Tue, 28 Sep 2021

The Covid-19 pandemic took its toll on the real estate market in the UK. During the first nationwide lockdown in the UK, the real estate sector came to a complete halt. According to estate agents in Gravesend, the real estate market was never really the same after the lockdown. First, there was a mini-boom once the lockdown restrictions were lifted. The buyer's priorities changed drastically, which led to a change in demand. Prime properties were actually more affordable. Prices started to soar while commercial rentals started to fall. Low-deposit mortgages were almost extinct and lenders became very strict about their mortgage criteria. It was as if the UK real estate market went through a 360-degree change. Here is everything that you need to know about the real estate market in the UK.

1 Renting has now become cheaper than buying

For the first time since 2014, renting has now become cheaper than buying in the UK. On average, a homeowner will spend Pound 1125 on monthly mortgage payments whereas a tenant will spend Pound 1054 on the monthly rent. Even though the average cost of rent has risen by 7.1 per cent in one year, it is still cheaper to rent a place than buy a place due to the soaring property prices. Currently, it is cheaper to rent a property in the whole of the UK instead of buying one, apart from four regions, which are the North East, the North West, Scotland and Yorkshire and Humber.

2 Buyer's priorities have changed

Earlier, homeowners and potential buyers would look for places that are close to the city or located in the city centre. However, as more and more people have started working from home, the demand has changed drastically. Now, first-time buyers and homeowners are looking to move to the outskirts and the boroughs. Since people are tired of sitting indoors, they are now looking to move into bigger properties with outdoor spaces. Also, many homeowners are looking to upgrade their lifestyle, which means shifting into bigger and better homes. The demand for homes with outdoor spaces and private gardens has gone up tremendously in the past few months.

3 Property prices are on the rise

The average price of a property in the UK is on the rise, and experts believe that it will continue to rise in the near future. From June 2020 to June 2021, the average price of a property in the UK has risen by 13.4 per cent, which is the fastest growth pace in 17 years! Many factors have contributed to the rise in price. One, the demand for property grew so much in the past few months that the supply could not keep up. Many sellers were sceptical about putting their property on the market during such unprecedented times. However, due to government schemes such as the stamp duty holiday and the mortgage guarantee scheme, buyers were rushing to complete their property purchases while saving thousands of pounds using these schemes. Some experts believe that the average price of a property will continue to increase by 15 per cent over the next 4 years.

4 Interest from overseas buyers is increasing

Due to the uncertainty around Covid-19, and the multiple lockdowns, most overseas buyers were waiting with bated breaths to see the future of the UK estate market. The lack of overseas buyers, and the lack of overseas renters, certainly took its toll on the housing market. The UK prime property market was greatly affected by this. In fact, due to the stamp duty holiday, the initial uncertainty around the pandemic and the decline in London's population, prime property in London became more affordable than ever. Now, as the borders start to open up and the housing market is relatively stable, the interest from overseas buyers has started to increase again. This will further lead to an increase in the overall demand, hence causing the prices to rise.

5 Now is a good time to buy property

Despite the rising prices and the change in buyer priorities, now is just as good a time as any other to buy property. For one, due to the stamp duty holiday, potential buyers and investors can save thousands of pounds on their purchases. Secondly, since the government has announced the mortgage guarantee scheme, it has become much easier to get a low deposit mortgage. Even though banks and lenders have become very strict about their lending criteria, the mortgage guarantee scheme has certainly helped boost the buyer's confidence. Three, there are many residential properties in the pipeline, so experts predict that the supply will soon catch up with the demand, by the end of 2021. This should help drive down the prices. Also, as employees start going back to work once work from home comes to an end, and borders open for international students and overseas employees, the demand for rental properties will start to increase.

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