Among the many countries and places around the world, people are always curious about the real estate market and the ever-changing trends. Over the past year, once lucrative deals and properties have been able to be easily purchased with the easing 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 growing demand, people are driven to make their choices quickly and act accordingly. Buyers can still get their dream property on their own or with the help of estate agents Hereford.
Every business has its share of pros and cons. The UK property market has never been stable and predictable for people. This activity has largely progressed beyond the frequent peaks and troughs over the years. The year 2022 will see a major transformation of the real estate business. Technological advancements have made their way into real estate to facilitate complex processes such as marketing automation, virtual tours, presentation and more. However, the activities that have taken place over the past year have created some impact, giving rise to new challenges for first-time buyers and upsizers.
DECLINE IN HOUSING STOCK
When considering investing in a property, people are always fighting over the best options. Over the years, Britons have been on a property buying spree in towns and countryside. When the government announced the stamp duty from mid-2020 to the end of 2021, house sales reached a remarkable number since 2007. These cycles of endless buying and selling deflated the number of properties currently available and will continue to decline by 2022. Buyers will continue to compete for a single household and bid higher to secure them.
DELAY IN THE RISE OF NEW CONSTRUCTIONS
The market was unsurprisingly active despite several setbacks in the country’s economy and real estate policies. The trajectory of the real estate demand graph continues to grow, with each year exceeding the number of properties in the country. With too many houses already built in the neighborhood, there is very little room left to build new ones. The availability of empty land is scarce, pushing back any plan to build new housing in the UK. Another big factor contributing to all this backlog is insufficient government funding and budget for new builds.
IMPERATIVE DEMAND FOR HOUSES
A lot has changed since the UK’s year-long lockdown. The individual approach to life is an important aspect that has influenced the real estate market over the past year. With the hybrid working approach, people are now looking for larger homes with outdoor spaces to accommodate their office space. Existing homeowners would struggle to expand or downsize their homes due to soaring demand and a disintegrating supply balance. This demand will continue even further when new listings are advertised again, which will stimulate buyer activity and help stimulate overall real estate transactions.
INTEREST RATE INFLATION
Applying for a mortgage loan is the go-to option for all buyers to access a lump sum in a short period of time. As demand and supply do not complement each other in number, several problems have arisen, making the property purchase procedure complicated. With price inflation in the market, other aspects involved in this process have also increased sharply. UK central banks raised interest rates in December 2021 and will continue to raise further in the months ahead. This price change will have a direct influence on borrowing costs, residential mortgages and more.
The real estate market shows an overall positive outlook in 2022 based on income generation. However, rising prices will have a larger scale impact. With borrowing costs, demand and house prices rising everywhere, the other part of the crowd living in rental homes will have their fair share of challenges. People who buy properties as an investment vehicle will increase average rental rates in neighborhoods to compensate for current market value.