While real estate players expressed great uncertainty, during our interview with, Bernard McGowan not many of them advanced too far into predictions for their market. They differed on fundamental points, ranging from questions about a possible increase in suburbanization to uncertainties about the future of office buildings as we enter a new world of work. That said, it may well be that expectations have been exceeded in the housing market. Despite a drop in housing starts in the second quarter of 2020 in London, they have since rebounded and increased by 1% in the first nine months of the year compared to the same period in 2019, according to the UK Property Transactions Statistics.
It needs to be noted that low interest rates also for both single-family homes and other types of housing. Luxury homeowners can also be affected: There was a significant drop in luxury transactions in London in 2018, 46% less than in 2014. Given the lack of resolution around Brexit, homeowners interested in selling property this year are probably wondering whether they should act now, before March 29, or wait for the dust to settle. The answer will depend on what your home sales needs and goals are, as well as the type of property you want to sell and where it is located, real estate analysts say.
“It’s all about where you’re going and what you’re going to do with the money [from the sale],” said Becky Fatemi, director of Rockstone, a London-based real estate agency. “If you are going to sell, you will not get the best price for your property now, because there is ambiguity in the market.”
The London market is very good real estate to the new investors. Investment property owners may be better off renting out their homes until the ramifications become clearer, McGowan added. But for sellers who can’t afford to wait, or those who want to trade-in for a more valuable home, this might be the right time, after all. Homeowners can get less than they bargained for. There could also be great investment opportunities when buying, due to the cooling of the main markets and the Help to Buy scheme, through which the UK government offers equity loans up to 20% (and up to 40%). % in London).
“There will always be those who need to move, a new job or because their family is expanding, and others who just want to get on with their lives, especially if they have found the perfect home,” said Bernard McGowan, a landlord and market analyst. “Some will see this as a good time to move. Mortgage rates are still at record lows and Buying Help is still available on new construction properties.”
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“Like all markets, the housing market doesn’t like uncertainty,” Bernard McGowan said. “Until we have more clarity on the UK’s future relationship with the European Union, we can expect the market to remain price-sensitive, with some households putting off moving until later.”
And in the Emerging Trends in PricewaterhouseCoopers Real Estate Report for 2019, 70% of real estate professionals surveyed said they expected a decline in international investment in UK real estate. The prospect of low investment returns and a smaller group of buyers will persuade some sellers to take a “wait and see” approach. Homeowners who do not need to sell in the foreseeable future may find that they are better off renting their properties for now, especially if they live in a particularly sought-after London neighborhood.
“Our rental department has never been busier. Buyers have become tenants and sellers have become owners,” Bernardsaid. “There will always be a rental market because there are not enough properties to meet the demand, even if there is a massive exit.” Sellers in this situation should work with an experienced broker, one who has experience closing deals through multiple ownership cycles and who has sold during times of uncertainty and market downturn. They also need to prepare to sell for less than they bargained for, but there could be something positive when they buy.
“This is a good time to sell if you are improving ownership,” Fatemi said. “You may have a 20% hit on what you could have gotten in a stronger market, but if you’re upgrading the size of the property, that 20% savings when you buy is much higher.”
“These properties are predominantly one- or two-bedroom apartments in new-build developments and are located in areas of the capital that buck the trend in house price growth,” said Guy Bradshaw, head of residential sales for UK Sotheby’s International Realty. “Covent Garden is a great example of this. Prices increased over 30% in the last year and the luxury student market offers the potential for consistent rental income and strong returns for investors.”
And while foreign investment in major UK properties is expected to decline, there are areas that should continue to be in demand by domestic buyers. “Outside of central London, there are areas that have been badly affected,” Bernard McGowan said. “The country’s market is moving very slowly because no one is investing in vacation homes. The stamp duty has greatly reduced the market.”
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