Topnewspro.com The “Real Estate in The United Kingdom Trends and Forecast” news has been added by Shekhar.
The real estate market in the United Kingdom is well-known for rising and falling in past several years. Every year the market trend is different. Market trend has their unique characteristics. Because of the real estate market condition people finding difficulty and became more optimistic. According to the current economy, investors are not getting a proper estimation for buying the property.
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Commercial Real Estate Trends and forecast in the UK
Real estate trends one part is commercial real estate trends in the UK. Even it is called as United Kingdom commercial property. This year commercial real estate (CRE) has a solid grip compare to last year. Now the question is what will be the future of real estate? There are four trends which play a significant role in this on-going year. Those are following below:
- Global Urbanization: Global Urbanization trends are continuing still in the UK. Everyone wants to enhance the access to jobs and amenities and from shopping to healthcare. UK urban population got an increase from 2000 to 2010. If trends continue then demand will become high for retail, housing, offices and other property too.
- Raise in Interest Rates: Interest rate will increase for this year. The forecast can be varying. There are so many factors which indicated that interest rate being low. All depends on the current economic growth trends.
- Increase Capital Flows: UK market is very transparent because of this many investors like to invest here. According to the statistics investment is increasing as expected in the United Kingdom.
- Limited Supply Additions: This limited supply addition only continues with a modest supply growth in the various sectors like multifamily housing, student housing, single tenant, etc. Last recession was very protracted. In this time commercial and residential real estate become riskier sector.
- Low unemployment: Now low unemployment rate decreased compared to the previous year in developed countries. High employment increases the demand of the market. Major cities got effected much.
- Low inflation: Low-interest rate automatically decreases the inflation. Most of the investor see the inflation hedge then rent can be raised if price increase.
- Population growth: Population increase year by year. The projects are more for providing future supply. New construction cannot meet the expectation of a growing population. The population growth will support more investment in the future.
- Improving consumer balance sheets: Strong consumer balance sheet allows consumers to keep credit of there purchase properties and help to generate demand which can be a reason for price rise.
- Increased retirement age: Many countries want to increase human’s retirement age due to social security and budget shortfalls of the government. then the labor force will increase and it will boost the demand for urban properties.
- Urbanization: Population is growing in a rapid way in higher rate in all over the country. This growth will continue even in a smaller town too. That time the economic opportunity will increase in urban hub. The New development also will keep up this growth. Then rent and prices both will increase.
Residential Real Estate Trends and forecast
United Kingdom residential property prices are increasing day by day. If national property value increases 3.9 percent, the consumer price will increase by 2.5 percent. This situation directly indicates that rental rate will increase more than home value. This is very good news for the buyer to purchase a flat and give for a rental basis.
For the buyer, there are many advantages. Buyer can pay an additional rental premium which he can put for down payment. Base rent must be less compared to a new mortgage for the same house. Buyer can apply this when he will not have the 20% amount for down payment.
These are tips which buyer can follow to buy and putting it to rent to his own property. Rent has to be based on current market value. Paying more than market value will not include in the rent premium. If the buyer decides to go for lease basis, then rent must be increased as per Consumer Price Index. Annually rent must be increased by 2.5%.
Factors behind increasing house inventory in the UK:
UK house inventory is getting increase day by day. As per United Kingdom Real estate market forecast, there are some factors Which come under consideration. Those are discussed below:
- Employment: More people working in the UK compare to other countries. Though the financial crisis started in 2008 still the employment rate is becoming high.
- Help to Buy: Buyer need to pay down payment about 5% of the purchase amount. The government also gives loan buyer in 20% of the value and remain 75% if required they ask for a mortgage.
- Right to Buy: Right to Buy is a famous scheme which allows tenants to buy their home with a discount. Because of this buyer get affordable home for them and it is a continuous process.
- Starter Homes Initiative: the First-time buyer is a buyer who is under 40 years. Only for the 20% of the building price Section 106 affordable housing contributions constructs a quality home in affordable rate.
- Right to Acquire: This is similar like Right to Buy. The buyer gets a discount and their homes come in affordable rate.
- Low-interest rates: Low-interest rate can come in three types like ten-year fixed, five-year fixed, three years fixed, etc. The first-time buyer faced more difficulty to deposit 20-25%. In this case, this interest rate helps them.
- NPPF: NPPF is also called as National Planning Policy Framework. This policy makes even more affordable which increase the housing supply.
- Right to Build: In this scheme self-builders and small house building firm mostly get benefited. This is one type of land release scheme where the builder can challenge the nearby council to release land.
United Kingdom Real estate market even good for greenbelt relaxation and adaption. This is also one term which helps people to buy home.