A Year in Review and Predictions for 2024
As we bid farewell to 2023, it's time to reflect on the rollercoaster ride that defined the property market over the past year. In this blog post, we'll delve into the highs and lows, unexpected turns, and what we can anticipate in the coming months.
MS
Manning Stainton
A Surprisingly Busy December
The year concluded with an unexpectedly bustling December, marking a 23% increase in sales agreements compared to the previous year. This surge, the highest in over a decade, showcased a resilient market, reminiscent of the post-lockdown rebound in December 2020. The heightened interest was fueled by a substantial 27% rise in buyer registrations during the last quarter of 2023, underpinned by a more stable mortgage environment.The Tale of Two Halves
2023 unfolded as a tale of two halves, with the first half grappling with the aftermath of the infamous mini budget in September 2022. Prices fell, interest rates rose, and the market faced considerable challenges. However, the second half witnessed a remarkable turnaround, especially after the summer, paving the way for the soft landing many hoped for. Contrary to doomsday predictions, double-digit price drops did not materialise, and various indices reported differing outcomes, leaving us to gauge the market's true status.Predictions for 2024
1. The Borrowing Environment: The cost of borrowing and mortgage rates played a pivotal role in shaping the market's dynamics. The difficulties of the past year are expected to subside, with a more settled borrowing environment. Charting the Bank of England's interest rate fluctuations, coupled with the ten-year gilt chart, indicates a positive outlook for mortgage rates. Lenders vying for market share by offering competitive rates is already evident at the year's outset, contributing to sustained demand.2. Supply and Demand Dynamics: A persistent challenge lies in the inadequacy of housing supply to meet the growing demand in the UK. The population is expanding and aging, yet we fall short of the government's building targets. This supply-demand imbalance continues to exert upward pressure on prices, preventing the significant declines forecasted by some experts.
3. Price Expectations: Despite the market's resilience, a subdued growth outlook prevails for 2024. Prices are anticipated to fluctuate between 0% and a modest 3-4%. This projection underscores the ongoing influence of supply-demand dynamics on the property landscape.
4. The Black Swan Event: The specter of a Black Swan event looms, with the impending general election in the latter half of 2024. The Chancellor's early March budget announcement is poised to introduce potential game-changers for the property market. The clarity of a clean election result becomes crucial, as the market traditionally responds poorly to uncertainty.
As we navigate the waves of 2024, anticipating shifts in interest rates, supply and demand dynamics, and potential political influences, one thing remains clear: the property market is resilient, adaptive, and continually influenced by a myriad of factors. Stay tuned as we ride the waves together and adapt to the evolving landscape.
