Last Updated on November 5, 2023 by asifa
Homeownership comes under one of the biggest goals for any person. It is the most difficult feat to achieve and takes a long while. Affording a home in the UK is a big feat and does not happen overnight.
People need to cross out multiple factors from a long list of possibilities before they get a place of their own to call home. People in the last decade have been on a house-hunting spree despite the increased property prices, mortgage rates and more.
The recent lockdown scenario that happened around all regions of the world has affected the global economy. The UK property market has experienced a major crisis due to this very incident, thereby affecting the property prices to a great extent.
There was a sharp decline in property prices till the mid of 2020 after which the property prices started gearing up with more people involved in property purchases.
With an increasing number of people from local regions and overseas ready to place their bids on homes, there was a steady decline in the number of properties across the country.
With the changing market trends, people purchase buy-to-let property as many residents prefer renting in London and other parts of the UK. It has become challenging to find flats to rent in Buckingham and other parts of London due to property shortage and suffocating levels of demand.
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SUPPLY AND DEMAND- UK REAL ESTATE
With the introduction of the stamp duty holidays, property prices rose up gradually in 2021. People hurried into purchasing properties in pivotal regions of the UK. This led to a decrease in the number of homes for sale in Britain.
This situation led to multiple buyers targeting a single home, due to which sellers started to raise the property prices. People were ready to pay higher to get their hands on a property of their choice. Not many new-builds were emerging then, and this is where the supply to demand crisis began.
EXISTING MARKET TRENDS
People have started to narrow down their choices and have specific property preferences in recent times. Most buyers now opt for independent homes with life-sized gardens and a peaceful neighbourhood. People are now accustomed to working from home and are on the lookout for a comfortable place to both live and work.
A separate space for working from home is the new addition to their list when they’re looking for a property. The number of properties is relatively lower compared to the buyer population in the UK.
FACTORS AFFECTING THE PROPERTY SUPPLY IN THE UK
The property prices in the UK have steered up by 8.1% in October 2021. Most mortgage lenders have predicted that the demand for property from buyers will go down in the coming months due to the increasing interest rates in the market. It is not easy to determine the actual reasons why there is a continued imbalance in the property market.
Based on the current trends, there are a few reasons that can be affecting the supply.These open-ended factors can influence the property supply in the future.
Overall annual income range
The UK’s property market entirely depends on people’s income. When there is a decline in wages and employment count in the country, people will also stop looking for new properties. Likewise, the nation’s economy returning back to normalcy increased the demand as well as the property prices.
Most people apply for a mortgage loan to manage their finances when they plan to purchase a property. When the interest rates go lower to an affordable range, more people will approach therefore, supply will also increase with the rising demand shortly.
Availability of lands for new-builds
Finding empty lands in London is a challenging task at hand for contractors to build new homes. Checking for the availability of vacant land with all amenities in the vicinity is a crucial step to balance the buyer demand in a particular location.
It is necessary to learn about the borough’s total population before proceeding with new-builds in that region. The emergence of new properties must be based on people’s demand in a particular place, be it the countryside or in the central areas of London, and the number of existing households.
People of all ages from mixed cultures and places can be seen moving into the UK for several reasons. Working bachelors, retired couples, young and growing families, and students occupy the majority of the population in different regions of the UK. It is wise to approach new-builds based on this number.
Local legislative bodies
Getting permission from local authorities to build a new property is a necessary step in any region of the UK. It is better to check for any new regulations and certain restrictions after finding empty lands.