Answering the Top Property Investment Questions in 2024

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What Are the Top Questions About the UK Property Market in 2024?

In 2024, navigating the UK property market will likely raise many questions, whether you are stepping into the market for the first time or looking to add new properties to your portfolio.

As the market recovers following a difficult 2023, we’re looking at some of the most popular questions about the UK’s housing market for the next 12 months.

This article offers insights to help investors make informed decisions in the ever-changing property investment landscape.

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How Has the UK Economy Affected the Property Market in 2024?

While 2021 and 2022 marked a boom period in UK property following the Covid pandemic and Stamp Duty Holiday, 2023 suffered due to various external factors. Covid, the Ukraine crisis, and Liz Truss’s controversial mini-budget contributed to high inflation. In response, the Bank of England raised the UK interest rate 14 times in a row, reaching 5.25%. As a result, mortgage rates also became much more expensive.

Typically, when inflation and interest rates are high, buyer and seller activity drops as people have less money to spend. With the cost of borrowing elevated, 2023 was a subdued year for property investment.

However, since the start of 2024, we have seen a considerable uplift in buyer and seller activity. Foxtons have noted a surge in supply and new listings in the year’s opening weeks, while Chestertons are seeing a 21% increase in buyers submitting offers for properties.

This is due to the fact that inflation has come back to down to 4%, while interest rates have stayed the same since last summer. This led many mortgage lenders to lower their rates competitively. Renewed affordability is tempting many buyers and sellers back into the market to resume their buy-to-let investment strategy.

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Do Rental Properties Still Require a Minimum ‘C’ EPC Rating?

In September 2023, the Government removed numerous energy-efficient policies requiring landlords to upgrade their homes. Despite this, Sunak encouraged households to enhance their EPC rating anyway.

The initial policy mandated that, by 2025, properties needed to achieve an EPC rating of C or higher for new tenancies, extending to existing tenancies by 2028. Both of these measures have been discarded.

An Energy Performance Certificate (EPC) indicates a building’s energy efficiency, specifically in terms of heat and light consumption, with scores ranging from A to G.

Sunak assured that the government would persist in subsidising energy efficiency efforts.

Despite the Government reverting these EPC regulations, buy-to-let investors should still prioritise EPC ratings when making investment decisions. For instance, if you were to purchase a new-build apartment, it is likely to have an EPC rating of A or B – 80% of new-builds achieve these ratings.

This type of property helps tenants save money on their energy bills, making the property a more desirable place to live. New-build property investment also ensures that you may not need to make any energy efficiency upgrades to meet potential Government regulations in the future. Why not take a look at some safe investments with high returns with our insights guide.

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Will UK Property Prices Go Up or Down in 2024?

It is important to remember that nobody can accurately predict whether property prices will increase or decrease. As 2023 shows us, nobody can predict the external factors affecting property valuations.

However, renewed confidence in the property market has tempted some forecasters to change their 2024 price growth predictions. For example, Knight Frank, who initially predicted a slight decline in prices over the next 12 months – amended their prediction and now expects prices to rise by 3%.

We could also note how the property market often shows resilience in economic uncertainty. At the start of 2023, many forecasters expected prices to drop by a double-digit percentage. However, the decline was much slighter than anticipated. In fact, the Halifax House Price Index showed that prices actually increased by 1.7% from December 2022 to December 2023.

Discover More: Check out our guides on how to start a property portfolio and best buy-to-let areas in Manchester for more buy-to-let insights.

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What Is the Best Area in the UK to Invest in Property?

The best areas to invest in UK property depend on your investment strategy.

For example, suppose your primary goal is to see capital growth, and you are more interested in long-term strategies. In that case, you’ll want to consult the Savills Residential Property Market Forecasts to see which regions will likely have the highest capital growth potential. The Mainstream Capital Value Forecast shows that the North East, North West, Yorkshire and the Humber and West Midlands have the best capital growth potential in England – all exceeding the UK’s capital growth prediction of 17.9% by 2028.

Alternatively, if you are looking for short-term gains, you should focus on areas with high rental yields and good-value properties. Zoopla puts the average UK yield at 5.49% – anything above this could be considered good returns on your investment. For instance, Liverpool has an average rental yield of 7.43%, representing an enticing opportunity for buy-to-let investors. The city has low average property values, good employment opportunities and a large student demographic.

If you’d like to know more about buy-to-rent property in the North West, check out our guide to apartments for sale in Liverpool.

Would you like to know more? Take a look at our latest buy-to-let area guides for the latest insights:

Answering the Top Property Investment Questions in 2024