A Forecast for London’s Property Market 2020
More than three years after the public voted to leave the EU, we left on 31st January, ahead of a transition period that is set to last almost a year. We will stay in the single marketing and customs union until the end of the year, which allows enough time for trade negotiations. There have been a lot of theories about what life might be like after Brexit, including the uncertainty that surrounds the property market in the UK in particularly London. And, all different types of people from all backgrounds have been keeping an eye on property prices, including first-time buyers, property developers, conveyancing solicitors and financial investors. But, the result of the latest general election that saw Boris Johnson become Prime Minister has taken away some of the uncertainty that has clouded the UK property market for quite some time. Following the Tory’s win, many house price predictions began to follow that pointed towards a rise in prices across London.
Where Should Home Hunters Look?
Areas in East London have seen the highest price growth in the capital since 2014 due to on-going regeneration projects. This was particularly driven by the Olympic legacy and the construction of new towns such as Barking Riverside. This growth is predicted to continue, with first-time buyers drawn to these new developments in the east of the city. Over the next three to five years, house prices are expected to rise by almost 20% in the borough of Redbridge, which is the highest increase in London. But, in a few years’ time, the rise in house prices are expected to spread in other areas including Richmond, Lewisham and Islington.
Is There Now a Better Chance of Selling a Property?
Now that the UK has left the EU, there seems to be an uplift in demand which suggests that the property is set for an active first quarter. In fact, there have been more properties listed by new sellers that we have seen in the past couple of years. And, while there might be more turbulence to come in the Brexit negotiations, right now there is a great opportunity for homeowners to get their properties on the market while it is not affected by Brexit.
Buyers Will Become More Confident This Year
Whilst finding properties in the right location and within budget remains to be the 2 biggest challenges for buyers. But, there has been a 5% fall in the number of frustrated buyers over the past year. Finding a property in the right area is less of a challenge for first-time buyers. The real challenge to become a homeowner is the price, saving for a deposit and securing a mortgage. Despite this, first-time buyers are the largest buying group outside of London and make up over 40% of the market share.
There is Cautious Optimism
Following the result of the latest general election, multi-million pound business deals were completed in the heart of the city. In fact, wealthy investors quite literally piled into London and started snapping up luxury properties. However, there are many property experts that are approaching this year with cautious optimising and say that the UK has entered a dawn of false hope because we still don’t know what’s going to happen.
The Number of New Homes Have Reached a 13 Year High
Despite being quite behind the government’s target, the number of new homes registered to be built across the UK has hit a 13 year high. There were just over 161,000 homes registered last year, which is the highest level since the 2007 financial crisis. However, the government wants housing associations, local councils and private property developers to increase construction to 300,000 by as early as 2025.
Property Will Continue to Be The Most Popular Investment Asset
Since the UK voted to leave the EU, the housing market slowed down. While property values have remained steady, there were fewer transactions taking place, which highlighted a slowdown for many investors who were once drawn to the growth of property investment. However, despite this, the majority of investors have not let Brexit impact their decisions which means that property continues to be the most popular investment asset over stocks and shares.