UK Property Market To Kick Off 2021 With Strength, According To Experts
While the real estate industry had faced noticeable turmoil during 2020, expectations for the next year are surprisingly optimistic. That's not only for the UK, as different markets worldwide have shown promising numbers heading to 2021.
It's not too difficult to see why: lockdowns, low-interest rates, and remote working has enabled people to think about moving or even buying a home. Additional trends, like remote working and lower house pricing in larger cities, have increased the housing market demand.
It's an interesting shift from the downturn experienced by commercial real estate. Curiously, the same reasons why residential real estate has been growing have driven the commercial sector down. Lower need for office space and retail installations have left a dent on commercial leases.
That said, 2021 seems to be a good year for the property market in the UK.
COVID Has Spurred New Interest in the Real Estate Industry
COVID Has Spurred New Interest in the Real Estate Industry
Property Wire recently released an article on the UK's real estate predictions for next year. It's mainly a compilation of opinions from GRE Assets, with the leading voice coming from Michael El-Kassir, the company's managing director.
The main observation from the article seems to be somewhat of a "perfect storm." Basically, market demand is likely to pair with COVID vaccines to spur buyer interest in real estate. Experts expect to open 2021 with this energy.
GRE Assets has several offices around the EU, and it has measured COVID's impact on the UK real estate market. El-Kassir describes the company's experience during the latter 2020 and uses it as a sign of what's to come, and we can attest to their claims because of our own experience.
People Are Considering Home Buying a Lot More
People Are Considering Home Buying a Lot More
Lockdown has forced most people to remain home, and even as regulations are starting to calm down, everyone is still encouraged to stay indoors. That's quite obvious, but it plays a vital role in determining upcoming real estate trends.
More people are considering buying homes, and many markets are already experiencing booming sales for residential real estate.
It has also bred more interest in aspects that home buyers used to ignore. Those include access to open areas with better airflow, like balconies and terraces or nearby parks.
The Shift From Offices to Remote Work Plays a Vital Role
The Shift From Offices to Remote Work Plays a Vital Role
This trend has been affecting all markets around the world, and it's understandable. Employment has always driven the population; thus, big cities tend to be that size because of their job opportunities. However, it's also the reason why property prices are higher for both rent and purchase.
Smaller cities and suburbs have seen increased demand because of their affordability. Lower rents are more comfortable to harness thanks to remote positions, and it's not necessary to move to larger cities to find a job. However, it's been driving prices upwards.
Larger cities are experiencing much lower buyer interest for the reasons mentioned above. Therefore, property prices are starting to decrease as time goes by.
While returning to the office is possible for many workers as the crisis settles, many people will prefer to stay home. Therefore, a balance might be possible between the two markets.
Promising Market: the South East
Promising Market: the South East
Finally, El-Kassir stated that the southeastern region was the most promising market for next year. Constraints within the housing market boosted demand levels while dwindling the housing supply after the lockdown.
In general, the UK has seen a spurt in housing prices; the SE is a clear highlight. This region has a great offer, with affordable homes while remaining connected with London. Demand in this region has been massive, especially against supply, making it one of the UK's hottest markets.
What do we Think?
What do we Think?
It might sound weird, but the COVID crisis has set up many advantages for real estate companies and investors. Sparking buyer interest through low mortgage rates and remote work proves to be a vital factor at play for real estate's 2021 developments.
Now, 2021 won't be beneficial for everyone, even with optimistic predictions. The opportunities are there, but companies and investors need to spot them and take them. Office real estate must adapt to remote working, probably studying co-working opportunities. The same is true for virtually all other sectors within the industry.
Spotting the opportunities requires information and market analysis. Thankfully, we can provide both for you if you subscribe to our newsletter. We curate reports from the best sources, as well as our experience, to provide all the information you need before making any decision.