Jaxon Stevens, sales director at Tuscan Capital

Why it's right to be optimistic about the rest of 2024




One of the most encouraging aspects of the market at the moment is the clear feeling of optimism.

One of the most encouraging aspects of the market at the moment is the clear feeling of optimism.

There has been no shortage of challenges in recent years, and yet currently there is a distinct air of positivity around prospects for the property sector, which I think is well-founded.

Part of this is down to the situation with inflation. Inflation has undoubtedly been a huge factor in the health of not only of the general economy but particularly the property market.

While it has certainly been stubborn in coming down from its peak of 11% in 2022, there has been real positive movement on this front.

The latest figures from the Office for National Statistics show the consumer price index measurement of inflation dropped once more to 3.4% in February, its lowest level since September 2021.

Inflation, and how the Bank of England is expected to tackle it, has had a tangible impact on swap rates and therefore the pricing of mortgages and property loans. 
As inflation remained high, the bank elected to repeatedly hike bank base rate, feeding into higher-priced products.

Inflation has seemingly peaked, with most of the MPC leaning away from any further increases to bank base rate, has fed into lower swap rates this year, and therefore cheaper products.

It has acted as a foundation for the improving level of confidence across the market, setting the stage for greater activity levels over the rest of 2024 and beyond.

The hunt for stability

There has been fluctuation however — we saw, when inflation bumped up slightly earlier this year, that it was accompanied by not only rising swap rates but also the combination of rate increases and product withdrawals.

The desire for stability has rarely been greater.

Thankfully, the prospects on this front are extremely positive, in the budget, Jeremy Hunt, the Chancellor of the Exchequer, revealed the OBR’s assessment that inflation is now on track to hit the Bank of England’s 2% target within just a couple of months.


Such a drop would increase expectations of base rate cuts in the near future, hopefully driving down swap rates and meaning more competitive rates.

What’s more, with economists forecasting multiple rate reductions over the next few years, these rates may be around for more prolonged periods, further improving the levels of confidence around borrowing to invest in property.

What lies ahead?

Underpinning all of this is the housing market itself, the fundamental appeal of property to investors has not changed — we simply do not have enough homes to meet the level of demand, even with some buyers having opted for a ‘wait and see’ approach in recent months.

This imbalance means investors have a great opportunity to profit from property, whether they plan to hold it on an ongoing basis as a BTL investment or to sell following refurbishment.

The demand for refurbishment deals has been so strong that Tuscan recently launched a new refurbishment finance facility, where we handle the entire process, including the drawdown stage, in-house.

Finding solutions

It doesn’t pay, however, to get too carried away, recent years have demonstrated the unexpected can have a significant impact on the course of events, so it pays to be prepared for things proceeding differently.

We have a general election this year which has the potential to shift the market in a number of different directions, even in the build up to it.

However, it’s certainly true that the sense of optimism seen across the market is well-founded.

Prospects for property investment are excellent, and with products likely to become more competitively-priced, advisers are likely to see greater levels of interest from their clients.

As a result, it’s crucial for lenders to raise our game — that means delivering more than just an attractive headline rate, but the service to match, across the entire course of the loan.

Advisers have long memories and so always favour those funders with a long track record of delivering on their promises, matching competitive rates with the highest levels of customer service.

Leave a comment