The rapid changes in the UK’s economic and legal landscape in recent months will bring about many changes in the real estate market of the country. Find out what those new developments could lead to in this article, where we’ll make our property predictions for 2020 and reveal what it could all mean for the future.
Rents are expected to go up
Tax laws that were imposed in 2016 and 2017 have forced buy-to-let property owners to increase their rent in order to cope. This year in April, even more restrictions will be put into place. This is good news for landlords, as the new policies will mean that they can justify increasing the cost of rent in order to cope. For tenants, however, the opposite situation will be observed as monthly expenditures will surely go up.
Mortgage rates will slightly increase
The last decade has been marked with historically low-interest rates for mortgages in the UK, with rates remaining under one per cent for the last ten years. In fact, since 2018, mortgage interest rates have remained at about 0.75 per cent. This will likely remain to be the case for 2020, following the decision by the Bank of England to adhere to the same rate. With that in mind, a small rise in the country’s inflation rate is expected to occur, which would, in turn, entail a similar increase in mortgage interest rates as well. However, while the increase might be noticeable, it will likely not affect the market to a significant degree, as the rate of home purchases has been steadily increasing in recent years.
The real estate market will pick up
Because of the looming economic uncertainty brought upon by the possibility of the UK exiting the EU, real estate owners and buyers have been reluctant to buy or sell their properties. This has caused the market to slow down since Brexit was first announced.
Now, with election results indicating that Brexit will likely finally push through this year, the real estate market should experience a surge in real estate activity. This could potentially mean that property prices will also go up to cope with the sudden demand.
Energy efficiency will become a priority
The increasing urgency called to address the issue of the climate crisis will mean that new, potential, and existing homeowners will want greener homes to live in. This, together with the government’s country-wide goal to reduce total greenhouse gas emissions, as well as the general movement away from high-maintenance homes, means that property sellers must implement greener systems in their homes in order to attract buyers.
Whether you’re looking into buying a new house this year, or are involved in the real estate industry, these predictions are certainly worth taking into consideration. The potential impact these changes will have on the property market, as well as the general quality of living in the UK, might prove to be difficult to ignore.
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