As mentioned, a recession would have to be prolonged to impact interest rates, and the Bank of England’s base rate has been at a 16-year high since August, holding steady at 5.25% despite the technical recession. This has contributed to the slowdown in the housing market in the past year. However, many forecasters, such as Savills, have stated that they anticipate interest rates to fall later this year thanks to the improving economy. The Bank’s own economic report also shows a more positive growth outlook this year after the stronger-than-expected first quarter.
2023 was a longer challenging year for the housing market, with subdued growth in some areas and price dips observed in the worst affected regions. However, with the improved economy and promising signs observed in housing market activity during the first quarter of this year, a return to growth has been predicted. Savills has even recently upgraded its forecast to reflect the stronger growth predicted in the mainstream residential market this year and in the next five years. The previous projection for UK average price growth was -3.0% negative growth, but they now believe there will be positive growth in 2024 of 2.5%.
To learn more about the UK property market, look at some of our recent buy-to-let area guides highlighting topics such as available investment property in Wolverhampton and Aberdeen investment properties.
UK Economy Climbs Out of Recession: What Does This Mean for Buy-to-Let Investment?