Mid-year offers a prime opportunity to reassess the UK property market outlook for 2024 and beyond. Recent revisions to house price forecasts reveal a more optimistic scenario, suggesting potential growth despite some ongoing economic uncertainties.

Sales and Rental Price Projections

According to the latest data from Dataloft by PriceHubble, HM Treasury Forecasts, Savills, Knight Frank, JLL, and CBRE, sales and rental prices are poised for notable changes over the next few years:

• 2024: Sales prices are expected to grow by around 1%, while rental prices are forecasted to rise significantly, reaching nearly 5%.
• 2025: Both sales and rental prices show more balanced growth, with sales prices increasing by approximately 3% and rental prices also at 3%.
• 2026: The growth in sales prices is projected to remain steady at 3%, with rental prices slightly lower at around 2.5%.
• 2027: A substantial rise in sales prices is anticipated, with forecasts indicating a 5% increase, whereas rental prices are expected to grow by 3%.
• 2028: Sales prices are projected to increase by 4%, with rental prices maintaining a steady growth of around 2.5%.

Economic Factors Influencing the UK Property Market for 2024 and beyond

Several economic factors contribute to this positive market outlook for 2024 and beyond

1. Interest Rate Expectations: Although cuts in the Bank of England bank rate have not yet materialized, they are anticipated in 2024. This expectation, coupled with a tentative reduction in mortgage debt costs, supports the potential for house price growth. The BOE will be monitoring inflation months over the next couple of months before deciding on any rate reduction.
2. Economic Improvement: An overall improvement in the economic outlook has also contributed to a more favourable forecast for the housing market. With economic conditions stabilizing, there is increased capacity for house price appreciation.
3. Supply and Demand Dynamics: Despite the optimistic forecast, there remains a misalignment between supply and demand. This imbalance is likely to continue driving strong rental growth throughout 2024. However, this growth is expected to moderate in the subsequent years, aligning more closely with earnings growth.

Potential Impact of a Predicted Labour Government

The upcoming July 4th election is expected to result in a large majority Labour government. According to their manifesto, several key policies could significantly influence the property market over the next five years. Their first 100 days in Government and first Autum statement shall be an interesting watch and will determine the performance of UK property investment over the coming years. They need to find the proper balance between continued investment from Buy to Let Landlords while introducing initiatives to help first time buyers get a foothold on the property ladder.

UK Property Market outlook and Recommendations

For Asian investors looking to tap into the UK property market, these insights are crucial:

• Short-term Opportunities: The significant rise in rental prices forecasted for 2024 presents lucrative opportunities for investors focused on rental income.
• Medium-term Investments: The steady growth in sales prices from 2025 to 2028 suggests stable, long-term investment potential. Investors should consider properties in key cities like London, Manchester, Birmingham, and Liverpool, where growth trends are most pronounced.
• Interest Rate Watch: Monitoring the Bank of England’s rate decisions will be essential for investors, as any changes could significantly impact mortgage costs and, consequently, investment returns.
• Policy Adaptation: Understanding and adapting to the new Labour government’s policies will be critical. Investors should seek advice on navigating potential regulatory changes and capitalizing on opportunities arising from new housing initiatives.

Conclusion: UK Property market Outlook 2024

The UK’s property market outlook for 2024 and beyond appears promising, with revised forecasts indicating growth in both sales and rental prices. By understanding the underlying economic factors and market dynamics, investors can make informed decisions, positioning themselves to capitalize on these trends effectively.

For bespoke consultation and comprehensive market analysis, Asian investors are encouraged to engage with experts like Walpole and Partners, leveraging their extensive experience and data-backed insights to navigate the UK property market successfully. We look forward to hearing from you and can be contacted on +65 84688303 or continue to visit https://walpoleandpartners.com/market-insights/ for further updates.