A Year in Review: Key Events that Defined the Property Market in 2024

Arguably, 2024 was a milestone year for property investors. There were the obvious news stories which continue to completely upend how we all live, work, and invest. Although, there were some notable headlines which may not have registered, or have slipped under the radar. This is a shame, as it’s these ones we should really be celebrating.

The second half of the year was filled with uncertainty. But the dust has settled, and we’ve had time to adjust. As we head towards 2025, it’s worth looking back at how far we’ve come.

Remember though, this list is purely subjective. The following are just what we believe to be the most important highlights of the year – for good or bad. Undoubtedly, we may have missed a few. But we’re always happy to jump on a call and discuss any bits of news that may impact brokers, and their borrowers.

The general election

Few, if any, events came close to having the impact the general election did. For obvious reasons, everything, economically, changed overnight.

General elections bring with them plenty of chaos when they come around, regardless of who wins. Manifestos are pushed, endless debates are had, and the wider population awaits the result with bated breath.

What made this general election so notable though, was that Labour[1] won for the first time in nearly 15 years. More than this though, they won by a landslide.

Labour gained 211 seats[2], taking its total to 412. The Tories saw their number fall to 121. With such a big majority, Labour will face little resistance to getting their plans implemented. Which brings us to our next big news item…

Labour’s budget

Many were dreading what Labour would do with their first budget since 2010, especially with a “surprise[3]” £22bn black hole to fill. And it’s true, some of the announcements made will make it harder for some people and businesses to progress. But, some of the worst fears didn’t come to pass.

Rachel Reeves eventually announced £40bn[4] worth of tax rises – which no one wants. Chiefly, this will be achieved via NI increases, inheritance tax tweaks, and other levy changes[5].

Landlords and property investors pretty much avoided the worst-case scenarios. For instance, many feared the Chancellor would be tempted to align CGT rates with income tax in the run up to the budget. In the end though, this didn’t happen and property investors were actually spared from higher costs[6].

Stamp duty was raised for additional homes, but only by 2%[7]. It was also revealed that the income tax threshold freeze would come to an end in the next few years. This, in theory, could lead to lower tax bills for landlords[8].

We’ve barely scratched the surface of the budget here, and we’re not ignoring the challenges that linger from it. But now, we at least know where we stand, and how we can react. With the vast majority (84%[9]) of landlords planning to stay in the BTL market following the budget, it appears borrowers are more optimistic than many would expect.

The Renters’ Rights Bill

Many landlords may be more concerned with The Renters’ Rights Bill’s impact, over that of the budget’s. The spiritual successor to the Renters Reform Bill, Labour quickly got to work in trying to push this one through the system.

A mere month or so after it was first introduced, the Renters’ Rights Bill received it’s second reading in parliament[10], and is currently at the report stage in the House of Commons[11]. The bill may become law by summer 2025[12], and it could dramatically alter the property investment scene.

Looking ahead, we could expect the abolition of section 21 evictions, limits on rent increases, anti-pet/family/benefit discrimination efforts, the introduction of Awaab’s Law in the private sector, and more.

The aim with this bill is to tidy up the PRS, and create a fairer market for all participants. Time will tell if this proves to be the case but what’s known for sure now, is that BTL investors need to be prepared.

Base rate reductions

Now we can turn our attention to the truly good news! After two years or so of consistent rises, the base rate finally dropped from 5.25%, to 5% in August[13]. It continued on this trajectory too, eventually falling to 4.75% by November.

It will take some time for us all to fully feel the effects of this. Mortgage costs are still stubbornly high[14] across the mainstream market, despite the recent cuts. Still, hopefully as we move into 2025, the base rate will continue to drop and eventually, optimism will become more widespread.

Inflation is obviously the key determining factor here and thankfully, our costs are going in the right direction. Despite some recent turbulence, inflation has been hovering around the 2% target consistently over the last few months. Let us hope we can all keep on economic track in 2025.

Record highs – despite everything

Less of a singular highlight, more of a collective of positive high points. Since at least 2022 – a-la the mini-budget[15] – we’ve all been bombarded with negativity in the press. Apparently, there is no hope in the property market, or wider economy.

This year hasn’t been short of this kind of rhetoric. But what’s missed is how many “record highs” we’ve hit despite all our woes. Gross BTL yields reached a record high of 7.2% in October, according to Hamptons[16]. Halifax[17] recorded that the average home price hit £293,999 in October, the highest figure ever recorded. Nationwide[18] reported that house prices saw their highest annual growth since 2022 in September.

Then there’s our industry. The latest data from the Bridging & Development Lenders Association (BDLA) showed that bridging completions grew to a new record of £1.79bn in Q3. This helped to drive a 7.6% increase in the size of overall loan books, which have exceeded £9bn for the first time ever.

These are just some of the notable records we came across. Undoubtedly, there are countless others out there from the year which proved not everything was on fire.

As is the case with so many years, 2024 was a mixed bag. The same will likely be true of 2025 but as always, Market Financial Solutions will be here to support brokers and borrowers as they explore their options.