Is 2024 a Good Time to Invest in the UK Property Market?

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Is Now the Right Time to Buy?

Falling house prices and cut mortgage rates are good news for those looking to jump on the UK property market ladder, with higher levels of affordability potentially offering greater security.

But, with borrowing costs still on the rise and the possibility of even lower house prices down the line, is now a good time to invest in buy-to-let property?

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What’s Happening to UK House Prices?

The housing market hit a bump in 2023, with prices beginning to slip as rates increased and the cost of living crisis hit in full swing.

According to Zoopla’s December House Price Index, the average house price was £264,400, representing a -0.8% drop compared to the previous year.

However, in January 2024, these drops began stabilising as more sales were agreed upon at the start of the year. In fact, there was reportedly a 12% increase in buyer demand for property in the first weeks of January compared to last year, reflecting a return to form following a weak second half of 2023 in which many buyers delayed due to rising mortgage rates. There has also been a 22% boost in the amount of properties listed for sale, suggesting increased market confidence.

Zoopla expects prices to remain in check throughout the rest of the year, owing to a sustained buyer’s market and a greater supply of housing providing more choices.

With more than one in five sellers forced to accept offers that are at least 10% below asking prices, a buyer’s market could delay skyrocketing house prices in 2024.

Learn More: Want to know what to look out for when buying a rental property? Our comprehensive market insights are filled with the latest analysis and data to help investors stay ahead of the curve!

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High Rental Demand & Residential Capital Forecasts

Increased demand for rental property means that property could still be a good option for investors.

The average rent in the UK is now at £1,260 – 7.5% higher than last year – meaning that some strong rental yields could be on the cards, so long as investors choose the right location and strategy.

Rental demand, in general, has been on the up in the UK for several years now, particularly in areas popular with students and young professionals.

In fact, an NRLA study found that rental tenant demand in Q3 2023 was 65% higher than in 2022 and 22% higher than in pre-pandemic levels.

Despite property prices dipping, residential forecasts predict averages to rise again in the coming years.

According to the Savills Residential Property Market Forecast, property prices in the UK are anticipated to rise by an average of 17.9% by 2028. Regions like the North West and the West Midlands are expected to see even more optimistic growth, with a predicted 20.2% growth across the next five years.

Lower prices could, therefore, be a positive. By getting involved now, investors can take advantage of this affordability before property values skyrocket in the medium and long term.

Due to the higher average rental figures and affordable prices, the average UK rental yield has similarly risen, with buy to let properties in Liverpool and Manchester, for example, offering gross rental yields as high as 8% in certain regions.

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UK Property Market is Relatively Stable

Property has often been described as an “old-fashioned” investment option, and for good reason, too – it’s been around for a long time.

This long-standing reputation is arguably due to the housing market consistently proving its reliability and resilience in the face of price fluctuations and economic turbulence.

Throughout the COVID-19 pandemic, for example, despite many foreseeing the worst possible outcome, the property market remained strong. Prices, on average, dipped by only -1.02% before experiencing a significant upswing once the market reopened, with prices growing by around £37,000 since the start of the pandemic.

However, as with any investment type, the buy-to-let property investment market is constantly shifting. To secure long-term and consistent returns, it’s vital that you stay ahead of the curve and research as much as possible before getting involved.

Further Reading: Discover what to invest in right now for the long-term and the best buy-to-let areas with RWinvest’s 2024 investment guides!

Should You Invest in Property in 2024?

As mentioned, when you look at the market predictions, all signs seemingly point towards a robust long-term future for UK property investment.

For those seeking to maximise capital growth through this venture whilst also benefitting from high long-term returns, this solid future growth in house prices means that now, more than ever could be the optimal time to invest.

Explore the UK buy-to-let market in greater detail with our expansive area guides:

Author

Reece Pape

Reece Pape is a property writer at RWinvest. Utilising up-to-date property statistics and data, Reece aims to keep investors informed on the latest market developments.