Property Market Trends and Portents: What Should Home-owners Expect?
After more than six months of concerted growth at the beginning of 2014, the housing market has cooled somewhat in recent times. After concerns that a new bubble may be about to form in the market, property prices have stagnated and even started to fall in the third financial quarter. This trend is set to continue for the last three months of the year at least, with the latest survey from the Royal Institute of Chartered Surveyors (Rics) showing a -18% balance in respondents reporting a rising demand for housing in the UK.
Although this sudden dip in growth has caused consternation among home-owners and potential buyers, it is unlikely that it will continue indefinitely. Even with the UK economy expected to grow at a consistent rate during 2015 and beyond, however, it is still worth considering the trends that will impact on the property market going forward.
3 Property Market Trends to Consider
With this in mind, let’s take a look at some of the real estate trends that we are likely to encounter in the fourth financial quarter and 2015. These include: -
1.1 A Rise in UK Construction Output
There is a strong link between real estate growth and the construction sector, and both are considered as being key engines of economic expansion. Given the recent stagnation, it was therefore surprising that construction output rebounded in September, recording growth of 1.8% following a 3% contraction in August. Not only does this underline the value that public sector projects can add to the market, but also the fact that the property sector is built on solid foundations.
1.2 Growth in the Buy-to-let Marketplace
While the property market has shown excellent resilience in recent times, the slowdown in price hikes has also triggered growth in the lucrative buy-to-let market. As a growing number of individuals find themselves priced out of the UK market, many turn to rental properties as a way of sourcing accommodation. This has created rising demand and enabled landlords to raise their prices, with the cost of agreeing a new tenancy having soared by 3.7% during the last year alone. This trend is set to continue for the rest of the year at least, so aspiring landlords and realtors such as Featherstone Leigh may wish to capitalise on this.
1.3. London will Remain Decoupled from the UK Economy
Throughout the course of the last property market boom, London prices and trends decoupled from the rest of the UK and this trend is likely to remain for the foreseeable future. One of the primary reasons for this is London’s emergence as a global icon in the real estate market, which means that it benefits from overseas investment in a way that other geographical regions do not. It is considered to be something of a safe-haven for international property investors, and while this is good news for the economy it means that the capital does not provide a true barometer for the real estate landscape as a whole.
From Vickie Harrison