A further fall in property completions in November 2023 may be the nadir of the property market as forecasters look ahead to 2024 with cautious optimism. November completions were around a quarter down on 2022 and marginally lower than October as the market continues to adjust to the challenges 2023 has presented with high inflation, fluctuating house prices, and increases in borrowing rates.
The non-seasonally adjusted November numbers 87,640 completions, 22% lower than November 2022 and 2% lower than October 2023. The seasonally adjusted estimate was 80,780; 22% lower than November 2022 and 1% lower than October 2023.
Given the timing of the release of HM Land Registry transaction data, around 6 weeks after the event, the figures may represent the nadir in the property market as bodies from across the profession approach 2024 with “cautious optimism.” Consecutive Bank of England base interest rate holds in the face of falling inflation have fuelled speculation that interest rates have peaked and cuts could come in 2024.
In recent months estate agents and associated bodies, including Rightmove, Zoopla, the Royal Institute of Chartered Surveyors (RICS) and Propertymark have all cautioned against pricing properties too high, indicating that there is demand in the market at the right price.
As interest rates ease and affordability improves we could see a “partial recovery” according to the Halifax UK Housing Market Review and Outlook for 2024 with UK Finance predicting that annual transactions will hover around 1m in each of 2023 (1.03m), 2024 (1m) and 2025 (1.03m).
Commenting on the latest transaction figures Propertymark CEO Nathan Emerson says:
“2023 has not been without challenges for the housing market, with price fluctuations being a strong indicator of wider economic health. We have seen a brutal mix of high inflation and elevated interest rates knock consumer confidence across the year.
“Propertymark are positive the peak of the turmoil is now hopefully behind us; however, we must tread with caution over the coming months. We are currently seeing pockets of house price growth, which is reassuring, but to be fully confident this must be universally seen across the entire UK.”
2024 will also see the major political parties begin their campaigning for the next General Election with the property market a regular battle ground for vote winning policies. Prime Minster Rishi Sunak has already announced the Spring Budget will be on 6th March with speculation that tax and housing will be high on the agenda.
Secretary of State for Levelling Up, Housing and Communities Michael Gove made a number of announcements in the run up to Christmas with planning reform part of an updated National Planning Policy Framework, with plans to strip councils of planning responsibility if they fail to meet targets amid statistics which showed the lowest new build starts and completions in 20 years.
