With Brexit in place, as of 31st January 2020, Britain has finally left the EU. Now, there is an eleven-month transition period during which Britain continues to obey basic EU rules. Such rules include the customs unions and import duties, but eventually, these rules and regulations are going to change. Everything is expected to change, for better or for worse. From the economy to the economic policies, from job opportunities to higher employment rates and even property investment, every sector is expected to grow. If you’re thinking of buying new homes in Surrey or investing in real estate in Manchester, here are the 5 trends that will impact property investment in the UK in 2020.
Home prices will be on the rise
In recent years, there has been a slight increase in the prices of real estate in the UK. By 2022, Strutt & Parker have predicted that the prices of houses in the UK will increase by 18 per cent. According to The Guardian, property prices in the UK have increased in every region for the first time in the past years. One could assume that the major cause for this spike in prices is the uncertainty around Brexit as well as the increase in mortgage approvals.
It is predicted by Jon Neale, the UK head of Research at JLL, that around 2.5 million more people will be living in the UK by 2025. That means urbanization is going to increase at a fast and growing pace. As urbanization increases, so does the demand for basic facilities such as housing, shopping, warehouses, office spaces and so on. This means that more and more people will require housing – as the supply for housing rises, so will the demand. However, it is more likely that high percentage residents will prefer to rent out accommodation as opposed to buying one, which means there will be a steady rise in the number of rental properties on the market.
Rise in the number of homeowners
During the financial crash of 2008, there was a major disparity between property prices and wages. That meant, very few people could actually afford to buy their own home. The UK government decided that accessible homeownership was a matter of grave importance. The government launched schemes like Help to Buy, Shared Equity plans and even Shared Ownership deals which were aimed at increasing the number of homeowners in the UK. Now, in 2020, the number of homeowners has seen a slight increase for the first time in the last 13 years. With a cut in stamp duty and more and more UK citizens making use of these government housing schemes, it is predicted that the number of homeowners will only be on the rise in 2020. While the demand increases and supply continues to be the same, the prices tend to increase rapidly.
Importance of location
Access to public transportation has always been an important criterion while buying a home in the UK. Even the distance from schools as well as the workplace is a key factor in the decision-making process. With the increase in population as well as the upcoming housing projects, more and more people prefer to own a house in the suburbs. Since the prices of UK real estate are on the rise, central and urban neighbourhoods will be the most expensive. Using the government’s housing schemes, most first time buyers, as well as younger buyers, will prefer to buy property in the outskirts or in the suburbs so that the purchase can be easy on the pocket. So, while the location will be very important, it is expected that more and more people may move out of central London and shift to the suburban areas, be it due to a change in job location or starting a family.
Focus on sustainable development
Now, with the world becoming more aware of climate change, people are attempting to reduce their carbon footprints. With climate change being high on the UK government’s agenda, we can expect to see more sustainable real estate developments. Thus, mapping out zero carbon buildings and improving energy efficiency, such as electrifying public transport. This means people will be choosing healthier and pollution-free alternatives to reach their destinations. Furthermore, potential buyers will prefer to buy homes and apartments that are sustainably developed and every citizen will attempt to do their bit to reduce all types of pollution.
More technology for real estate
With an increase in prices of real estate, with steady growth in the number of homeowners and with the rise of urbanization, we can see that UK’s real estate market is heading towards a steady incline. As more and more builders focus on sustainable development, you see an increase in the inclusion of technology in real estate. And, all of these above trends will have a major impact on the real estate market in 2020.