Will UK home sales rebound this year?

Home sales in the UK will begin to rebound in Quarter 1 of 2024 after having “fallen off a cliff” this year, predicts one of the world’s largest independent financial advisory, asset management and fintech organisations.

The assessment from deVere Group’s Investment Director, James Green, comes as UK property sales and, in turn, prices are falling at the fastest rate in a decade, according to several sources.

He says: “UK home sales have fallen off a cliff this year with stubbornly high mortgage rates having had a stranglehold on the housing market as the Bank of England has been raising interest rates at a clip to try and bring down red-hot inflation.

“Inflation peaked at 11.1% last October and has since eased to 6.8% in July – but this is still more than three times the Bank’s 2% target.

“As such, UK interest rates will peak at 5.5% next month, which will further weaken demand in the housing market.”

James Green continues: “However, towards the end of the year, we expect that the Bank of England, concerned about the impact of higher borrowing costs on the economy and to avoid a prolonged recession, will move to slow the interest rate increments.

“We believe that this would unleash some of the pent-up demand, and home sales in the UK will begin to rebound in Quarter 1 of next year.”

deVere’s property investment division, which has properties in several major cities and towns, has “clients eager to make the savvy investment in UK real estate” but are waiting for “signals from the Bank of England that the cost of borrowing has stopped accelerating.”

The Investment Director adds: “Now that inflation is gradually dropping back from generational highs, the central bank will be more likely to be persuaded to pause its rate hike agenda, which will boost the UK’s housing market.”

He concludes: “As rates begin to fall, there will be some decent property investment opportunities in the UK that investors will be keen to seize.”

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