Predicting the direction of the UK housing market is not an exact science, but it is an interesting pastime. An analysis of the direction of home prices shows a constant and sometimes deadly increase for the first-time buyer who is looking to clamber onto the property ladder; according to This is Money house prices are now rising by an average of £1,300 a month in the UK, equating to £40,000 in two years.
It’s entirely possible that there will be a fall, as occurred in 2009, or a crash similar to that in the early 90s that will blow the entire market wide open and provide great opportunities on the outside looking in. If that doesn’t occur, here are several likely probabilities:
Young people will stay with their parents or continue to rent
Since young people are struggling to afford deposits for their own homes then the rental market will continue to boom. This Daily Mail report highlighted the huge number of young adults who are still living with their parents between the ages of 18 and 34, believed to be more than 6 million in the UK. One assumes that those young people will be saving up for their own deposits as quickly as possible…
More people will live alone
Research reported in Property Wire showed that 75% of those surveyed expect to be living alone and 45% of those aged 18 to 29 indicated they would consider living in a professionally managed private rental unit within the next five years. Interestingly, one of the most important reasons for moving was broadband connectivity. Therefore, the online buying market might show two distinct search trends: a preference for either small, one-person flats or larger homes for two or three generations.
More people will use online estate agents
There’s still a general scepticism or ignorance of what exactly an online estate agent such as HouseSimple can do, despite the great savings in money and time that they generally offer – a flat, one-off fee is generally more acceptable to most people than a sale percentage of up to 3.5%. The older generation, in particular, might be wary of any service where you never get to see someone face-to-face, but the market is slowly growing.
A rise in mobile searches
A no-brainer in some ways, since more apps are being created to cater for so many different house search needs. There are a huge number of applications available, often free, that can screen for everything from house location and amenities to local crime rate and the history of sales for any particular home. Quite how popular any one app will prove to be is impossible to predict, since the market is fairly saturated, but for those who wish to explore here are 30 apps that might be of interest.
London will remain impenetrable to many
The Independent reports that the property market in the capital is likely to rise in price by as much as 50% in the next decade. The average price is already £515,000, which would mean the predictions from the centre for Economics and Business Research could push homes up to the £1m mark. Already, a cyclical market, full employment, inward migrations, restrictions on new home building mean that homes of miniscule size are commanding outrageous prices – such as these.
Extrapolating further, the lack of availability will further swell the rental market in London by as much as 5% in the next few months, at least partially due to the depressing reality of post-Christmas divorces. For those who rent out property it will be welcome news, in comparison to the 1.9% rise reported in 2015.