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UK Property Market Offers Encouraging Signs in 2024

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    Should Investors Enter the UK Buy-to-Let Market in 2024?

    The UK property market got off to a much better start in 2024. However, some recent analysis suggests that the market has become somewhat subdued, with many buyers struggling with mortgage rates.

    However, a new insight from Fine & Country indicates that the market showed some encouraging signs during spring.

    Let’s look at that information in more detail and see what it means for the UK buy-to-let market.

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      Is the UK Housing Market Poised for Growth?

      Nicky Stevenson, the Managing Director of Fine & Country, highlights that mortgage approvals and sales volumes are rising, indicating a positive outlook for the sector.

      Stevenson notes that inflation dropped to 3.2% in the year to March, with talk of a possible base rate cut potentially boosting market confidence. A survey by Dataloft reveals that nearly two-thirds of agents feel buyer confidence has improved compared to three months ago.

      In March, mortgage approvals hit 61,325, the highest since September 2022, a 20% increase from the previous year. Sales are also increasing, with HMRC data showing a third consecutive monthly rise, reaching 84,200 in March. Zoopla predicts 1.1 million sales in 2024, a 10% increase from last year.

      Stevenson suggests these are signs of recovery, noting a 1.1% rise in the average asking price to £372,324 in April. Lloyds Bank now expects a 1.5% increase in house prices for 2024, a shift from their earlier forecast of a 2.2% decrease. Earlier in the year, Knight Frank also revised their house price prediction for 2024, forecasting a rise of 3% by the end of the year.

      Buyers now have more options as inventory hits a five-year high, with 20% more buy-to-let houses for sale on the market than last year.

      However, affordability remains a concern for many. The property market in London, in particular, has been regarded as an expensive avenue for investors in 2024, with the average property price (£539,336, according to Halifax) far exceeding the national average.

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      Stevenson also highlights a decrease in the average time to sell properties, with the average now at 64 days in March, down from 78 days in January.

      Terraced houses sell the fastest, taking an average of 56 days, followed by semi-detached houses at 58 days. According to Fine & Country, this indicates that many buyers are looking for more affordable options.

      Luckily, smaller properties are proving popular in specific locations. For example, a recent City Residential study showed rental growth of 10 to 12% for flats for sale in Liverpool.

      Additionally, Shawbrook Bank reports that more than a quarter of investors thought urban apartments were a lucrative property investment in 2023 and would continue to be in 2024.

      Stevenson revealed that cash buyers are still significant in the prime rental market, representing 35% of sales in Great Britain, up from 30% the previous year. According to their research, if an investor’s funds allow, buying a property with cash could be an excellent way to navigate current market constraints, take advantage of subdued property prices, and increase yields in regions like the North West. Learn more about these changes in the property sector with our UK Interest Rates chart resource.

      For more property investment insights, check out some of our helpful buy-to-let area guides, such as:

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      Dale Barham

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      Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.