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Future landscape

Could there be a resurgence in the UK housing market in 2024?

Several factors could contribute to a resurgence in the UK housing market in 2024: 

Mortgage Pricing War and Interest Rate Cuts:  

A mortgage pricing war and anticipated Bank of England interest rate cuts could rejuvenate the UK housing market. Lower mortgage rates make home buying more affordable, potentially stimulating demand. However, the decision by the Bank of England to hold rates at 5.25% (1 Feb 2024) brings uncertainty to the future path of rates for the remainder of the year.

Political Factors:  

The possibility of a general election in 2024 could impact the housing market. If the election is scheduled for later in the year, it could invigorate the housing market in the spring. 

Housing Policy Evolution:  

The adaptation of housing policy to better reflect the economic, demographic, and social realities in the UK could stimulate the housing market. This includes support for the ‘build-to-rent’ sector, which has seen growing demand due to high mortgage costs and changes in consumer lifestyles. This could lead to the emergence of more large-scale, multi-tenure residential schemes. The new-build market in the UK is under significant pressure to expand exponentially due to the highlighted pressures on social and government housing for families under the cost-of-living crisis and the building asylum/refugee housing situation. 

Demand Outstripping Supply:  

With an estimated demand of some 230,000 new homes per annum needed in 2019 pre-Covid, this figure is now estimated to be over 350,000 per annum just to keep pace with demand. Currently, less than 50% of this target is being met. This will likely result in lenders needing to support the new-build market again, with signs of this already being seen as lenders relax their property lending criteria. 

Return of Confidence:  

After a year of sustained price falls in 2023, returning confidence could stimulate the housing market. This is indicated by a succession of unexpected monthly rises in the past three months and a larger-than-expected pick-up in activity. 

Increased Demand for Private Rented Housing:  

High mortgage costs and increased costs of living have led to growing demand for private rented housing. This could stimulate the ‘build-to-rent’ sector and lead to the emergence of more large-scale, multi-tenure residential schemes. 

So is now a good time to buy?

The factors identified in this post suggest that there are a number of reasons to be optimistic about the path of house prices in 2024.

If you’re an expat or overseas resident considering a house purchase in the UK, IMS is here to help. Visit mortgageims.com/services/ for more details

Categories
Future landscape

The world ahead: Our 2024 predictions

In our 2024 predictions, we foresee several international events that could significantly impact the global economy and political landscape. 

United States Politics 
The U.S. will be in the spotlight due to the upcoming presidential election. Former President Donald Trump is odd-on favourite to secure the Republican party nomination, potentially choosing a female running mate. However, the outcome of Trump’s ongoing legal battles could influence his candidacy and the overall political climate. 

Russia-Ukraine Conflict 
The ongoing conflict between Russia and Ukraine is expected to continue, with Russia potentially gaining the upper hand due to Ukraine’s exhausted U.S. military funding. This conflict has set Russia’s economy back by an estimated 30 years, as European countries seek alternative suppliers for gas and oil. 

Middle East Tensions 
The conflict between Israel and Hamas is a significant concern, especially if it expands to involve Iran-backed factions such as Hezbollah, Houthi’s, or Syrian elements. This conflict could have far-reaching effects, including potential impacts on the 2024 U.S. election. The situation has been further complicated firstly by recent U.S. and UK strikes on Houthi installations, and the subsequent drone attack on US solidiers in Jordan. 

Taiwan-China Struggle 
The territorial struggle between Taiwan and China has seen a significant development with the recent Taiwanese elections. Lai Ching-te of the Democratic Progressive Party (DPP) has been elected as the next president, marking the first time a political party in Taiwan has won a third straight presidential election. However, the DPP lost its majority in the legislature, indicating a more complex political landscape moving forward. 

UK Politics 

The UK is gearing up for a general election, with Prime Minister Rishi Sunak’s Conservative government potentially pushing for a swift reduction in interest rates, also following the US Federal Reserve’s lead. The election is constitutionally due by December 17, 2024, but could happen sooner, with Rishi Sunak recently signalling a potential autumn poll. The Conservative Party is facing internal challenges and poor polling, which could lead to a significant defeat. The Labour Party, under Keir Starmer, is currently enjoying a large lead in the polls. 

Western Market and China 
The Western market is predicted to be bullish for most of 2024 and into 2025, with Tech and Pharma sectors making a comeback, and strategies related to climate change and ESG being implemented. However, China’s economic slowdown could impact its major importers, and the country faces long-term challenges such as an aging population, stock-pile secrecy, and corruption. 

These international events could have significant implications for the global economy and political landscape, and we will continue to monitor them closely. Check out our next blog post where we will delve into the potential impacts of these events on the UK housing market.