Home sales in the UK will begin to rebound in the first quarter of 2024 after having “fallen off a cliff” this year, predicts independent financial advisory, asset management and fintech organisation, deVere Group.
The assessment from the organisation’s investment director, James Green, comes as UK property sales and, in turn, prices continue to fall.
He said: “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.”
Green continued: “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 believes that as rates begin to fall, there will be some “decent property investment opportunities” in the UK that investors “will be keen to seize”.
