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.
