Last year’s diminished investment levels were proof of widespread uncertainty in the property market owing to both economic and geopolitical factors. However, despite the excitement of a snap election, quiet confidence is beginning to settle in; interest rates are predicted to drop to 4.5% by the end of the year, many in the industry are now suggesting that the market has bottomed out and sentiment is optimistic that we are not far away from an upward swing. 2023 saw a deal volume well below the 10-year average of £53.4bn, but by December of last year, green shoots were emerging.

With confidence low during the bulk of 2023, competition among investors was minimal. There was uncertainty around how assets should be priced and funds and property companies became increasingly hesitant or, owing to redemptions, were unable to invest. However, this left the market open for more liquid family offices to snap up prime assets they likely would not have had access to in a more sustained market.

The market reopens for trading
Recent figures demonstrate a growth trend with a 14% increase quarter-on-quarter in 2024. The £13.1bn traded in 2024 is still 12% below the corresponding 2023 level, and what’s clear is that the market is ripe for cash-rich parties to snap up assets before other investors come back to the table. As more and more parties take a seat, strength in numbers will continue to boost confidence and the market should propel itself.

Unfavourable market conditions throughout the past year made valuing properties even more challenging, squashing appetite. Sellers became more likely to hold onto assets, which led to a period of stagnation as buyers were reluctant to commit as they hoped for a fall in price further down the line. As transactions have increased in the first part of the year, however, the market has more guidelines for accurate pricing, and confidence is improving that we have hit the bottom of the market.