Paresh Raja, CEO at MFS

Political priorities in 2024 and how they'll impact property investors

As we shift focus from the past year to the upcoming year, the prospect of a general election looms large, with Rishi Sunak suggesting it's likely to occur in the second half of 2024.

The battlegrounds are already taking shape, with the Prime Minister emphasizing tax cuts and the opposition highlighting its green credentials.

For property investors, the primary concern will likely revolve around how a general election will influence the housing market, taking precedence over other economic considerations.

Analysis from Middleton Advisors implies that the property market may maintain a surprising level of stability; historical data indicates that house prices in the UK have consistently grown since 1952, suggesting little evidence of significant fluctuations under different political parties.

However, persistent imbalances in supply and demand may continue to plague the housing market.

Over the past decade, only 1.3 million homes have been built in England, falling far short of the three million constructed in the 1960s, as reported by Shelter.

Despite promises from both the Conservatives and Labour to address this issue, the public/social sector's outlook remains uncertain, a significant portion of a £4.2bn state fund, initiated in 2017 to unlock new English homes, has gone unspent, and housing associations have cut their 2024 planned spend on new affordable homes.

The ongoing mismatch between supply and demand is likely to be a critical issue in 2024, as Halifax predicts that, in 2024, house prices could drop between – 2% and -4%, requiring the private sector to contribute more to the housing market — fortunately, the outlook for increased private-sector involvement appears promising.

2024 may be a year of optimism 

Amidst these challenges, 2024 holds promise and optimism for property investors, developers, landlords, and more.

Confidence is high, and construction projects could rebound (page 22) after a challenging 2023 — anticipated increases in activity from housebuilders, retail developers, and the leisure industries are likely.

Recent market pessimism may drive auction demand in 2024, and BTL landlords remain confident about what the next year has in store, according to The Mortgage Lenders’ latest data.

At the end of 2023, IMLA data also found that despite the 80% expected rise in borrowing costs, 53% of landlords plan to expand their portfolios, this positivity sets the stage for various investors to turn to bespoke lenders for support, given the challenges they've faced in navigating mainstream options in recent years, as discussed in one of our quarterly research report.

At MFS, we are prepared to accommodate diverse investment strategies and contribute to the recovery and growth of the property market in 2024.

Our range of financial solutions includes development exit finance, auction loans with rapid issuance, and specialist BTL mortgages tailored for expanding landlords, ensuring speed and flexibility in the rental market.

As we look forward to an active and prosperous 2024, we are committed to playing our part in helping the property market recover and grow.

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