Research Shows Positive Signs of a Winter Surge in the UK BTL Market
The UK housing market is showing positive signs of a pre-Christmas boost for sale, according to the National Association of Property Buyers.
A spokesman for the NAPB, Jonathan Rolande, asserts that prices may go against expectations in the wake of recent falls.
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What Did the NAPB Say About the Early Winter Housing Market?
According to Rolande, the run-up to Christmas 2023 could be a strong period for the buy-to-let property market, mainly due to a determination to get sales over the line before December 25. He says:
‘Despite what many people think, the run-up to Christmas can be a good time for the property market. It’s true that the number of people who start looking to buy or sell reduces in the early winter months, but there is good news, too.
‘Those committed to moving will be focused on getting to the all-important completion day in time for Christmas.
‘Don’t expect the increased activity to reflect in house price data, though; the rush to complete is for property sold many weeks before, meaning new sales will be few and far between until January.
‘When figures for the final quarter are released, they may show sufficient activity to have supported prices that have prevented another drop – that is about the best we can hope for as we see out the year.
‘If that trend continues into 2024, many in the property industry will breathe a huge sigh of relief – it could have been a lot worse.’
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What Positives Can We Expect From the UK Housing Market?
There are many reasons why property investors should be optimistic about the coming months.
For instance, stable interest rates and dropping inflation are likely to induce increased buyer activity, especially with mortgage lenders lowering their rates to remain competitive. In addition, higher rents and increased gross rental yields across the country mean a substantial ROI is available for mortgage-free landlords.
Rolande agrees, stating:
‘There is some cautious optimism around too. I hear talk of landlords looking to buy again, tempted back by higher rents – sadly, what’s bad for tenants is good for them. Interest rates have quite possibly peaked, making ‘cash in the bank’ a less attractive option for many who will be tempted to put their nest egg into a home for themselves, a relative or buy-to-let.’
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Could the UK Election Benefit the UK Housing Market?
Typically, election years result in a subdued housing market as buyers and sellers wait to see which party comes out on top. However, Rolande points to a potential shift throughout 2024.
‘An election may lend a boost to the market as the government tries to create a ‘feel-good factor’ to boost their chances. Fuel bills have dropped, and if the winter is mild, we will all spend less of our income keeping warm this year compared to last. Some will see an increase in their pay packet following the reduction of National Insurance in January, and a rise in the minimum wage in April will help many.’
Indeed, the Autumn Statement will ensure renters are better off, which means tenants are more likely to keep up with rental payments. This could tempt new investors into the market.
We could also have the post-election housing market bump to look forward to in the early months of 2025. According to a Guardian report, when Boris Johnson won the 2019 election, house prices increased due to newfound political stability – an effect dubbed the “Boris Bounce”.
As you can see, there is cause for optimism in the housing market this Christmas and looking ahead to the new year.
With mortgage rates falling and inflation plummeting – not to mention wages rising at a faster rate – we expect to see more movement throughout 2024 as house prices bottom out and start increasing again.
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