For most, entering into the property market in 2024 seems like a daunting task. With inflation rates rising, and landlords showing hesitance to invest, the landscape appears challenging. However, there are compelling reasons to consider property investment this year. Our expert in the property investment market, Adam Toller, gives insight into the benefits of investing in property this year.
A buyer’s haven
Adam Toller, the owner of a third-generation property management company, states that the current property market is distinctly a buyers’ market, not a sellers’ one. This shift indicates a thriving environment for landlords looking to invest. Property values are expected to decrease by approximately 4% annually, presenting unique opportunities for strategic investments.
Interest rate forecasts and investment implications
A key factor shaping the 2024 property market is the anticipated trajectory of interest rates. Savills, a prominent property company, forecasts a significant shift in the Bank of England’s monetary policy. They expect the central bank to initiate interest rate cuts in the second half of 2024, reducing its base rate to 4.75% by the year’s end, down from the current 5.25%. This trend is projected to continue, with rates potentially falling to 1.75% by 2027.
Expert insight: long-term strategy is key
Adam emphasises the importance of a long-term investment perspective. His expertise underscores the potential for long-term gains, despite short-term market fluctuations. He insists that investing in property should never be a short-term goal to reach and that biting the bullet will allow your property portfolio to reap the rewards in the future.
Opportunities for cash buyers
For cash buyers, Adam states that the current market offers even more advantages. Without the burden of high interest rates, they can directly expand their property portfolios without having to pay money above and beyond what they already have. However, those relying on borrowing might see a reduced return on investment, at least in the short term.
Further benefits to investing
With a potential increase in demand for rental properties, investors can benefit from steady rental income. This is particularly advantageous in a buyers’ market where purchase prices are lower but rental demand remains strong.
Additionally, with the forecasted reduction in interest rates by the Bank of England, mortgage costs could become more affordable. This makes borrowing to invest in property more attractive, especially for first-time investors or those looking to expand their portfolios.
Property investment can also offer various tax deductions, including mortgage interest, property tax, operating expenses, and depreciation. These benefits can significantly improve the overall return on investment. Further to this, real estate often serves as a hedge against inflation. As inflation rises, so do property values and rental incomes, protecting the purchasing power of your investment.
Professional guidance on navigating the property investment market
The property investment landscape is a complex and very dynamic place. For those seeking to navigate this market, professional advice can be invaluable. Toller Property Group offers expert guidance and insights into property management and investment strategies, tailored to the evolving market conditions of 2024.