As we usher in a new year, Savills paints a promising picture for UK property investment in 2024, pinpointing specific sectors poised for success. Here's an exploration of the optimistic factors driving the market and the potential opportunities awaiting savvy investors:
Top Performers Revealed:
Savills identifies the stars of the UK property market for 2024, naming residential buy-to-let in the North West, London industrial properties, and retail warehouses. The anticipated annual returns range from 8.5% to 9.2% between 2024 and 2028.
Steady Returns Amid Stability:
With interest rates finding stability, Savills anticipates a robust outlook for UK property investment. The focus shifts towards income potential, providing investors with a steady and reliable source of returns, and prioritizing income over capital growth.
Challenges Transforming into Opportunities:
Turbulence in mortgage markets and regulatory changes impacted the residential sector in 2023. However, Savills foresees more favourable conditions in 2024, with inflation approaching the Bank of England target, fostering a more stable environment for investors.
North West Shines Bright:
Despite challenges for landlords, the North West emerges as a beacon of opportunity, offering a forecasted return of 9.2%. Investors are less reliant on debt and stand to benefit, making it an attractive prospect in the evolving market.
Rise of Institutional Landlords:
Challenges in the private rented sector are expected to propel institutional landlords forward. Build to Rent and Purpose Built Student Accommodations are set to play pivotal roles, presenting new avenues for investors to explore.
Strategic Buying at the Market's Bottom:
Savills encourages investors to consider strategic buying in 2024, especially in commercial and residential spaces. Opportunities may arise where capital values have over-corrected, or rental growth prospects show acceleration.
Election Impact:
Despite the anticipated election in 2024, Savills notes that historical trends suggest a temporary dip in transactional activity, followed by a recovery over the next six months. Investors are urged to recognize the potential for a rebound post-election.
Infrastructure Investments in Focus:
Savills underscores the enduring rationale for land and property investments, particularly for those seeking infrastructure-type assets with predictable income streams. Rising interest in food security and carbon reduction further boosts these segments.
Clear Path Ahead:
Savills expresses confidence that 2024 and 2025 will mark the return to normalcy in the property market, presenting investors with a clear path forward.
Embrace the optimism, seize the opportunities, and stay tuned for a prosperous journey in the UK property market in 2024!