Over the past few decades, the housing market in the UK has been influenced by several factors on both the demand and supply side of the market. Things like interest rates, the economic state, the size of the population, and the real income of citizens have led to consistent fluctuations in property pricing. While most of these factors are regular market indicators, there are a few new subjects impacting the state of property this year.
The political climate has the ability to make or break the market in any given year. In 2018, the United Kingdom property market seems to be awaiting our exit from the EU in 2019 with baited breath. Many are referring to the market as “subdued,” due to longer sale cycles and a lower than usual supply of listed homes. Some experts predict that it will pick up once our exit plans are finalized and we have a clearer picture of their direct impact on our economy. To improve a subdued market, investors and clients alike will want to see continued business and developmental growth even after we have left the EU.
Demographics and generational changes also play a big part in current UK property trends. Nearly half of all millennials are expected to rent well into their 40s. One-third of them will still be renting by the time they retire. Higher home prices, lower income, and increasingly strict credit rules are making it difficult for younger generations to consider homeownership. They are forced to rent, often in locations farther away from their jobs and social centers for affordability purposes. The commute, rent, and other debts prevent many from saving enough to purchase property of their own.
Not all market impacts are negative. Technology is gearing up to assist the market and the estate agents that work within it in a positive way. More homes are being exposed to more potential buyers thanks to modern digital tools and social media. Consumers will be able to virtually tour a home without ever having to set foot in it. As technology continues to progress, we can expect to see a demand for more “smart homes” which could attract additional investors to the area. Finally, blockchain has the potential to forever change the way we conduct transactions and title transfers on a regular basis.
These are just a few of the thousands of other factors, small and large, impacting the property industry in the United Kingdom right now. While we may not be able to predict the outcome, we can be sure that the market is in for some big changes in the future.