Over the last few weeks, major mortgage lenders have announced reduced mortgage rates ahead of the Bank of England’s review in February 2024.
Interest rates and utility prices are also showing signs of coming down, easing the financial pressure on UK buyers and sellers and inspiring greater confidence in the property market as a whole, though inflation is proving a little more stubborn.
If predictions are correct, we’re likely to see some positive changes in the UK housing market as the economy stabilises and buyers feel safe enough to take the next step on the property ladder and move forward with their lives.
Could this be a sign of better things to come? Here at Cobb Farr, we believe so. Based on our local market insight and metrics from the past few months, we are cautiously optimistic the housing market will improve in Bath, Bradford on Avon, and the rest of the UK.
Here are our thoughts and opinions on the housing market in 2024.
Mortgage rates look set to improve
During 2022 and 2023, skyrocketing mortgage rates, the high cost of living and other financial pressures has placed immense pressure on the UK property market.
This caused many potential buyers (especially first-time buyers) to pause before buying, waiting for the market conditions to improve.
Although the impact was less in Bath and Bradford on Avon thanks to the strong local market, we did see more buyers choosing to rent – although demand continued to outstrip supply.
However, over the last few weeks, several banks and building societies have announced better mortgage deals to encourage more potential buyers to invest. HSBC, Halifax Bank and Leeds Building Society are some of the main lenders who have cut mortgage rates, offering better deals on fixed-term mortgages that could potentially save homeowners thousands of pounds.
Additionally, the Bank of England is due to review the base rate on 1st February 2024 which is likely to affect the overall property market. If they choose to reduce base rates, this could inspire more lenders to reduce their rates, offer better mortgage deals and cause a mini-property boom.
We’ve already seen green shoots of improvement in our Bath and Bradford on Avon offices so far with an excellent footfall for this time of year. We expect family houses to sell faster than last year and with UK enquiries increasing by 26%, and new listings increasing significantly, we are hopeful for a very positive movement during 2024.
The rental market is likely to boom
While the high interest and mortgage rates caused an increase in demand for rental properties over the last year, this looks set to continue to 2024, despite the potential changes to mortgage rates, according to Jenny Draper, our rentals specialist:
“This year looks set to be similar to last year when it comes to rental properties in Bath and Bradford on Avon. Now the festive season is over, demand for rental properties is huge and we predict that rental prices could continue to increase because of the lack of supply.
“The fact that the local council isn’t granting any more HMO (Houses of Multiple Occupation status) means that it’s more difficult to find an ideal rental property for the numerous doctors, nurses and students who contact us every month. The competition for rental property in our area will be hotly contested this year.”
The general election could affect the housing market
The UK general election is expected to be held towards the end of this year and could impact the overall property market with a knock-on effect in Bath and Bradford on Avon.
On the one hand, political parties are likely to seek favour from the voting public and make promises that could improve the market. For example, last week Michael Gove, Conservative Secretary of State, announced he would have a new offer in place for first-time buyers to help them get onto the property ladder. If this happens, it could inspire greater confidence and breathe new life into the housing market.
At the same time, topics such as housing market stamp duty are going to be a hotly debated subject and could provide hope for the thousands of potential buyers who have been waiting for better market conditions. There are rumours that it may come down but we won’t know for sure until the March mini-budget.
On the other hand, elections are always a time of uncertainty so this could also cause a certain degree of instability and market conditions to slow temporarily. It’s hard to predict but this has sometimes occurred in the past.
Again, the housing market in Bath and Bradford on Avon will see less of an impact because of its overall local stability, the higher disposable income in the area and high demand for properties to both buy and rent.
Housing market trend predictions for 2024
Buyers will seek more turnkey properties
In 2024, we can expect to see increasing numbers of buyers looking for properties that are ready to move into, without needing to deal with the financial pressure or hassle of renovation.
We’ve already seen these changes in Bath and Bradford on Avon, with properties priced between £500,000-£1.2M being the most popular. Additionally, energy efficiency looks to be a greater priority for buyers in 2024 as climate change, sustainability and utility prices remain a concern.
People will relocate from villages to towns
Another interesting property market trend we’ve seen in Bath and Bradford on Avon in 2024 is a move back to towns from the countryside. Fewer people want to live in remote villages and demand amenities like banks, supermarkets, doctors, and post offices.
This has led to a surge in the popularity of properties in the Bradford area that still have a strong community focus, good bus and rail links and plenty of shops, despite offering a quieter, village-like feel.
While we still see high demand from those looking to relocate from London or abroad, for a better quality of life or to retire – as we have since COVID – this has decreased slightly as the larger blue chip companies encourage team members to return to the office.
Demand will continue to outstrip supply
In Bath and Bradford on Avon, we will continue to see demand outstripping supply for both sales and rentals, even if more decide to put their property on the market after waiting for economic conditions in the UK to improve. To this end, new listings continue to receive numerous applications,
This reflects the strength of the housing market in these areas and is unlikely to change unless mortgage rates and the cost of living improve substantially and encourage reluctant sellers to place their homes on the market.
According to Rightmove, the number of enquiries received for each rental property has increased 400% since 2019 and shows no signs of slowing in 2024.
Tips for local buyers and sellers in 2024
If you’re looking to buy or sell a property in 2024, there are a few steps you can take to take advantage of the positive changes we will hopefully see.
1. Be in a position where you can make an offer
Get your paperwork in order and apply for a mortgage in principle before you look at a property to give yourself an advantage. Instead of simply viewing properties to see what is available and putting your house on the market when you’re ready to move, make sure you’re ready to make an offer. We’ve seen many potential buyers lose out on great deals because they simply weren’t ready. Don’t make this mistake.
2. Secure a great fixed-rate mortgage deal
Given the recent reduction in mortgage rates, it could be an excellent time to choose a shorter mortgage period and then remortgage when rates further decline.
3. Consider a longer-term mortgage
If you’re struggling to get onto the property ladder, consider a longer-term mortgage.
While these are extremely common in the USA, they have only been available to younger buyers in the UK over the past few years. However, experts say we could see a return to this model with longer terms offered to people up to 75 years of age.
Although this means you could be paying back more money over the long term, this could help you get onto the property ladder. If rates drop, you can always remortgage.
4. Be shrewd about rental
While demand will continue to outstrip supply, there are a few ways you can make it easier to find a rental property. Here are some tips shared by our rentals expert, Jenny.
- Start your property search well before your tenancy ends.
- Get in touch with our team here at Cobb Farr to express your interest in rental property.
- Collect your payslips, a job reference and a reference from a previous landlord before you visit a potential property.
- Make sure you know how much you can pay, taking all costs including admin fees into account.
- Follow us on social media – we often share new properties to rent on Facebook before our website.
Summary
The UK housing market has faced numerous challenges over the past few years but shows signs of potential recovery in 2024.
In Bath and Bradford on Avon, we will continue to see demand outstrip supply for the foreseeable future, rentals remaining popular and buyers finally feeling confident enough to move forward with their lives and invest in a new property.
Should mortgage rates, interest rates and the cost of living continue to decrease, we are likely to see a good improvement in the Bath and Bradford on Avon housing market in 2024.
In other words, all signs point to a positive year. We feel confident, and so should you.
If you’d like expert help buying or selling your home in Bath or Bradford on Avon, contact us today. We would be delighted to guide you.
