Gareth Davies, Managing Director at Grosvenor Surrey
If you remember the financial crash of 2008, then you might remember people constantly referring to the ‘bottom of the trough’ – a term that essentially means that it cannot get any worse.
Admittedly, many of those were business owners who were as keen to convince themselves that the worst of it was over as they were those who would listen.
Now, the last 12 months haven’t been anywhere near as challenging as the financial crash. However, they have been challenging.
The good news is that we’re now at the bottom of that trough.
Rate of change
It wasn’t just the fact that the rate of inflation and the Bank of England’s (BoE) base rate of interest went up this year, but the frequency at which it went up. At points, it felt as though interest rate hikes were becoming a weekly event.
Thankfully, following the BoE’s decision to hold the base rate at 5.25 per cent, it feels as though we’re about to enter a more stable period. In fact, many experts are predicting that the base rate will begin to fall towards the end of Q2 2024. Some are even predicting a drop by the close of this year, although we feel that this is a little too ambitious.
A seminar I attended recently, which featured a discussion with Bank of England economist Rob Elder, debated how the rate of inflation during October is expected to be around 5 per cent. Whilst a little way off the target of 2 per cent, it’s still a substantial improvement on the 11 per cent peak earlier this year. The UK economy is undoubtedly moving in the right direction.
So, as we head towards the end of one year and the beginning of another, the inevitable question – and one that we’re being asked a lot at the moment – is ‘what will happen to property prices in 2024?’.
2024 property predictions
Compared to many of the UK’s counties, Surrey is relatively protected from the economic elements. Elmbridge, as a district, even more so. Despite this, we have seen a marginal decrease in property values across the area.
However, this seems to have slowed down following a surge in demand which began towards the end of the summer.
Not only that, but during the last five weeks we sold just as many properties as we did this time last year. Activity across all three offices has been surprisingly strong. And, if transactions remain high towards the end of the year, then it’s generally a good sign that this momentum will continue into the first quarter of the New Year.
The Grosvenor Surrey team believe that any further fall in property values will be around 1 to 2 per cent, which is nowhere near the 5 – 10 per cent figures that were being put forward earlier in the year.
This will also be reinforced by a drop (and hopefully a succession of drops) in the base rate, which we expect to happen sometime in the second half of the 2024 – a move that will make borrowing more accessible and boost demand for property even further. Indeed, borrowing costs have already dropped in anticipation of a base rate interest cut next year, and should continue to do so.
If you are considering selling early on in the New Year, we would recommend getting the ball rolling now. That way, you’ll be in a good position to hit the ground running at a time when interest in property is likely to dramatically increase.
Contact your local Grosvenor Surrey office to arrange a valuation of your property before Christmas in order to avoid the post-Christmas rush.