Have you been thinking about purchasing a house in the UK in 2021? Have you been second-guessing that decision due to the Covid-19 pandemic? Well, you aren’t the only one. The uncertainty around the Covid-19 pandemic has impacted almost every sector and every industry. Hospitality, real estate, entertainment, aviation have all been severely affected. In fact, during the first lockdown in the UK, the government completely banned real estate transactions, leading to a steep fall in the average price of real estate in the UK. While the second and third lockdown allowed real estate activity, the market never fully recovered! If you’ve been thinking about moving to a property in the UK, here are the four most essential things that you need to know about the housing market in the UK in 2021.
Change in buyer priorities
In the recent year, as more and more people have started working from home, we have seen a significant change in buyer demand. Earlier, potential buyers would dream of owning homes in the heart of the city. As most people are working from home, their priorities have changed. Homeowners are looking to upgrade their lifestyles and move into bigger places and spacious homes. A property with a home office and some outdoor space has become one of the important criteria while searching for new homes. Due to this, many buyers are looking at properties in the suburbs and the boroughs. Here, the properties are bigger, better and relatively more affordable. As the demand for properties in the suburbs and boroughs continues to increase, it is expected that this will become a popular trend in 2021 and possibly in the near future. If you’ve been thinking about shifting to the suburbs, get in touch with estate agents in wolverhampton for help.
Mortgage availability and low-interest rates
As of now, the mortgage rates are pretty low. The UK government has taken this carefully calculated move to lower mortgage rates and interest rates to boost buyer confidence and revive the real estate market. In 2021, experts predict that low-deposit mortgages will become popular once again, which will further boost buyer confidence and increase buyer demand. Also, the UK government has announced a mortgage guarantee scheme under which potential buyers can purchase a new property by paying just 5 per cent of the deposit. Individuals who have saved thousands and thousands of pounds during the pandemic because of a lack of opportunities to spend their money will and should make the most of the low mortgages and low deposits and use this opportunity to invest in the housing market.
Impact of stamp duty holiday
The UK government originally announced the stamp duty holiday as a temporary suspension of stamp duty tax in order to boost the real estate sector. However, thanks to its amazing success, the government decided to extend the stamp duty holiday further. Due to this temporary suspension of stamp duty, potential buyers will be able to save thousands of pounds on their purchase. Combine this with low mortgage rates and low rates of interest; it is just a win-win situation for every buyer. The government is using these schemes to boost the real estate market and increase buyer confidence, and it seems to be working. As per the experts, the continuation of the stamp duty holiday is an excellent way for the government to revive the real estate market and the economy.
Increase in buy to let investments
As many have started working from home, investors who have invested in buy to let commercial properties will shift their investments from commercial properties to residential properties. As per the trend in the market, it seems that investors are looking at three to four-bedroom properties as buy to let investments, keeping in mind that most renters and homeowners are looking to move into more spacious places. Thanks to low-interest rates, high demand for spacious properties and decent rental yields in the suburbs, it is expected that buyers and investors will probably start investing in buy to let properties in the suburbs. Also, let to let properties have become very common. Let to let is when homeowners let out their properties and shift into bigger rental properties. If you’ve been thinking about investing in a buy to let property in the UK, you should consider buying a property in the suburbs or the boroughs, as per the current housing trend.