Looking back: The hits and misses of 2024’s property market predictions

There are two things you’re bound to see this time of year, new year’s resolutions and prediction posting for the year ahead, be that personal or professional. Looking forward is always a good guessing game, but we seldom take a moment for that all important, but perhaps less exciting, retrospective glance upon our predictions from the year before.

With the curtain now drawn on 2024, it’s actually now the perfect time to assess just quite how the past year in the property market has fared with forecasts. Let’s jump right in and see how spot-on, or wide of the mark, some of those predictions were.

Taking an interest in inflation

Prediction:

Interest rates and inflation were forecasted to be the key economic drivers impacting affordability

Reality:

While not nearly as bad as the 11.1% peak we saw in October 2022, inflation remained a hot topic of conversation right up until its eventual retreat to around 2% by the end of 2024.

In fact, the Bank of England maintained fairly elevated interest rates for most of 2024, holding steady at 5.25% for several months before being cut to 5% in August and 4.75% in November - a modest reprieve for borrowers.

These impacts on affordability certainly still seem to be creating bumps in the road, especially for first-time buyers. Although interest rates had fallen by the end of the year, high property prices were still taking the fuel out of the tank when it came to first time buyers' budgets. Reports suggested that first-time buyer activity was down (outside of London), with many waiting for better market conditions to make a purchase.

Secondary cities in the spotlight

Prediction:

With the rise of hybrid work and escalating urban living costs, secondary cities were predicted to experience a surge in property demand and investment in 2024.

Reality:

This Covid-catalytic trend saw no sign of abating as migration patterns continued their suburban shift. With remote work no longer tying workers to the heart of the capital, popular commuter cities including Cambridge, Peterborough, and Milton Keynes experienced increased demand, despite the noticeably longer commute, becoming some of the fastest growing in 2024.

Interestingly, the same can be said for closer to the capital too, with infrastructure development attracting emerging markets. Crossrail, despite its past controversy, has facilitated more convenient commutability, and made towns just perched on on the outskirts of the capital (such as Shenfield, Romford and Slough) a destination for professionals hybrid-working in London. Crossrail has also spurred developments around stations on the line, attracting new businesses, retail options, and cultural spaces, further enhancing their appeal to both residents and investors.

A rental market on red alert

Prediction:

The rental market was expected to face affordability challenges in 2024, with rising rents potentially leading to increased government intervention.

Reality:

As demand continued to outstrip the shrinking number of homes to rent, rental prices reached record highs in 2024. By November, we saw average rents increase by 9.3% annually to translate to £1,362 a month in England, by 8% to reach £772 a month in Wales and a 6.5% rise to £980 a month for renters in Scotland. It may not come as a surprise that London saw the biggest increases in the UK, with rents at 11.6% higher than in 2023 – the highest rise on record – culminating in an average of £2,206 picking the pockets of renters per month.

This highlights the urgent need for government intervention to address the underlying issues in the rental market, and while proposals for incentivising new rental properties or rent caps had been touted in 2024, they are yet to become a reality. Without such measures, the pressure on renters is likely to continue, with rising costs and limited housing options becoming the norm for many across the UK.

A year of transformation for proptech innovations

Prediction:

Advancements in artificial intelligence were anticipated to transform property management and transactions.

Reality:

A year doesn’t go by without someone claiming that this year is going to be “the year” for AI in proptech, and 2024 was no different.

AI undoubtedly continued to be the hottest of topics, dominating social media content. With curiosity for chatgpt and other AI tools turning into a more regular go-to problem solving solution (not always with success) naturally thoughts turned to how AI-powered proptechs were going to transform the property market.

On the one hand AI is changing the way we understand and navigate the property market. With its ability to crunch vast amounts of data, AI is unlocking new insights into property valuations, market trends, and buyer behaviour. Moreover, AI-powered chatbots are redefining customer service, providing instantaneous and personalised assistance to clients. However, has it been the transformative revolution we were expecting at the start of 2024? Maybe not just yet.

2024 wrapped

As we round off these reflections, it's clear that while some property market predictions came to pass as expected, others didn’t quite pan out as some may have hoped. The interplay between economic conditions, technological advancements, and regulatory changes shaped the year's property landscape in complex ways that weren’t all expected. As we move forward, understanding these dynamics will be crucial for navigating future market trends. Let’s see what 2025 will hold for us.

Looking for more? Check out our predictions for 2025 blog.