Hello World! Welcome Friends! It is a common practice among estimators to gauge the development of the property market in the future through projections. These approximations are often incredibly close to how the market does turn out a few years later.
Predicting market performance is by no means an easy task. This is especially in the light of a global pandemic and the teetering possibilities of widespread conflicts. There are too many variables that might get in the way of a projection reaching close to fruition. It takes years of expertise in recognizing which way the market is going. Agencies that do put out data make sure they have tons of research behind each projection!
Various agencies have put out their predictions for the factors which will affect the property market in the next five years. In this article, we will explore four of these factors, which you must keep in mind if you are a buyer or a seller of property.
Are you someone looking to let, sell or buy property in the United Kingdom? Then you can opt for estate agents in the UK to book a free no-obligation sales and lettings valuation to help you out with your property deals.
The things to look for in the UK property market in the next five years are as follows.
The Emergence of Smaller Cities As Desirable Property Locations
With each passing generation, a new location takes over the market. This is due to the increase in living costs and property prices, and of course, the preferences of buyers. There is constant leaning towards smaller, more economically and ecologically viable properties these days.
Property investment is always a major milestone. One must choose the best possible areas and locations to invest their money. London is clearly amongst the biggest metropolises not just in Britain, but in the world! But when it comes to property, regional markets have taken over due to a multitude of factors.
Various locations like Liverpool, Glasgow, Sheffield, Bracknell, Edinburgh, Leeds, Newcastle, Nottingham, Manchester, and Birmingham are rising in importance.
The major metrics are used to measure how good these places are for investment. This includes property prices, demographics, rental yields, population, and Buy-to-Let opportunities, along with the road and transport amenities.
Also, in the light of the coronavirus pandemic, many people are turning away from large, heavily populated metropolises. Instead, they are looking towards more open yet convenient locations to live in. According to estimates of Savills, the focus will shift towards commuter belts and outskirts. This is due to the more hybrid model of how workplaces function.
Many developmental projects, especially relating to transport, are another factor to look out for. They can increase property prices in their vicinity.
Financial Factors Like Property Prices, Interest and Mortgage Rates
House prices in the United Kingdom are set to rise by an average of 13.1%, and in some places like Liverpool, the hike can be up to 28%. North of England and Scotland will see the most prominent boom in prices. This is due to a stark improvement in the business and economic situation in these areas.
According to the House Price Index from Halifax, there was a growth in the annual UK house price of 10.8% in February 2022. This also translates to a rise in house prices by £44,138 since February 2020.
However, the price rise seen from 2020 to 2022 was unprecedented and extraordinary. This situation is set to slow down in the upcoming years according to estimates.
The price rise would consequently affect the interest and mortgage rates as well. However, they will rise at a rate slow enough not to put “household finances under undue stress”.
There are also proposals from the Bank of England to relax affordability stress test rules. This will make borrowing easier. Thus, it is also a factor one must look out for.
Environmental Factors
In the present times, there is a higher level of environmental awareness. Youngsters are investing more in eco-friendly and environmentally conscious options. This also translates into an emerging demand for zero-carbon homes, which is a real game-changer.
The COP26 in Scotland and government incentives to modern zero-carbon homes are another factor to look out for, especially if you are a potential buyer.
For sellers, this means that ecologically refurbishing your property is a good option to increase the chances of finding a better deal. This is so that it gets a better score in the Energy Performance Certificate from a DEA. This can considerably widen the pool of prospective buyers.
Changes In Housing Policies
There are many housing and housing finance reforms that are in the legislative pipeline at the moment. Most of these are slated to come into effect within the next five years. Of course, this will incidentally affect different facets of real estate.
The Help To Buy Scheme of the British government, which was enforced in 2013, will come to an end in 2022. Savills estimates that a “larger and more diverse build-to-rent sector” will fill the void left by the scheme. This means that the upcoming five years will be prospectively fruitful for property developers, particularly those developing purpose-built rental properties.
On An Ending Note
If you are a potential buyer or a seller and are looking to make a major property transaction in the upcoming five years, this article provides some of the major tenets you must focus on. From the financial to the economic, all of these will definitely impact the real estate market.
With any financial and property transactions, there come many things which you need to legally sort out. We advise you to consult professionals with experience in the property market and make good use of their recommendations. A good real estate agent will suggest houses for you from the cream-of-the-crop, thus, helping you find your ideal home!
Thus, do consider hiring a good legal advisor and property agency to be able to navigate your property transactions smoothly and efficiently!
Click the links below for any posts you have missed:
Properly Display and Promote Your Brand
Signs That Your Kitchen Needs a Renovation
Causes of Motor Vehicle Accidents
I’d love for you to join my email list! You’ll receive a notification straight to your inbox which will include links to my latest home project posts! Simply enter your address below.
Thanks for stopping by! Have a wonderful day/night depending on where you are in the world! Go with God and remember to be kind to one another!
Toodles,
[…] Things to Measure In UK Property Market […]