The UK property market has proven itself to be resilient through a range of economic challenges over the past 18 months. High inflation, the cost of living crisis and global energy issues pushed the cost of borrowing up and demand for property down.
This led to UK house prices suffering for the first time in many years and had many people asking whether this was a good time to buy in the UK at all.
UK property market bounces back
However, UK property has bounced back in 2024 and the future looks bright. In August, the Bank of England reduced the base rate of interest for the first time in seven review periods, and that move appears to be filtering through to the market.
Mortgages with sub-4% interest rates are being offered by lenders again, and the latest figures from Halifax shows that house price growth has risen to 2.1% year-on-year as a result. The lower mortgage rates on top of a positive first six months of the year makes 2024 a definitive turning point.
This trend looks set to continue over the rest of the year and beyond. Amanda Bryden, the head of mortgages at Halifax, said: “Against the backdrop of lower mortgage rates and potential further base rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year.
Start of a new property cycle?
The big question for homebuyers and investors is: will this positive sentiment continue? Or in other words, is this the start of a new property cycle of house price growth, or a temporary blip.
All indications are that we are seeing the start of the latest long cycle of growth in the UK property market.
The basic facts of supply and demand kept the market resilient during economic crisis. The new national housebuilding target is 370,000 new homes annually, but just 231,000 were built in 2023 according to government figures. Additionally, analysis from the Centre for Cities shows that almost 650,000 new homes would be needed each year in reality to meet a shortfall of 4.5 million homes in the market.
That shortage of housing is now likely to continue pushing the market onwards as more potential buyers can afford mortgages and competition for the available housing stock grows.
Analysis from Savills shows that by the end of 2028 we could see house price growth of 21.6% and rental growth of 18.1%. If that forecast holds true – and economic conditions suggest that it will – we are at the start of a new cycle and this is the ideal time to buy UK property for both homebuyers and investors.
Where is the best place in the UK to buy property?
The busiest markets in the UK are regional city centres like Manchester, Birmingham and Sheffield where there is huge population growth and a demand for luxury housing.
Buying property in these areas which is within easy reach of shops, bars, restaurants, business districts and good transport options is a great way to achieve high growth and returns in the future.
The goods news keeps arriving for property and we are looking ahead at a positive future for the market. If you are interested in property for sale in Manchester, apartments near Birmingham city centre or want to know where the UK’s next big property hotspot can be found, get in touch with our expert consultants today.
