Amongst the many countries and places in the world, people are always curious about the property market and the forever changing trends. In the last year, the once-lucrative deals and properties could be easily bought with the relaxation of SDLT in different parts of London, England and beyond. People are always on their toes to haggle and get the property of their choice in the UK. With the soaring demand, people are pushed to make their choices quickly and act accordingly. Buyers can always get their dream property by themselves or with the assistance of estate agents Hereford.
Every business has its share of perks and disadvantages. The property market in the UK has never been stable and predictable for people. This business has progressed extensively beyond the frequent spikes and dips over the years. The year 2022 will see a significant transformation in the estate business. Technological advancements have made their way into real estate to ease out the complex processes like marketing automation, virtual tours, showcasing and more. However, the activities that took place in the last year has created some impact giving rise to new challenges for first-time buyers and upsizers.
DECLINE IN THE HOUSING STOCK
When planning to invest in a property, people always compete only for the best options. Over the years, people in the UK have been on a property buying spree in both cities and the countryside. When the government announced stamp duty in mid-2020 through the end of 2021, house sales hit a remarkable number since 2007. These endless buying and selling cycles have deflated the number of properties currently available and will further decline by 2022. Buyers will continue to compete for a single household and quote higher bids to secure them.
DELAY IN RISING OF NEW BUILDS
The market has been unsurprisingly active despite several hiccups in the economy and the nation’s real estate policies. The trajectory of the property demand graph is steadily growing with every passing year exceeding the number of properties in the country. With too many houses already built across the quarter, there is very little room left for building new ones. The availability of empty lands is scant, pushing away the whole plan of building new housing units in the UK. Government funding and budget for new builds, which is insufficient, is another significant factor contributing to this entire delay.
OVERRIDING DEMAND FOR HOMES
Many things have changed since the year-long lockdown in the UK. Individual’s approach towards life is one prominent aspect that has influenced the property market in the last year. With the hybrid work approach, people are now looking for bigger homes with outdoor spaces to accommodate their office space. Existing homeowners would find it challenging when they are upsizing or downsizing their homes due to the skyrocketing demand and the disintegrating supply balance. This demand will further prolong when new listings are released again, which will drive buyer activity and help boost the overall real estate transactions.
INFLATION IN INTEREST RATES
Applying for a mortgage loan is the go-to option for all the buyers to access a lump sum in a short period. As the demand and supply do not complement each other in number, several issues have risen, making the property purchase procedure a complicated one. With the inflation in prices in the market, other aspects involved in this process has also steered up sharply. Central banks in the UK raised the interest rates in December 2021 and will continue to increase more in the coming months. This price change will have a direct influence on borrowing costs, residential mortgage loans and more.
The real estate market holds an overall positive outlook in 2022 based on revenue generation. However, the rising prices will have an impact on a broader scale. With borrowing costs, demand and property prices increasing everywhere, the other section of the crowd living in rental homes will have their fair share of challenges. People buying properties as a means of investment will increase the average rental rates across neighbourhoods to compensate for the current market value.