We might already have toasted the turn of the new year, but it's never too late to make a resolution - or even more than one. Whether you're a property buyer, a seller, a landlord, an investor, or some mixture of any of these, here are our suggestions.
1. For property buyers
(i) Watch mortgage interest rates
With some providers marking the start of 2024 with a reduction in mortgage interest rates, there's now reason for cautious hope that the financial pressure on mortgage holders might start to relax. However, you'll need to pay close attention to individual mortgage policies, as early indications are that providers won't necessarily reduce interest rates across all their products. An independent mortgage adviser is usually the best guide to what's currently available on the market.
(ii) Read up on the process
Before diving into a property search, read up on what the whole process involves. While you might think this is fairly obvious for anyone buying their first home, it's also sensible for someone making a second or subsequent purchase, especially if their most recent transaction was many years ago.
(iii) Know your compromises
As any fan of Kirsty and Phil could tell you, almost every property purchase involves a compromise or two. Accepting that this will be the case is the first step. Identifying the compromise - or compromises - that you'd be prepared to make is the second. It might be location, outside space, number of bedrooms or perhaps the amount of work you'll need to do in order to get the property to how you want it to be.
2. For sellers
(i) Don't be too prescriptive with price
By all means know your bottom line - or, in other words, the price below which you will not go. However, focusing too hard on recent trends in sold property prices and using them as a benchmark for what your own property is worth is risky. The property market is always unpredictable, and, as with the climate, small "microclimates" can confound your expectations.
(ii) Know your market
Going hand in hand with a realistic approach to price is knowing your market. This is always important, but it's crucial in a falling market, when buyers may need something special to tempt them out. Making your property that "special" one might sound hard, but it's often more a question of stage management and ensuring that the right people get the right information at the right time. For example, if you have a large family home in the catchment of a reasonable school, you might have to work a little harder than someone half a mile down the road who's selling a property in the catchment of an outstanding school. Accepting that your property is likely to sell for less than your near neighbour's is part of the battle. So, too, is who you pick to market your property (are they experienced in marketing your sort of home, and do they have an existing list of potential buyers?) and when you choose to put the place up for sale (marketing a family home in the school summer holidays may not work in your favour).
(iii) Don't be too pessimistic
Despite all the gloom about house prices, it's well worth noting that many analysts now expect average sold property prices to stage a slight recovery this year.
3. For landlords and investors
(i) Focus on adding value
In the current "generation rent" market, it would be all too easy to sit back and allow the tenants to come to you. However, even in times of high competition among tenants and low affordability, landlords are still best advised to make them and their properties stand out for the right reasons. For example, offering flexible leases, permitting sub-letting, and investing in technology such as "Resident Apps" are all ideas that may help a landlord attract the best tenants.
(ii) Watch for the affordability ceiling
Although rents in most areas are currently at an historic high, there are already indications that rental price growth may be slowing. For example, Savills is forecasting a 6% growth for 2024, which is considerably lower than the 9.5% recorded last year. Admittedly, it's still an upward trend, although some analysts have already identified 2025 as the year in which rents nationwide will hit an affordability ceiling.
(iii) Watch the progress of proposed rental reforms
Although the Renters Reform Bill, which was launched in May 2023, is unlikely to become law until the end of this year at the very earliest, it's still important to keep track of its progress through Parliament. If enacted in its current form, the new law will ban Section 21 evictions, end fixed term tenancies, and make it harder for landlords to deny tenants the right to keep pets. These are all changes that a landlord may need to work into their long-term business plan.
(iv) Watch the financial landscape
The increasing tax burden on landlords has prompted many of them to exit the lettings market. One recent survey suggests that a third of all landlords are considering doing the same but, before you join them, bear in mind that demand for rental properties remains very high.
(v) Remember the General Election
While we are by no means an election pundit, there is a widely held belief that the country may see a change of government before the year is up. And, even if that turns out not to be the case, the existing government may include rental reforms and tax changes in its own election manifesto. In other words, whichever party wins, it's not a good idea for any landlord or property investor to assume that the property market will make it unscathed through the election process. For example, although the Labour party is clear that it intends to push through section 21 reforms as soon as possible, the Conservatives are also making noises about their own intentions for rental market reform.
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