Is 2024 a Good Time to Buy Property?

With 2024 fully underway, the UK’s property market is showing promising signs for prospective homebuyers with various economic, demographic, and market trends aligning. Many homebuyers who held back during an uncertain property market may think 2024 will be a good time to buy property, and with the market beginning to stabilise at the end of last year, 2024 presents a window of opportunity for those considering buying property.

After a year of record property price increases and difficult economic factors in 2023 seeing a slowdown in demand for properties; the last quarter of the year saw homebuyer confidence showing signs of improvement, particularly in London and the South East as the Bank of England held interest rates and property price growth began to settle. More recently, data from Chestertons comparing January 2023 to January 2022 noted a 21% increase in the number of offers submitted on properties in the UK.

Here, we’re taking a look at the current property market, its impact on homebuyers and whether 2024 is a good time to buy property.

The Emergence of a Buyer’s Market

The final quarter of 2023 saw the emergence of a buyers’ market, with many homebuyers holding back in the face of higher mortgage rates and the cost-of-living crisis causing demand for buying property to slow. This resulted in homebuyers who remained in the market holding a stronger position to negotiate when they came to buy.

A slower market is arguably a good time to buy property as there is less competition from the homebuyer market. Rightmove noted that homes are taking 21 days longer on average to find a buyer than this time last year.

While seller’s sentiment has picked up and things are becoming more balanced in terms of buyer and seller power, many property experts believe property prices will remain in check throughout the rest of the year – so all is not lost for homebuyers. If anything, more sellers returning to the property market means more choice for homebuyers.

Mortgage Rates May Have Peaked

One of the most significant factors influencing property purchases is the prevailing interest rates and overall affordability. At of the start of 2023, interest rates remained at historically higher levels than previous years, which meant many homebuyers deciding to hold off buying property.

However, there are signs that things may be improving for homebuyers, with The Bank of England holding base rates at 5.25% for the fifth consecutive time in March. Additionally, the Spring Budget revealed that the Office for Budget Responsibility expects inflation to drop to 2% in the next few months and, because of this, many property experts are confident that base rates will begin to decrease accordingly. This will therefore influence mortgage lenders to lower mortgage rates which will stimulate the market. We can see this already starting to come to fruition, as lenders such as NatWest and Santander are now offering of 3.89% and 3.94% respectively, whilst Forbes reports an average 5-year fixed rate of 4.46%.

Additionally, longer mortgage rates are being offered in a bid to entice homebuyers back to the property market. So called “marathon mortgages” were previously only available to the youngest of buyers, however as people look to reduce their monthly costs, the popularity of longer mortgage terms and the maximum age limit to borrow money has adapted to the tougher market conditions.

Comparing this to last year, 2024 could easily be considered a much better time to buy property, but with base rates remaining at 5.25% and wider affordability factors improving, property experts are hopefully things will continue to get better as the year progresses.

Enhanced Homebuyer Sentiment

These improvements in affordability and wider economic factors, plus the anticipation that interest rates will decrease throughout 2024 has had a positive impact on both buyer and seller sentiment.

Zoopla’s January House Price Index revealed that, in the first three weeks of 2024, the above mentioned sub-5% mortgage rates coming to market had stimulated demand for buying property –  with levels homebuyers activity looking at properties for sale up 12% from the time same last year. This is partly because many homebuyers waited for the property market to become more accessible before pushing ahead with their property purchases.

So, is 2024 a Good Time to Buy Property?

Buying property is a big commitment, and one that should be made centred around your individual circumstances and requirements. Your unique financial situation alongside several external factors need consideration when deciding when the right time to buy property is.

Whilst paying attention to market conditions is wise, homebuyers would do well to pay significant attention to the amount of time they plan to remain in the market rather than timing the market – which as recent years have shown can be unpredictable depending on wider economic and political events.

Attempting to time the market can help those whose desire is to make short-term gains, for example with a ‘flipping’ strategy, however time in the market and weathering the highs and lows of the property market is far more important for homebuyers who want to make long-term gains. Regardless of any relatively short term volatility, historical property price data has proven that UK property prices largely appreciate over time meaning in basic terms, the longer you hold, the higher the opportunity for financial gain should you come to eventually sell, wish to release equity and/or earn a passive income.

The truth is, there is no “perfect” time to buy, as the benefits of homeownership are felt over a long period of time. With the unprecedented property price growth experienced in the last 18 months, homebuyer sentiment has increased, and the number of sales agreed has jumped 15% higher than this time last year as people focus on the long-term benefits rather than the short-term barriers.

It’s always worth keeping an eye on UK property market forecasts as they are a great starting point to help you navigate market conditions. But ultimately, if you’re waiting for the “right time” to buy property, you could arguably just be waiting to make a comparable financial gain.

If 2024 is your year to buy property, discover our top hotspots for buyers, here.