UK Property Market Report: January 2024
February 1, 2024
Signs of spring are flourishing across the UK this month. And just like the snowdrops that are pushing through the cold winter earth to enjoy a bit of sun on their face, so too is the UK property market alerting us to a new season. Current market movements are pointing to better things to come; good news for property investors who have weathered a tricky 2023.
This month’s market report will outline what’s currently happening in the UK market and how this should guide when and where investors should buy UK investment in property in 2024.
What is happening in the UK property market at the moment in January 2024?
Leading portal Zoopla revealed its annual UK comparisons this month that showed a real spring in the data.
Number of sales up 13% on January 23
Supply of homes available to buy up 22%
A 21% increase in new buyer demand in London (nationally there was a 12% increase in new buyer demand)
A 17% increase in new sales in the West Midlands (13% in London, also a top performing area)
At the same time, Rightmove released data at the beginning of 2024 that showed the biggest increase in house prices in eight months.
What is driving the movement in the UK property market at the moment?
Mostly, buyers are coming back onto the market because of lower lending rates. There was a point this month (January 2024) when the number of mortgage products on the market was the highest it’s been in 15 years (5899), really hammering home (excuse the pun) how much competition there is out there amongst lenders for homebuyer’s money.
And clearly, according to the Zoopla figures above, sellers are now once again putting their homes back on the market – over a fifth more homes to buy compared with this time last year. That said, it is very much a buyer’s market. Note Zoopla’s Richard Donnell’s comments:
“Buyers remain price sensitive and focused on value for money. Over-optimism by sellers could quickly stall the current improvement in market activity.”
The advice is clear; sellers don’t get greedy.
What about the new build market?
As we know, national data doesn’t always translate into the new build market where up-to-date figures are harder to gain because the property completions are delayed and price figures are only shared on completion. From the data we’ve seen, it suggests that new build prices have held their values and have not seen the flatlining or slight decreases of UK averages for existing properties. In some places, based on the available data from the ONS between Jan-August 2023, the value of new build properties has increased markedly – notably in Birmingham by 6.7% and in Manchester by 5.9%. This is great news for investors eyeing up UK off-plan and new build buy-to-lets.
Where to buy investment property in the UK in 2024?
Well, according to the figures above, Manchester and Birmingham - obviously! Further confidence in the North West came from Savills 2024 Cross-Sector Report, released in early January that put North West buy-to-let at THE TOP of their comparative returns chart:
Note how UK wide buy-to-let scores highly for income return (and in capital value growth).
The report also highlighted that “London is now the most affordable it’s been since 2014 thanks to low price inflation and rising earnings.” Affordable might be a relative term here with the capital showing a house price to earnings ratio of 13:1 (Manchester and Birmingham are both around 7:1), still, for those eyeing up London buy-to-lets it provides a compelling reason to buy.
We realise that in these recommendations we’ve hardly nailed our colours to a single mast; London, Manchester, Birmingham (and actually according to the chart above UK buy-to-let in general), but all investors are not alike. Each of these markets offer different price points and investment trajectories (all of which any of the RPA team will gladly outline to you). Yet, in terms of all of our developments in these locations they all share one thing in common; that is they fall sweetly into the category of what Savills terms, ‘Best-In-Class Occupational’, a class which is one of their top investment picks to buy in 2024.
When should investors buy in 2024?
As ever in life, we can’t always get what we want, everything, everywhere all of the time. There is always a trade-off. If you have a sizeable deposit to invest then you will find this heavily rewarded by the current mortgage products on the market – the rates of which will have likely reduced dramatically by the time you come to complete. Win, win! Oxford Economics predicts a base rate of 3.75% by the end of 2025, with others in The City forecasting six quarter point cuts from May that will take it to 3.75% by the end of this year. But, and herein lies the rub, if you wait for even lower rates to materialise you will most likely lose the advantage of buying in a market that’s yours, that is to say to say a market that’s weighted towards buyers, i.e. you, especially off-plan buyers.
Recall how this article began - those figures from Zoopla, which will most likely have the effect of pushing prices up. Knight Frank certainly thinks so, at the turn of the new year forecasting a 3% rise in prices by the end of 2024.
Our view is that the golden opportunity to buy is now. And your yields and ROIs will thank you for it if you do.
If you’d like to talk to a member of our team please do get in touch. We have exciting new developments launching this month in Birmingham city centres and if you’re unfamiliar with us or wondering how we work then we have a whole host of glowing reviews on Trustpilot from happy clients who have bought UK investment property recently.
The spring we’ve all been waiting for is here folks.
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RICHARD BRADSTOCK
MANAGING DIRECTOR
about the AUTHOR
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals. The RPA Group was born out of a duty of care to provide property investors with an industry-leading and integral service, one that connects investors with quality and desirable investment opportunities, whilst providing reliable and trustworthy market commentary and analysis alongside, enabling investors to make the best, most-educated decisions for them.