Sometimes, a new day dawns with a dull grey, cloud-ridden sky predicting a totally gloomy, rainy day and then, suddenly, the sun peeps out, lending brightness and warmth to the day. Predictions are not always correct. Coming to today’s topic, the same can apply to the UK housing market and New build homes prices . All those involved in the property market, including the Estate Agents in Belsize Park, will agree that, so far, certain forecasts about house prices did come about. In contrast, others seemed to go in the other direction.
There are conflicting issues as to whether or not house prices in 2022 will continue to rise. Contact the estate agent that helps to find the best Villas for sale Marbella.
Positives:
Requirement of Accommodation: The pandemic and consequent lockdown forced many people to stay at home, living and working from the same confined premises. This has led to a general trend of people prioritizing on their type of accommodation. Many are looking for larger 2 – 3 bedroom homes, including room for office space and with open areas for a garden and recreation. Most of these are available in the suburbs and rural areas, and the demand in such areas is likely to continue even through next year. Though offices will reopen, it is likely that some employees will continue to work from home, at least on a part-time basis. Contact the company that provide the best Surface Finishing Equipment for the titan parts.
Savings: With many retail and entertainment venues closed during the lockdowns, unexpected savings resulted in consumer spending. Also, the Government-backed furlough scheme helped people with expenses and savings. These savings have come in handy for those looking at putting down a reasonable deposit to buy a property and move home.
Demand outstripping Supply: This has been the case in the UK property market. The boom in property sales triggered by the Stamp Duty Land Tax holiday led to a further lag in supply. As long as the supply does not meet the demand, prices will stay high
Mortgage rates: The government’s 95% mortgage scheme, allowing buyers to pay just a 5% deposit, has been a great incentive for potential buyers. With the risk factor of repayment decreasing, additional attractive mortgage schemes have been put on the market to entice buyers.
Low-interest rates and search for returns: As global interest rates have fallen, people are thinking of investments other than finance, and since the real estate market has proved to be resilient, potential buyers are looking at such investments. Although the residential trend is moving to more spacious accommodation in the suburbs and rural areas, there are still city properties appealing to investors looking at the long-term benefit of renting. This applies to foreign investors as well who are still very interested in the UK real estate market. With the Covid vaccination programme well underway and life returning to near normalcy, city life will re-emerge, bringing a demand for residential and business accommodation. With schools and universities open, the student rental requirement will also probably rise.
Hopeful boost in the economy: While restrictions are withdrawn, and consumer spending resumes, it will hopefully help the economy. This, in turn, will result in house prices remaining high.
Negatives:
Stamp Duty Land Tax: The SDLT holiday, which was the leading cause for the boost in property sales during 2020, continuing into 2021, is set to end at the end of September 2021. This may cause a decline in the demand, with people having to pay the normal stamp duty land tax from 01 October 2021. If the demand decreases, the prices are not likely to remain as high as before.
Unemployment: With the furlough scheme also ending on 30 September 2021, further unemployment may ensue. With lower incomes, repayments get more difficult, and a fall in house prices may occur.
Affordability: Even with the advantageous mortgage schemes available, the repayment/income quotient must be considered. The higher the mortgage rate, the more likely a fall in house prices.
Risk from external shocks: House prices have been on the rise over the last year. This makes the housing market more at risk in the event of an “external shock” – an unpredictable event that starts outside the economy but impacts it significantly – like financial crises, the pandemic or a high rise in oil price. In such an event, the market is likely to fall, as investors, especially those with more than one property, will limit their purchases, causing the demand to reduce. And, when demand falls, so do the property prices.
Conclusion: With all the pros and cons, it is difficult to accurately predict what will happen to UK house prices in 2022. It depends on many factors, and only the future will tell. However, with the “bricks and mortar” showing dependability over the years, even if there is a slump in house prices, they are likely to pick up, and the real estate industry will continue to prosper.
