We can now look back on 2024 and assess it in its entirety. As is the case with any year, there were ups and downs in 2024, for both the wider economy, and the property market. Although, at times, it felt as though last year was a particularly brutal one for property investors and landlords.
Many challenges emerged in the market in 2024, and we believe most of them resulted from our struggle to get on top of our stubborn economic problems. Specifically, stalling on inflation was disappointing. There seems to be no easy way forward here.
The first half of the year showed potential, as the CPI continued downwards from its 2023 highs. We finally hit our 2% target in May, and optimism – all too briefly – returned. But, in H2, we struggled to stick to 2%, and the fear may be there that inflation could runaway from us once again. Costs are still high for many and by failing to fully get on top of inflation, confidence in the market will likely be dented.
Although, all of 2024’s challenges led to a solid year for the bespoke lending market. As borrowers looked for solutions for their investment woes, it seems they turned to bridging providers for salvation.
Throughout the year, bridging loan books reached record levels, according to the Association of Short Term Lenders. Also, despite inflation’s trickiness, we were thrilled to see the Bank of England feel confident enough to finally cut the base rate in 2024. We even finished the year with a hopeful forecast of more rate cuts to come.
Hopefully, 2025 will be a turnaround year for the property market. There is still plenty of demand for rental properties in the UK, yields may be surprisingly stable this year, and certain commercial assets may rebound. Although, we must remember the challenges that sit ahead of us. The Renters’ Rights Bill, Awaab’s Law, EPC targets, and more will all come into focus this year.
Fortunately, all of this will likely push demand for bespoke lending products that are designed from the ground up to find solutions for these types of issues. At Market Financial Solutions, we will be there for what borrowers know is coming, as well as those nasty economic surprises that may catch them off guard.
If borrowers need tips and/or encouragement for the year ahead, we’d say:
- While looking for short-term financial solutions, keep your long-term goals in mind
- Communicate with your lender and partners as much as possible to get ahead of any issues
- Do not take dire financial news too much to heart, keep an eye out for positive headlines and opportunities