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After an unsettled and unpredictable end to 2022, with the impact of soaring inflation and rising interest rates then shaping 2023, the residential marketplace looks to be a more resilient and stable place in 2024.

The year began with forecasts from industry voices like RICS, Nationwide, Rightmove and Savills making cautiously optimistic predictions. Month on month we have seen activity levels continue to creep up, and as we head into the summer, there’s momentum in the market which suggests these initial forecasts seem to have been accurate.

A positive start

The encouraging start to the year was apparent quite early, with the number of new properties coming on to the market for sale in January up 13% on the previous January. Importantly, buyer demand was also 7% higher. And while these initial positives were still quite tentative, the increase in demand was again reflected in the Bank of England’s figures for February, with mortgage approvals surging to their highest level since September 2022. As the rate of inflation started to fall, and as mortgage rates stabilised, it seemed that housebuyers had adjusted to the higher cost of borrowing. Despite higher mortgage rates remaining an obstacle for certain sectors of the market, buyer confidence has continued to grow over the last six months, and will likely be further boosted by the prospect of lower interest rates within the year. 

Although there was evidence of an increase in new sales instructions and buyer enquiries, the volume of completions was fairly consistent in the first quarter of the year. However, more signs of optimism were evident when figures published for April showed a rise in completions above the previous year for the first time since November 2022. 

At Countrywide, our enquiry and policy levels naturally follow the residential lending and property markets quite closely, and we saw this trend continue this year, mirroring the positive signs of the housing market recovery. We saw movement in activity from the middle of January, when the volume of quotes we were providing started to climb. And as transactions complete, we’re now seeing that increase mirrored in the number of policies issued. The increase has been especially noticeable in the number of residential enquiries being submitted via Elite, our online service. A rising number of referrals for bespoke quotations has also been apparent over the last few months.

In line with the residential market, the commercial property sector also faced a number of challenges in 2023. Spiralling material and labour costs, combined with hikes in energy prices and higher interest rates costs  combined to present challenging conditions for residential property developers and the office and retail sectors alike. 

While these factors haven’t disappeared altogether, early signs in the first quarter of 2024 indicated that the commercial market might be picking up. The end of financial year is traditionally an extremely busy time for commercial transactions and this is a pattern that we saw repeated this year. Alongside this, we’ve continued to issue policies on development site transactions that have been ongoing for a number of years. This highlights the lengthy periods of time between an initial quote being provided and the policy finally being issued, and the resilience of the commercial market itself. 

Election effect?

With a general election only a few weeks away (at the time of writing), it will be interesting to see whether the economy, and subsequently the property market, experiences any kind of summer slowdown. Will buyers and sellers wait to get a better understanding of what policies and support they may be promised by various political parties before going ahead with their plans? Market commentators seem to suggest that the election is unlikely to cause serious disruption. While the actual date may have been called a few months earlier than anticipated, an election has long been a known quantity for 2024 and many buyers and sellers will have already factored it into their plans. Additionally, figures from 2015 and 2019 show that the previous two elections didn’t adversely impact activity in either year. Quite the opposite, as the property market benefitted from a post-election boost in both cases. 

Onwards - and hopefully upwards!

As the year reaches the midway point, many experts are predicting further falls in inflation, and that we’ll finally see the much-anticipated interest rate cuts towards the end of the year. These will certainly impact the market overall, and we look forward to the next six months with a good deal of optimism.

Needless to say, whether you’re rushed off your feet with a large volume of residential transactions or you’re digging into the detail of a complex development case, our team of underwriters are here to provide support for all your legal indemnity requirements – whoever ends up in Number 10. We’re still proud to have the largest and most experienced team of underwriters in the market, and have been recruiting in the past few months to add further numbers to our team. This means that, however the market responds to the vote on 4th July, as a Countrywide customer you’ll continue to benefit from the same great service, regardless of how you choose to contact us.