The real estate sector has been the most flourishing business for over a decade in the UK. People from different regions of the world flocked into London and other parts of the UK to invest in a wide range of properties.
The number of property sellers and buyers were equal in proportion to a great extent. Despite the rise in prices and high-interest rates for mortgage loans, people in large numbers were seen purchasing properties.
From modern flats in the cities to Victorian and Georgian townhouses in the outskirts, properties of all prices were in demand. Most industries were hit hard by the 2019 pandemic in the UK and the rest of the world.
The real estate industry was one among them where monetary losses were in millions. The downfall in the economy of the country affected almost everyone in many ways.
It was challenging for Bicester estate agents and property owners to sell certain property types in the market during the initial pandemic time. Recovering from the pandemic that hit the real estate market will be stagnant for a while and difficult to get back to its normal state.
PRE-PANDEMIC MARKET TRENDS
The property market in the UK has always been appealing to people’s eyes from across the world. There was always a balance of property investors from the UK and abroad who would compete for the best homes in town.
This sky-rocketing demand from buyers led to an increase in property prices. Local banks and mortgage lenders slashed the interest rates making it more favourable for the buyer’s market.
Due to many underlying reasons and uncertainties, the property prices declined by 32% by mid-2019. The prime properties were left unsold for unknown reasons, which shook the stability of the property market.
This unfortunate incident was soon followed by the global pandemic by the end of 2019, which changed the fate of the country’s economy. Despite the rise in property prices, there was not much growth seen in real estate in the UK for a short while.
THE LOCKDOWN SCENARIO
No wonder people were in a state of shock, and almost everything tumbled down from its original condition. Businesses were forced to shut down and people stopped doing everything from visiting restaurants, buying properties to stepping outside their homes.
This led to the gradual sliding down in property prices across the country. Mortgage lenders were forced to reduce their interest rates as nobody was approaching them for loans or to buy a property. Homeowners and estate agents in the city and countryside adopted several techniques to sell the property.
The number of buyers only decreased with every passing day during this period. The real estate business was a significant contributor to the country’s economic growth before the lockdown.
The state had introduced a stamp duty holiday for a long term, where buyers were exempted from property taxes for a specific range of property prices.
With low-interest mortgage rates, higher LTV, stamp duty and reduced property prices people were seen buckling up to make use of this opportunity and invest in properties. Buyers gradually increased even if the pre-pandemic numbers weren’t met, which was a positive sign at that point in time.
THE FUTURE OF REAL ESTATE IN THE UK
The economic growth might be slow in the UK but steady enough to go higher. Unemployment and wage cuts are decreasing, and people have become more stable than before. Businesses have taken a sharp turn and are now progressing upwards.
The significant increase in people coming forward to purchase the property saw a rise in the real estate business. Stamp duty holidays lasted for over a year, until the end of October 2021 after a few extensions and relaxations.
People have changed their property options in this pandemic time where most of the recent buyers prefer a detached home with large backyards and gardens and a dedicated home office setup. Overseas investors and local property buyers started purchasing homes in the country and main regions of London by the beginning of 2021.
With more people flooding in, property prices escalated higher with every passing month in 2021 and reached the highest in August 2021, followed by a slight dip. It is difficult to predict the upcoming market trends due to the random fluctuations taking place regularly.
Looking at the property forecast charts, the property prices might take a while to go further higher to reach the pre-pandemic rates. With a strong impact of lockdown on the real estate sector, it is delightful to see the upward spike in the number of new builds due to the huge demand from buyers.
Both buyers and sellers will lookout for new strategies to excel in the real estate market. Property owners will benefit more in the coming months financially compared to the buyers.