Is 2024 the year to invest in property?

It may be the year of the dragon but it could also be the year of the property investor! Headwinds have quickly turned to more favourable tailwinds, with mortgage rates decreasing, optimism increasing, and the potential for a Spring Budget bonanza to assist budding and existing landlords.   

We’re already fielding enquiries about the evolving buy-to-let market so to give you a good snapshot, we’ve answered the most common questions below.  

Q. What’s the general feeling among landlords?

A. Two separate surveys have been conducted among landlords and they both revealed positive sentiment in the buy-to-let market. The first survey, conducted by Together, found 68% of landlords currently feel optimistic about the business outlook for 2024. Additionally, a third plan to increase the number of buy-to-let properties they own over the coming months.  

The positivity was reflected by the results of a similar survey, this time carried out by The Mortgage Lender. Of those landlords questioned, 74% felt confident about the shape of the forthcoming property market, with 27% feeling very confident. When it came to the performance of their own buy-to-lets, 71% felt confident and 78% of portfolio landlords (5+ properties) felt the most confident.     

Q. Will the Spring Budget help landlords?

A. The purchasing landscape could change for the better, as 2024’s Budget is the last before the General Election. The Chancellor will want to win votes and making it cheaper to buy a property is always a hit.   

Experts are predicting a change to the Stamp Duty Land Tax (SDLT) system: either increasing the thresholds at which property buyers pay tax; introducing a new SDLT holiday or reducing the percentage of tax people pay.  

The devil is in the detail, however, and we’ll be monitoring the announcement to see if any SDLT changes include additional property purchases. If they do, buying a first property investment or adding to a buy-to-let portfolio may become a lower-cost exercise. The team will also be listening for any changes to corporation tax, as a cut would greatly benefit landlords who hold properties in limited companies, as would an improved income tax threshold.  

Q. Are rents going to rise in 2024?

A. The amount charged for new tenancies has been rising for a number of years and at the height of the increases, rents rose by more than 10% in one 12 month period. While experts predict a little of the heat will dissipate from the rental market in 2024, Zoopla forecasts that rents will rise across the UK by anywhere between 5% and 8%, while demand from tenants will remain strong.  

Q. Will there be any capital appreciation in 2024?

A. Property price rises are good for landlords who count on capital appreciation to boost their fortunes, and it’s not every year you see predictions for rent and house price rises but this scenario is on the cards.  

If you read the property press at the end of November 2023, there were widespread predictions of house price decreases for the year ahead but forecasts have quickly been revised.   

Inflation has dropped more sharply than anticipated, wage growth is good and mortgage rates are decreasing, which are all predicted to act as stimulus in the sales market and may result in a value rise of 3%. Property price increases may also be reinforced if there’s good news in the Spring Budget.  

Q. Are mortgage rates cheaper in 2024?

A. That’s a resounding yes. As well as encouraging news concerning inflation, swap rates – which heavily influence mortgage rates – are stable. Together, these factors have enabled lenders to reduce mortgage rates across the board and this includes those attached to buy-to-let mortgages.   

We even saw a return to sub-4% deals for landlords at the end of January, with The Mortgage Works launching a two-year fixed-rate product on a 65% loan-to-value basis at 3.54%. This is great news for new-to-market landlords and property investors looking to add to their portfolios.   

If you have further questions about the current rental market and how you can take advantage of rapidly improving prospects, get in touch. We can help with all aspects of buy-to-let, from purchasing the right investment property and tenant find to compliance and full property management.