The UK housing market has persevered through a tough 12 months. House prices have largely remained resilient, especially in the busiest markets, with any falls in property value remaining small thanks to an underlying imbalance between supply and demand.
Now, the Royal Institution of Chartered Surveyors (RICS) has stated that the average house price will return to growth in 2025 following their latest research.
An increase in new buyer enquiries and new property listings has led RICS senior economist Tarrant Pearson to say: “With the inflation backdrop turning a little less difficult of late, this has led to expectations that the Bank of England will be able to start lowering interest rates later in the year.
“In keeping with this, near-term sales expectations point to an improving outlook, albeit the scope for an acceleration in activity will still be relatively limited given mortgage rates are set to remain much higher than in 2020/21.”
Buyer demand rose by 8% in March, perhaps not coincidentally the same time frame in which RICS reported house prices stabilising.
Combine that with a 13% increase in new instructions and you begin to see a picture of increasing confidence in the housing market on the ground from both buyers and sellers.
This should be of interest to all homebuyers and investors as it can take a while for official data to catch up with what is happening in real life. If this is the case, there could be good news ahead.
RICS analysis shows that the institution continues to foresee house prices returning to growth in all parts of the UK over the next 12 months.
Does this mean that you should buy UK property in 2024?
That will always depend on your personal situation, but it should give more confidence to people buying off-plan property where you pay the market rate today and earn capital appreciation over the construction period.
If you buy now and house prices increase over the next 12 months, you will see potential returns immediately following completion – the foundation of a good investment.
On the other hand, investing off-plan now can help you avoid today’s higher mortgage rates. You do not pay the balance until the property completes, meaning that you could be able to get a lower market price today, but pay for it with lower rates tomorrow if mortgage rates decline in the next 12-18 months as forecasted.
In this way, the RICS analysis shows that this could be an ideal time to buy off-plan property and enjoy benefits at all stages of the process.
Off-plan property for sale in city centre markets like Manchester, Birmingham, Sheffield and Preston is in a particularly beneficial place as demand in these markets is far ahead of the available supply.
This makes it like that investing in buy to let property in these locations will deliver outsized returns as you not only get the national average house price increases as of next year, but also benefit from local housing shortages.
Want to learn more about how to invest in off-plan property? Get in touch with the team today.
