As we welcome 2024, Natasha and Steve Wallis explore their predictions for the commercial property landscape. Here are the key insights and forecasts:
Economic Climate and Base Rate:
- Reflecting on 2023, the base rate started at 3.5% and reached 5.25% by August, aligning with Natasha’s earlier prediction of 6%.
- Advice from the previous year to fix mortgage rates proved valuable for those who took the opportunity.
- Economic challenges persisted, impacting consumers’ ability to pay for essentials, leading to increased food bank usage.
- Zombie companies, reliant on cheap COVID-era money, faced difficulties refinancing, affecting overall business stability.
Commercial Property Prices:
- Despite outward appearances, commercial property prices experienced a stall, allowing for negotiation and achieving discounts beneath asking prices.
- Multilevel properties gained traction as members explored innovative strategies within and outside traditional structures.
2024 Predictions:
- Economic Stability: Predictions for 2024’s economic outlook remain uncertain, with factors like upcoming elections and delayed repercussions from expiring fixed-term mortgages influencing the market.
- Base Rate: Anticipation that the base rate will likely stay within the 4-6% range unless unforeseen events occur.
- Potential Market Shift: A potential shift in consumer behavior as repercussions from two-year fixed-term mortgages and an upcoming election play out.
- The Role of Syndicates: Foreseeing a rise in investment syndicates as individuals recognize the benefits of collaboration and less crowded investment areas.
FCA Changes:
- Notable changes in high net worth and sophisticated investor rules, requiring higher qualifications for both categories.
- The impact of these changes may lead to a surge in syndicate formations among investors.
Inflation and Sustainability:
- Discussion on the validity of reported inflation rates and the potential financial impact of sustainability measures in commercial property.
- Exploration of government initiatives and potential financial gains associated with sustainable buildings.
AI and Future Trends:
- Embracing the increasing prominence of AI in daily life and business operations.
- Acknowledging the importance of adapting and staying informed about AI advancements for personal and professional growth.
Political Speculation:
- An unexpected prediction involving Nigel Farage potentially becoming the leader of the Conservative Party, with potential repercussions on housing policies.
Tenant Take-up and Adaptability:
- Encouraging adaptability in commercial property use, focusing on creative approaches to maximize space utilization.
- Dispelling the notion that tenant take-up will slow down, emphasizing the need for innovative thinking and embracing change.
Concluding Thoughts:
- A call for audience participation in sharing their 2024 predictions.
- A reminder that the insights provided are speculative and should not be the sole basis for investment decisions.
As we step into the new year, these predictions serve as a conversation starter, and only time will reveal the accuracy of these crystal ball insights.
PS If you didn’t catch our podcast last week you can listen to it here.
