Jan 5

Why Investors Are Purchasing Buy-to-Let Property In 2024

Today's blog post comes from Joanna Everett - Associate Mortgage & Protection Broker here at Fowler Smith Mortgages & Protection:

"After a turbulent year in the market, the climbing Bank of England base rate, declining numbers of property transactions and falling house prices, some may be glad to see the back of 2023. As we enter a new year, we can look at the opportunities ahead for those wanting to invest in property to build their nest egg and fund their future.

Buy-to-let investors are eyeing up the property market in 2024 due to a combination of factors that present promising investment opportunities. The potential for steady rental income remains a driving force, as demand for housing continues to outstrip supply in various regions. This is particularly beneficial in times of economic uncertainty. Additionally, the anticipation of favourable market conditions, such as stabilising interest rates, encourages investors to capitalise on potential returns. Off the back of the base rate being held again at 5.25% in at the end of 2023, lenders are gaining the confidence to reduce their rates and we have seen sub-5% rates coming into the market on both residential and the buy-to-let front. This further encourages speculation that sub-4% rates may be available to secure in 2024.

There is the potential for property value to appreciate over the long-term, to allow investors to cash in profits upon sale in the future. In the short-term, the current market presents an opportunity to benefit from cheaper property, more stock and increasing rental demand. Economic stability and attractive prospects created by new-build developers infiltrating up and coming areas and those in need of regeneration, are influencing investors to target properties in areas with high tenant demand. This is also supported by lenders emerging into this space and lending on investor-led sites and increased finance options becoming available from the likes of bridging* and niche lenders.

Overall, the prospect of steady rental yields, a resilient and consistently performing asset and the expectation of property value growth make 2024 an attractive year for buy-to-let investors."