After the general election of the UK, there has been a clear rise in confidence when it comes to purchasing a property. Along with that, the decision of Britain leaving the EU on 31st January 2020, has led to the reduction in uncertainty regarding the future of the real estate market. According to the latest Rightmove House Price Index, there has been a 2.3 per cent increase in asking price for houses listed on the market between the 8th December 2019 to 11th January 2020. While it is not certain if this growth in real estate is a long-term trend or just a short term move to re-adjust the markets, here are the 7 real estate trends are sure to impact the real estate investments in the UK.
A slow but steady rise in prices
Since the financial crunch of 2008, for the first time in 2020, the prices of real estate in all the regions in the UK have gone up. According to JLL UK, there will be a 14 per cent increase in the real estate prices in the UK by 2024. Ask your estate agents in Claygate or the real estate agents in Bristol, they will all agree that there has been a slow and steady rise in the real estate market. This has a lot to do with the reduction of uncertainty in the real estate market since Brexit has gone through, as well as the decline of the wage and housing price disparity.
A rise in the number of first-time homeowners
With the UK government paying special emphasis to homeownership, it is predicted that the numbers of first-time homeowners are on the rise. Using government housing schemes like the Shared Ownership scheme and the Help to Buy plan, more first-time buyers are interested in purchasing real estate. However, it is more likely that these first-time buyers will prefer to buy property in the suburban areas as opposed to properties in prime locations, due to the difference in prices.
More Buy to Let properties
With a predicted increase in the number of people who will live in the UK by 2025, a whopping 2.5 million more than the current population, there are going to be more and more people looking to rent out properties. Hence, a lot of investors are expected to invest in real estate properties. With an influx of students who come to the UK to study as well as foreign nationals who look for job opportunities, buy to let properties will be in high demand. Plus, buy to let properties provide a high return on investment, which is basically every investor’s dream.
Increase in overseas buyers
After years of low real estate sales and falling housing prices, the asking price of prime properties in London is reaching its peak. After the recent elections, more and more overseas buyers will be interested in purchasing real estate in the UK. This has a lot to do with lower prices, especially when the foreign currency is compared to the pound. As the pound has weakened, overseas buyers and foreign investors are looking at the real estate market in the UK as a great deal.
New hotspots in the UK
There are quite a few hotspots in the UK where new housing projects are in the pipeline. As of now, Tower Hamlets, Newham, Ealing, Southwark, Barnet and Greenwich, as well as a few other former industrial lands are undergoing development to create new homes. Look out for property prices in these popular hotspots as they are going to be up for grabs as soon as they hit the real estate market.
The peak in luxury properties
With a 30 per cent fall in the sale price, a hike in stamp duty and an overall slowing down of the economy, luxury properties in prime locations took the biggest hit. However, the prices of these properties are finally picking up. With the weak pound, in comparison to other currencies, as well as the reduction in asking price, a lot of wealthy foreign investors are looking at luxury properties to find a good bargain. By 2024, Knight Frank predicts that there will be an 18 per cent rise in the asking price of prime central properties in London itself!
The upcoming HS2
After the green signal for the HS2, which is an upcoming high-speed railway in the UK, it is predicted that the real estate prices for certain regions will rise. Since access to public transport is a key factor when it comes to location and neighbourhoods, properties and areas that are close to HS2 stations will see a steady rise in prices. Properties that are within walking distance of HS2 stations can see a 30 per cent rise in the near future. Of course, an improvement in accessibility and connectivity, especially to central London, do shoot the prices of real estate in that area.