Economic challenges through 2023 have resulted in a challenging and chaotic housing market. As we look to next year, experts predict that while some of the challenges may remain, others will give way to new opportunities for buyers.
The market has been shaped by volatile economic conditions, rising inflation, emerging social trends, and political policies too. Whether you’re saving up for your first deposit or thinking of adding more properties to your portfolio in 2024, it’s worth knowing about some of the latest predictions for next year.
High demand, low availability
The demand for quality housing in the UK will remain sky-high due to several factors. Population growth continues to put pressure on contractors, while increased urbanisation that we should expect to see more large-scale renovations and taller apartment blocks planned.
As young professionals graduate from university and start earning, they’re more likely to move away from their parental home. The market will also start to become stagnated by single-person households. As this demand soars, prices continue to rise in many areas too.
Experts predict that the housing market might slow down next year, largely due to inflation and subsequently high interest rates on mortgages. This is a particularly troubling issue for first-time buyers, who struggle to enter the market despite offering a deposit.
However, asking prices might eventually drop. But an unstable market is also threatening those looking to make a profit on the buy-to-let market. If you’re a landlord looking for advice, you should contact your local estate agent to help you plan for 2024 and beyond.
The base interest rate is still expected to rise as we head into the new year, with suggestions that mortgage rates will remain at around 5% for at least the next two years. Compared to historic trends, this makes the current market simply unaffordable for many working families.
Regional variations in the housing market are likely to persist. While London and the Southeast are most likely to experience continued demand and higher prices due to their strong economic demand and cultural allure, other areas might fall behind.
There are still parts of the UK expected to see moderate growth or price stabilisation as the year progresses. However, socioeconomic factors will continue to determine the true availability of housing in certain areas of the UK.
One of the most pressing issues is an increase in the number of holiday lets in areas where residents struggle to get on the property ladder. In some tourist hotspots, holiday lets almost negate the supply of new homes.
Sustainability and efficient technologies
Amid the climate crisis, many buyers will be prioritising sustainable features in their prospective new homes. From natural materials to professional installations like solar panels and air source heat pumps, the modern home should meet efficiency demands.
Furthermore, when eco-friendly features are combined with automated heating systems and other smart features, homes are much more likely to be purchased quickly. Landlords on the buy-to-let market should prioritise such features in their future investments.
The rise of remote work
Finally, one of the most significant and lasting changes triggered by the Covid-19 pandemic involves how many employees now work on a hybrid or fully remote basis. Having given workers more flexibility on where they choose to live, suburban towns and rural villages might now see an increased demand compared to previous years.
While workers still need to live within reasonable commuting distance of their workplace, there’s no longer a need to live in the city centre for many.
Unfortunately, the housing market will remain volatile as we head into 2024. High interest rates will make properties unaffordable for many first-time buyers, while those who’ve already secured a property will need to meet higher demands for mortgage repayments.
However, as demand increases in some suburban areas, we should start to see certain areas flourish.