What will fill property headlines next year?

Brokers discuss the potential key features of 2024

What will fill property headlines next year?

The housing market has endured a turbulent few years, with COVID, the cost-of-living crisis and sky high interest rates just a few of the challenges in recent times.

So, as we draw closer to the end of 2023, what do brokers expect to see over the course of next year?

Charles Breen (pictured left), founder and director at independent, whole of market broker Montgomery Financial, said the trend he expects to see in 2024 is a further decrease in interest rates, helping to awaken the housing market from its ‘Rip Van Winkle’ phase of stasis.

Lenders have continued to slash rates over the past few weeks, with Santander one of the latest to do so, following its reductions on selected residential and buy-to-let fixed rates.

“The prospect of slightly reduced house prices over the past 18 months, coupled with a gradual decrease in interest rates, is expected to lure a substantial influx of first-time buyers back into the market,” Breen said.

This favourable combination, he added, may embolden individuals to embark on the journey to homeownership, especially considering the escalating costs of rents, rendering homeownership a more economical and stable alternative.

In response to the prevailing cost-of-living crisis, Breen’s predictions also point toward a significant uptick in debt consolidation over the coming year.

He added that faced with the burden of increased debt over the last two years, individuals are likely to find consolidation an increasingly attractive and advantageous option.

“The ongoing downward trajectory of interest rates further enhances the appeal of debt consolidation, presenting it as a more viable and beneficial choice for those grappling with financial challenges,” Breen said.

As economic dynamics evolve, he believes the landscape appears conducive to a resurgence in first-time homebuyers and a strategic shift towards debt consolidation amid the prevailing financial climate.

Kundan Bhaduri (pictured right), property developer and portfolio landlord at The Kushman Group, a provider of family homes, HMOs, hospitality spaces, hotels, professional co-living spaces, and commercial developments said that viewed through the lens of landlords and property developers, the prospect of converting houses into two flats emerges as a transformative opportunity for many small developers.

This strategic move, Bhaduri added, not only enhances housing stock availability but also augments the potential value of these properties.

“Simultaneously, the anticipated reduction in interest rates is poised to invigorate the homebuyer's market, creating a favourable environment for property transactions,” he said.

While the Autumn Statement did not unveil the anticipated cut in stamp duty rates, he said, rumours suggest a potential announcement in February regarding such reductions.

Regardless of this outcome, Bhaduri believes a surge in distressed sellers is on the horizon, particularly as fixed-rate terms conclude for many in 2024.

“This impending scenario presents abundant opportunities for the enterprising, enabling them to secure highly attractive deals at subdued prices,” he said.

However, Bhaduri said that this surge in distressed sales may exert downward pressure on overall house prices.

In essence, Bhaduri added that the landscape for landlords and property developers appears dynamic, with the dual potential of house conversions and market shifts driven by interest rates and potential stamp duty adjustments.

“Navigating this terrain requires a keen entrepreneurial mindset to seize the promising opportunities presented by an evolving property market,” he said.

What are you expecting to fill the housing and mortgage market headlines in 2024? Let us know in the comment section below.