What Does the Future of the Housing Market Look Like?
Investors, property developers and first-time buyers alike are all asking the same question, what does the future of real estate look like?
As we enter a new decade with political instability it can be difficult for people to know how they should proceed in the housing market. Is it the right time to sell? Will next year’s investment opportunities be the same as last years?
Technological developments and the rising wealth divide are among some of the biggest social issues, and they present their own unique problems to real estate. But what exactly does the future look like?
Confusion over Brexit
It’s been the single biggest issue in the country for years and everyone is tired of talking about it, but Brexit casts a large shadow over the future of real estate in the UK. But does the issue warrant the extent to which it dominates discussions around the future of the housing market?
Since it was announced the United Kingdom would leave the European Union at the result of the reference in June 2016, eyes have been on any changes to house prices. Surprisingly, there’s nothing standout to report.
In the East of England for example, the average house price has risen at a very steady level to reach an increase in three years of just under £25,000. Despite the concern surrounding Brexit, despite some initial stagnation, it doesn’t seem to have had a huge impact on house prices. The number of properties sold in the same region has also levelled out to numbers close to before the referendum result, after wild changes in monthly sale numbers within the period.
This is reflected in national statistics, where overall house prices have stayed steady despite signs of an early dip. The variety in the number of sales was also seen nationally.
Until Brexit is resolved and a final decision made, there is no real way of knowing the impact it will have on the future of the real estate market. While there was a small immediate impact, maybe this was just the calm before the storm?
The continued rise of technology
Technology is a part of every aspect of our lives, from a smart device greeting us in the morning to a drive to fit more automation into our workplace. Every sector is dealing with its own technological revolution, but what impact will PropTech have on real estate?
Social media giants such as Facebook have already started to make a move in the property game through advertising rental properties on Facebook Marketplace. Amazon has done the same, offering a similar service with residential retail.
Many of the most successful PropTech innovations are based around simplifying the process, such as how mortgage providers like Breezeful help people find the best lenders and On The Market puts hundreds of properties at the fingertips of house hunters. These types of innovations have seen great success in the last decade and will likely continue to innovate in the future to increase their retail market share.
PropTech innovations haven’t been responsible for the death of the high street estate agent just yet, and signs suggest they will continue to work with traditional sellers by providing automated versions of their services. At the same time, estate agents will look to innovate within the presentation of properties, implementing virtual and augmented reality processes to best highlight homes.
Opportunity in student and retirement sector
Despite some people having concerns about the direction of the housing market after Brexit, there are two property sectors that continue to see growth and potential for the future: student and retirement housing. The rising population of both of these demographics, particularly in urban areas, suggests a clear direction for investors.
Student populations in the UK are moving towards major cities on mass, showing a preference for metropolitan areas. In 2018 the number of full-time higher education students in the UK was 1.84 million, plus 500,000 part-time students. This huge population requires places to live, which has fuelled the boom in student housing in the last decade due to the cheap nature of developing these properties.
Meanwhile, the expected number of over 65s in the country are expected to rise by 8.2 million in the next 50 years, suggesting an approaching demand for more housing for the elderly who will likely not be able to remain in their own home. New models of housing for the ageing population would look to move away from sleepy countryside villages to sociable housing within cities.
Renting as a choice
Renting has become the only reality for the majority of people in the UK, from young professionals to families. Only 38% of 25 to 34-year-olds now own their own home, leading to a scenario where a large majority of the population are looking within the private renting sector. This coupled with a generation who are also renting as a choice due to high numbers of young people moving into cities presents an opportunity investors are likely to continue exploiting.
There are indications that the renting generation is happy with the flexibility of the option, however, how rising rent prices will affect that in the future waits to be seen. In Essex alone, home.co.uk list 4,314 properties for rent as of December 2019.
So many major challenges facing society at large will have an effect on the future of real estate. We will have to wait and see what impact Brexit has and if the renting generation will grow up into homeowners. The solutions to these problems and the development of new tech services will define the next decade of real estate.
About the author: Laura May is Digital Editor at Just Another Magazine, which writes about beauty, fashion, lifestyle, relationships, travel, trends and anything else that matters to you. Name throwing you off? Don’t take it too seriously – they intend to stand out from the crowd.