Key trends anticipated for the UK property market
Predicting the future of the UK property market is challenging and equally difficult due to changing global economic scenarios. However, real estate experts have predicted a few top factors that can influence this market in the next few years to come. Major economic factors such as increasing inflation globally and higher interest rates are expected to have the biggest impact in the UK on the next few years to come.
One of the major predictions is that in the next few years, UK house prices will increase by an average of 13.1%. This trend will prevail in the mainstream market and major cities in the country. The most elevated rises will be seen in the north of England, where the housing market and economic market are booming.
Interest rates and inflation impact the UK housing market…
According to Berkshire Hathaway HomeService 2022 EMEA (Europe, Middle East and Africa) Report, almost 85 per cent of the UK real estate experts predict inflation to have a major impact on the UK realty market, with a notable one in three anticipating a significant impact.
Several countries were surveyed but this figure is above the average in the UK, which came out at 78%, and second only to Portugal which topped the table at 88% of real estate professionals who believe there will be an impact.
Also, there are real estate experts, who believe that increased interest rates will have repercussions on the real estate sector, which can slow down the realty market – as first-time property buyers find it hard to get their hands on affordable mortgage deals. A spike in interest rates has recently been observed in the UK property market, which can affect buying behaviour . According to the Office for National Statistics (ONS), the findings come as the UK Consumer Prices Index (CPI) rose by 5.5% in the 12 months to January 2022, up from 5.4% in December 2021.
When it comes to prime properties in UK, 72% of experts believe that the rate of inflation will have an impact and 73% expect rising interest rates to have an impact, above the average of surveyed countries which put the figure at 68%.
Location matters the most…
Pandemic has disrupted day-to-day life and it has certainly affected the people’s choices to buy properties. Both tenants and property buyers are more likely to have bigger homes with dedicated workspace and outdoor space. The demand for bigger homes located on desirable commuter belts will be in focus as hybrid working patterns have been established in the past two years.
Though the distance to the office, school and other key destinations matter but the quality of the commute will remain more important. The communities designed around the major transport infrastructure will remain in higher demand for family houses.
Big amendments for real estate developers
According to Savills, “The mini housing boom has left housebuilders with healthy balance sheets and capital to deploy, resulting in short-term upwards pressure on land values. But the outlook is less clear with reduced price growth expectations and high build cost inflation.”
The “Help To Buy” scheme looks to be wrapped up in 2022, which will create a gap as it has highlighted house-building since 2013. It will be filled by a “larger and more diverse build-to-rent sector, which seems to be more secure for developers.”
Martin Bikhit, Managing Director of Berkshire Hathaway HomeServices Kay & Co, stated, “Whilst economic factors will undoubtedly play a key role in shaping the UK real estate market over the coming years, the sector continues to be confident and buoyant.
“This year we are seeing a very strong demand-led market due to the lockdown hangover. We must also recognise the market has transformed. In just a few years, we have entered a new era for real estate, with buyers embracing flexible lifestyles, and seeking homes fit for homeworking and with outdoor space. This desire to get a property which fits new ways of living and working could see the economic factor lessen.”
If you are looking to buy or rent a house in UK, this is the high time to contact the UK real estate experts at Copperstones at +44 203 888 5555 or write us at enquiries(at)copperstones(dotted)com. One of our team members will get back to you with the best available options that can match your demand and fit into your budget as well.
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