The Economics of the Property Market and What Might Happen Next

National Conveyancing Week 2024

By Daniel Hickey, Managing Director

This year started with positive news on interest rates, largely due to the many lenders becoming competitive in their terms. But a recent announcement that the UK is now in recession potentially signals a slow down to the early spring market. The reality is that the property industry is far from doom and gloom.

Property portal Rightmove started the year by announcing that house prices saw the biggest January rise since 2020 indicating that people selling their properties could fetch a high price compared to previous months and years. With 15% increase of new properties coming to the market, there is also more options for buyers in the market.

The average asking price for properties rose nationally by 1.3%. Sellers may find this encouraging, as it suggests that they could command higher prices for their properties.

Despite the initial rise in prices typically seen in the new year, it’s suggested that prices should only be around 1% lower by the end of the year. This implies a degree of stability in the market and suggests that any initial price inflation may not be sustained.

Last Wednesday the Chancellor delivered his spring budget, only three and a half months after his autumn statement. In relation to property taxes we saw the abolition of furnished holiday letting relief and the multiple dwellings relief on Stamp Duty Land Tax and a change to Capital Gains tax on property disposals, which is designed to draw in more revenue

Most residential property sales involve people’s main homes, which are eligible for Private Residence Relief (PRR) and this relief will continue to apply. But for where Capital Gains Tax (CGT) applies (such as on the sale of second homes, let-out properties, or those developed for profit), the higher rate of CGT goes down to 24%. The lower rate will continue to be taxed at the existing rate of 18%.

In summary, while property prices may experience some fluctuations during the year, the market appears relatively stable.

After years of uncertainty, it appears to remain an exciting time for the UK property market as more conveyancing firms realise the need for technology to transform processes resulting in a better experience for conveyancer, customer and stakeholder. Here at PLS this has always been a priority with our in-house team of developers continuously working improve our systems. Customer and Introducer portals streamline the back and forth of buying and selling properties by digitising key aspects of the process. This has led to improved efficiency and productivity within PLS, reducing administrative burdens.