Our Expert Forum's hopes and fears for 2024

A glimmer of optimism for 2024 emerged among our experts when we asked for property professionals’ hopes and fears for the new year.

With elections both sides of the Atlantic and the likely continuation of major changes in the world of development, our expert panel offered a mix of realism and hope for improvements, both in the industry and the wider economy.

Jonny Denton, group sales & land manager for Darcliffe Homes, said: “As an optimist, I always see this time of year as a reason to start fresh by entering into January with high hopes.

“From a residential point of view, I feel the lack of housebuilders building/getting decisions through isn’t flooding the market with stock, which means there should be buyers out there for us all as long as the product is right.

“There is also a sense that interest rates will start to come down at a slow rate next year but, as long as we have stability and they move in the right direction, we should see buyers’ confidence return.

“It would be naïve of me to not raise some concerns ahead of 2024 with a General Election looming. I do fear that, ahead of the election, the already struggling planning system will grind to a complete halt with no decisions made until votes are settled.

“It is currently too easy to simply say ‘no’ to applications with no sensible feedback. I do feel it is about time to have planning and politics separated.

“My memory from the last election is everyone sat on their hands until it was over and then came out shopping again as soon as it was over.

“I expect history will repeat itself. However, for the homebuyers, there are some deals out there now which were not about over the last few years so, in theory, a far more sensible time to move and buy.

“The push for green will be high on the agenda for 2024, and rightly so, but either the Government will need to offer grants to cover the increased costs associated with Part L and Part O Building Regulations or land owners will need to adjust their expectations.

“If this doesn’t happen then we will continue to see builders sitting on their hands, managing their cash until the world is more certain.

“Commercially, we have been pleasantly surprised with activity at 2,000 sq ft and below, with a real flurry of activity in the last quarter.

“For affordable office space there has been an appetite to separate work from home and, as it stands, we are pretty much as fully let as we have ever been.

“Long may this continue and it does offer reason to remain optimistic.”

Will Nassau-Lake, head of development for Boyes Turner, set out his hopes and fear as follows:

“Hopes:

General improvement in global and national economic and political stability.
Continuing and sustainable reduction in inflation with a consequential reduction in interest rates.
Introduction of a pro-housing, pro-construction, pro-growth UK Government.
Introduction of a ‘help-to-buy’ type scheme and/or further SDLT reductions/reliefs for first time buyers and those downsizing.
Removal/clawback of SDLT at the higher residential rates for acquisition of residential property intended for redevelopment.
Introduction of further measures to promote the construction of sustainable, design-led high quality new homes from the SME house building sector.
Increased funding for a broken planning system that puts delivery of housing schemes at its core.
Improvement of Land Registry registration times.

“Fears: we’d rather remain positive!”

Richard Binning, head of Savills Oxford, said: “Despite the political, social and economic challenges that have impacted the global market, Oxford continues to thrive.

“There is a feeling that interest rates have ‘topped out’ which is prompting more investment trade. However, we know that markets dislike uncertainty and so, with an election on the horizon, we might expect any momentum gained to put a pause on activity when the time comes. In the main, though, I am relatively positive about the year in prospect.”

John Russell, director of Motion, said: “2023 has been a mixed one for everyone in the industry, plagued by uncertainty from constant changes in Ministers, local election results and delays in the planning system generally.

“But despite this, 2024 has a confident looking start with a number of large scale and interesting projects across the area.

“No doubt changes will occur in 2024, not least politically, but we’re grateful to all our friends and contacts in the industry for their unfaltering commitment to gaining planning permission with all these challenges.

“We wish everyone a relaxing and healthy festive break.”

Tom Fraser, head of office at Savills Cambridge and a director in the development team, said: “I think it’s clear that it’s been a challenging year – the rise in interest rates and slowdown in the housing market has led to less activity.

“Major housebuilders have, on the whole, been slightly more cautious and largely focused on building out their existing pipelines.

“On the other hand, there have been some volume housebuilders who have been bidding competitively to secure land.

“Likewise, SMEs and regional housebuilders have taken advantage of a less competitive market to secure land and maintain their pipelines, with some looking beyond their local patch.

“So there have been deals to be made – particularly on low risk sites where planning permission is already agreed in areas where there is strong demand for homes and a good level of infrastructure already in place.

“Consequently, I think we can look forward to 2024 with cautious optimism. Interest rates have already begun to stabilise and new build sales in November were the highest Savills has seen all year.

“We have also enjoyed working with Peter Freeman and Homes England as part of the Government’s Cambridge Delivery Group – so there are some exciting times ahead.

“Of course, it remains to be seen what effect any potential General Election could have on the property market, and land values may continue to be a little subdued – particularly where alternative tenures such as Build-to-Rent and affordable housing are being planned as these often need to be at a discount to make the scheme viable.

“But once interest rates start to drop, which we expect to see before the end of the year, then both confidence and competition for sites should start to increase.”

Colin Brown, head of planning & development for Carter Jonas, said: “Demand for homes will continue to be impacted by a fall in mortgage availability and affordability, exacerbated by the ending of the Help To Buy scheme, with housebuilders also feeling the ongoing effects of labour shortages and build cost inflation.

“Accelerating the rate of housebuilding will not be easy for whoever wins the election, and 2024 looks set to be a challenging year for housebuilders against the continuing subdued economic outlook.

“The Government’s target to build 300,000 homes per annum in England was downgraded to ‘advisory’, and whilst it is still the stated aim to achieve this figure, no timescale is attached.

“Meanwhile, fewer than 200,000 net additional homes per annum were actually delivered over the last decade, meaning that, year on year, the deficit in delivery is growing.

“It is likely that both main political parties will maintain a focus on achieving the 300,000 per annum figure in their manifestos. Indeed, Labour have confirmed they will reinstate this figure as a mandatory target, in addition to updating planning laws to give local authorities a greater say in delivery.

“The big debate looks likely to be around land value capture (a mechanism by which a greater proportion of the uplift in land value arising from planning consent can be captured for public benefit such as infrastructure and affordable housing) and the Green Belt/Grey Belt.”

Charles Elsmore-Wickens, head of the Savills residential office in Oxford, said: “2023 has been a rollercoaster of a year in the residential property sector and, while I anticipate a relatively challenging market next year, I do believe we have passed ‘peak pessimism’.

“Mortgage rates have been slowly but surely coming down and, while the base rate is not expected to change until the end of next year, five-year fixed mortgages are already looking more attractive than they were.

“Sentiment is likely to be stronger and this, coupled with more realistic pricing from sellers, may well result in a more active market in 2024.”

Jonathan Headland, urban design director for WWA Studios, said: “2023 has been yet another year for uncertainty and the unexpected.

“Top of our wish list for the year ahead is a return to some level of certainty, as this in my view is the biggest thing holding back not only our sector but the economy generally.

“We are clearly eagerly awaiting the release of the revised NPPF and similarly look forward to whatever Mr Gove has in store for us over the coming year….

“As we begin to look further ahead to the next General Election it will be interesting to see the details of party manifestos on all things growth and a return to proper plan making.

“More than anything else, let’s hope we don’t end up with more of the same. Here’s to a more peaceful and predictable 2024.”

Karen Charles, executive director of Boyer, said: “2024 will inevitably be dominated by the forthcoming General Election.

“If the politics of the previous year is a reliable indication of the year ahead, I anticipate that we may see housing as one of the key battlegrounds: Labour determined to bring about more development, more affordable housing, more new towns and potentially more Green (or Grey) Belt release, with the Conservatives, by contrast, delaying doing so to avoid alienating core voters in less urban areas.

“The fact that housing and planning were notably absent from the Government’s last party conference is a strong indication that bold measures aimed at boosting housing are not a political priority.

“But Labour clearly holds the opposite view. And as the General Election approaches and the housing shortage intensifies, these issues should remain high on the agenda.

“That said, the forthcoming implementation of a minimum of 10 per cent biodiversity net gain on new developments is positive.

“Protecting biodiversity is universally appreciated and the initiative is an opportunity for quality new developments.

“The problem is when this has a detrimental impact on viability. I am confident that solutions and opportunities for mitigation can be found, but I am concerned that they are not always yet in place.”

Image: Terry Ott from Washington, DC Metro Area, United States of America, CC BY 2.0 <https://creativecommons.org/licenses/by/2.0>, via Wikimedia Commons

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