Jackson-Stops makes predictions for the property market in 2024
Jackson-Stops makes predictions for the property market in 2024: demand for space, value for money and amenity access top of requirements.
Key points:
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- National estate agent Jackson-Stops predicts house prices will hold firm in 2024, with some local markets expecting adjustment of up to -5% as another year of economic challenges looms
- Long transactions times and extended chains are causing challenges for buyers and sellers
- Downsizers and young families are the most active buyer groups in the current climate
- Energy efficiency, home working spaces, a manageable commute and proximity to quality schools are key priorities for today’s buyers
- A possible general election and housing policy changes could undermine or improve current activity levels
National outlook:
National estate agent Jackson-Stops expects UK mainstream house prices will, for the most part, remain stable in 2024. Two thirds (66%) of Jackson-Stops agents predict property prices to hold in 2024, the remaining third (33%) are prepared for a modest decrease in prices, though this varies by local market.
Whether this outlook will become a reality in 2024 will depend on a number of wider factors including longer term mortgage rates, availability of supply and a UK general election.
Upsizing families and downsizing retirees have been key drivers of property sales across the market and throughout the year.
The East of England is proving popular for young families looking for better value for money and greater opportunities outside of London. Colchester, recently having been granted city status, has become a hotspot for working families due to the manageable daily commute and good schooling.
The dual desire to relocate and downsize has put the South West at the top of many retirees’ wish lists, where Exeter notably provides city centre convenience as well as access to unspoilt countryside views.
Jackson-Stops predicts that homeowners seeking lifestyle changes and eager to unlock the significant equity they have built up will continue to be a dominant buyer group throughout 2024. Possible policy incentives to encourage owners to ‘right size’ have long been talked about to free up bigger family homes that are in high demand and short supply.
Across the market, Jackson-Stops agents are seeing a trend among some sellers to put their listings on hold until the spring when they hope there will be more clarity on the UK’s economic and political outlook. With stock already in relatively short supply, sellers without great motivation or need to move are holding off their next step in the hope of better market conditions with more choice as the year progresses.
Lengthy transaction time will continue to be a challenge for buyers and sellers with the time taken between sale agreement and exchange of contracts averaging 12 weeks in some markets. This has been in part because of the time taken to process mortgages currently, as well as the cross-county variations in acquiring searches and solicitors and licenced conveyancers sourcing answers to queries ahead of completion.
Nick Leeming, Chairman of Jackson-Stops, comments:
“Another unpredictable year for the property market has passed, proving that the only thing that is certain is uncertainty.
“Despite a challenging economic backdrop with mortgage rates impacting buyers’ and sellers’ plans which has prompted some to take a ‘wait and see’ approach, the property market continues to show signs of enduring strength.
“We expect a minor reduction in property values at worst, under 5% over the year, which will bring some house prices back in line with pre-pandemic levels.
“Transaction speeds have slowed significantly.
“All the skills that we employ to progress sales are having less impact than in previous years.
“Surveys are being treated warily by buyers – all the characteristics of a stickier market.
“But with the prospect of interest rates going down next year and a greater pipeline of supply which is likely to increase further in Spring 2024, there are reasons to expect a better market emerging as the year progresses.
“It is important that sellers continue to accept realistic valuations, reflecting a market that has greater competition once again.
“The possibility of a General Election in 2024, as early as May 2024, could cause buyers to pause and hold off making a long-term commitment until they know the impact and the chance of changes to housing policy.
“Though the reality of the housing market is that while those not pressed to move can delay a purchase, a change in lifestyle or circumstance ensures that a steady stream of transactions will take place throughout 2024, to levels seen in pre-2020.”
Country house market:
Energy efficiency, home working spaces, a manageable commute and proximity to quality schools will be key priorities for buyers in the country house market and will dictate buyers’ next moves. The reality of a market where buyers are not overly motivated to move can mean holding back until they find a home that ticks every box. This will put greater pressure on sellers to stage their home in the best way to guarantee an offer.
As interest rates remain at a 15-year high and with mortgage lenders increasingly wary of buyers’ affordability, ensuring that properties are listed at a fair price from the outset can help to get genuine, motivated buyers through the door.
Traditionally popular locations such as the Cotswolds will be sheltered somewhat from significant price adjustments and changes to demand because of the timeless appeal of the honey-coloured cottages and the slower pace of life that suits retirees and those looking for an English countryside bolthole.
The demand for more space, greater value for money and access to varied amenities will be top of the podium for buyers in the year ahead, but with only a handful of areas across the UK able to provide all three, this will only add pressure to competitive property hotspots.
Marcus Waddilove, Director of Jackson-Stops Colchester branch, comments:
“In Colchester, it seems we’re in for a stable phase, with a potential slight decrease in house prices. I don’t foresee a significant drop; rather, I expect prices to hover around the current range.
“Buyers continue to look for a bargain, aiming just below the asking price, which might keep things relatively steady.
“This projection is rooted in the recent adjustments the market has undergone.
“Properties in the southeast have become more attainable, prompting a slight shift in pricing expectations without a drastic impact.
“Earlier this year supply outweighed demand, but the tide is slowly turning.
“Deals are gradually materialising, attributed in part to a better handle on inflation and the stabilisation of interest rates (5.25%).
“This has reinstated some confidence, tilting the scales toward a more balanced market.
“Looking ahead to 2024, I anticipate a gradual uptick in demand post-February, possibly levelling the supply-demand imbalance.
“Families particularly drawn to Colchester’s numerous outstanding grammar and primary schools, continue to dominate our buyer demographic.
“Additionally, we’re seeing interest from London-based buyers seeking more value for their money in our area.
“The challenge lies in completing chains.
“While some are starting to come together, many potential buyers are held back due to their inability to sell their own properties.
“Solicitors’ and licenced conveyancers’ pace remains a significant hurdle in expediting the process, even with proactivity at other stages of the chain.
“The inevitability of life changes ensures movement in the housing market, whether due to growing families, marriages, job shifts, or other life events.
“Spring typically marks an uptick in activity, and I anticipate this trend continuing next year.”
Rupert Wakley, Director of Jackson-Stops Chipping Campden, comments:
“While the property market has cooled slightly since the peak of last summer, the Cotswolds’ honey-coloured cottages continue to captivate those who long to live in one of its picture-postcard parishes.
“Going into the new year, we expect prices to remain relatively stable with buyers vying to pinch a piece of the puzzle in this idyllic part of the English countryside.
“We anticipate a brisk start to 2024 as sellers aim to list before any noise of a potential election.
“Energy efficiency, home working spaces, and proximity to quality schools are emerging at the top of the list of buyers’ priorities.
“We’re also seeing consistent demand across demographics, from those with growing families looking to upsize, to those looking for something more manageable when faced with surplus space and higher energy bills.
“Mortgage rate rises have had a minimal impact as buyers tend to be making a cash purchase and as mortgage rates do stabilise this will only increase the competition.
“We’re still ploughing through longer transaction periods between sale agreement and exchange of contracts, with our last six transactions taking an average of 12 weeks.
“Revisiting the Home Information Pack (HIP) requirements for searches and surveys could help accelerate the process once again, but motivated buyers and solicitors are the key.”
Country lettings market:
Fierce competition and an exodus of landlords from the market in recent years will drive activity in the country house lettings market. Recent research published by Zoopla found that average rents rose by 9.7% on a year ago [1].
Across Jackson-Stops’ network rents are predicted to rise the most at the lower end of the scale (less than £1,500pcm) because there has been the lowest level of price rises within this section of the market to date. At the mid and higher ends of the country lettings market price rises are likely to be more subdued, owing in part due to the level of increases that has already been seen by the market following the pandemic to date.
Rental policy has also been a political staple in 2023 with the Renters Reform Bill, with the impact of this policy change on new rental properties entering the market and improvements being made to current properties not yet known by the market.
Will Jordan, Lettings Director of Jackson-Stops Cheshire, comments:
“In 2024, I foresee a price increase for properties below £1,500 per month, hitting the affordability ceiling for those on average salaries.
“However, between £1,500 – £4,500 pcm, rents may soften due to previous escalations in the last 24 months.
“Above the £5,000 pcm mark, rents are expected to remain fairly flat.
“Renters naturally have a specific checklist they adhere to, which predictably includes proximity to work or good transport links, a minimum number of bedrooms, and more specific features such as off-street parking or pet policies.
“While energy efficiency is gaining attention, it hasn’t become a deal-breaker for most renters, with flexibility remaining the overwhelming ask if other key features are met, even for properties with a lower EPC rating.
“Looking ahead to 2024, several factors are likely to shape the market.
“The proposed Renters Reform Bill, along with sustained high interest rates and elevated inflation rates, amidst an upcoming general election, are causing uneasiness among investors.
“This reticence might hinder the pace of new rental properties entering the market, leading to a scarcity of ‘affordable’ rental accommodations.
“Consequently, the residential property market overall may experience a slowdown, affecting both first-time buyers and tenants seeking new homes.
“We expect 2024 to be a subdued year across various segments of the rental market.”
London lettings market:
Alex McConnell, Lettings Director of Jackson-Stops Pimlico branch, comments:
“I anticipate a full throttle start to 2024, with January being an especially busy time for lettings.
“As we turn the page on a new chapter, “fresh starters” including empty nesters ready to downsize, couples coming together and new employees relocating to the city will dominate new enquiries.
“The momentum of the new year naturally increases into the summer months where demand often peaks with students and families making the move before schools return in September.
“While supply and demand are currently quite evenly matched, I suspect this may change.
“January and February are often two of the best months of the year to list a property with demand surging post-Christmas.
“In the peak months of 2023, we were receiving between two and five offers on listings, resulting in a ‘best bid’ scenario where properties were often rented over the asking price.
“With increased rents we’ve noticed the condition of properties, in terms of refurbishment and redecoration, is increasingly important to tenants.
“Tenants have higher expectations of landlords and if they are paying a premium price then the property condition should reflect this.
“Long-term tenancies continue to be a preference, with average fixed term contracts of 27 months, in light of slimmer stock levels for much of the year, both landlords and tenants are opting for the security and a healthy return on investment.”
London sales market:
Harry Buchanan, Director of Jackson-Stops Pimlico branch, comments:
“This year, the property market within prime central London has been an interesting interplay of factors.
“We’ve witnessed rising interest rates, yet stabilising mortgage rates.
“What’s stood out significantly is the influx of first-time buyers and the flexibility from lenders.
“Next year, the trend seems poised towards a strong first-time buyer market.
“Despite the presence of buy-to-let investors, the majority of buyers are eyeing opportunities to own a home of their own.
“Cash-buyers have been fairly consistent over the past 18 months, constituting nearly half of our current pipeline, a slight dip from recent figures.
“This shift could be attributed somewhat to the easing of mortgage rates, compared to the beginning of 2023.
“It’s encouraging to see the growing confidence among borrowers, with more individuals opting for lending opportunities and indicating a healthy appetite for home ownership.
“Next year, the expectation of a possible change in government is starting to be considered by the market but this does not inherently mean buyers are planning to put their search on pause, nor that there will be a wider downturn.
“In fact, the certainty of an outcome often can alleviate buyer inertia, helping both buyers and sellers to feel more confident in their decision.
“Market fluctuation and economic policies tend to evolve gradually, meaning that a Labour victory is unlikely to cause a significant change in borrowing but instead, provide a degree of stability even in times of political change.
“Ultimately, the market’s buoyancy hinges on the confidence of buyers and their readiness to engage in borrowing.
“With mortgage buyers showing an upward trend, there’s a reassuring indication of sustained interest in property acquisition through lending.
“This bodes well for the market’s stability and growth in the coming year.”
New homes outlook:
A re-emerging trend in 2024 for new homes is the need for incentives to drive sales. A tactic that wasn’t required during the pandemic at a frenzied time of the market is once again helping housebuilders to get buyers attention. With mortgage rates having risen and monthly payments in some cases hundreds more than 18 months ago savvy buyers are conscious of making sure their purchase decision makes the most financial sense.
Green property credentials are increasingly at the top of buyer wish lists for new homes with air source heat pumps, solar panels and electric car charge points once again coming out on top as features that can make or break a sale.
Sarah Walsh, Director of Jackson-Stops New Homes, comments:
“The new-build market remains tenacious, but to continue to drive sales in a more unpredictable climate the market needs to be creative with incentives – something that hasn’t been offered for a number of years.
“For smaller properties likely to attract first-time buyers, deposit contributions offer a welcome helping hand, while for bungalows, that generally appeal to downsizers, part-exchange supports a smooth moving process.
“Homeowners’ purse strings are increasingly tight, with many more cautious and conscious to make the most financially astute decision.
“Quality, low-maintenance, energy-efficient homes command the most attention yet interested buyers are sitting tight in the hope spring will bring forth a long-awaited easing of interest rates.
“Air source heat pumps and solar panels continue to trigger interest and, while most homebuilders install electric car chargers as standard, this is an investment for the future as we’re yet to see significant demand for this at the top of buyers lists.
“While well-designed floorplans still count, a picture-perfect outlook is having its moment, with nice views over farmland, chimney pot rooftops or nearby water all highly requested.
“The market has adjusted to a balancing of supply and demand with lower buyer numbers making effective pricing and offering additional perks paramount to secure sales.
“Exchanges are taking an average of 8-10 weeks as completing deals proves more difficult; with solicitor communication and momentum being key to an efficient transaction process.
“Overall, the market remains resilient, but sales require creativity and ingenuity.
“Helping buyers save money, offering lifestyle perks and setting realistic pricing all help properties sell.”
These predictions within this article were identified via qualitative research among the Jackson-Stops network.
[1] https://www.zoopla.co.uk/discover/property-news/rental-market-report/ 11 December 2023
Kindly shared by Jackson-Stops
