in buyer demand, coupled with a 21% rise in the number of properties being listed, reflecting strong confidence from both buyers and sellers.
Stable Mortgage Rates: According to Rightmove, current mortgage rates are averaging between 5.1% and 5.5%. These rates are projected to remain stable throughout 2024, which, despite potentially impacting buyers' willingness to purchase, suggests a market that is better equipped to handle these conditions, encouraging more participants to enter the market.
Supply Likely to Exceed Demand: Although there was a marginal 0.5% decrease in house prices last year, the growth in listings is outpacing the rise in buyers. This imbalance suggests that 2024 may see buyers in a stronger position to negotiate prices, due to an oversupply in the market.
Capital Gains Tax Reductions: In the Spring budget, the UK government announced a reduction in capital gains tax, which will see the top rate decrease from 28% to 24% starting in April. This change is expected to incentivise more homeowners to put their properties on the market in 2024, increasing the competitiveness among sellers to price their homes attractively.
The Importance of Competitive Pricing: The time it takes for sellers to find a buyer has increased from 45 to 66 days year-over-year, according to Rightmove. This change is often due to properties being initially overpriced, leading to necessary price reductions during the marketing period. It is therefore crucial for sellers to price their properties competitively from the outset to maximise interest.
Conclusion: The UK property market is showing consistent signs of improvement and is expected to continue on this upward trajectory in 2024. With growing confidence among both buyers and sellers, and external economic factors having less of an impact than in recent years, the market is well-positioned for both challenges and opportunities.
