The UK property market hit shaky grounds thanks to the Covid-19 pandemic. While some experts predicted that real estate’s average price would rise in 2024, some believe that the market would remain the same.
On the other hand, a few experts thought we would see a decline in prices, some even saying that the prices could drop by a whopping 5 percent. In short, no experts could predict the future of the UK property market with any certainty.
Almost every person involved in the real estate sector suffered, be it Estate agents in Shrewsbury, movers, and packers in Central London, or sellers in Leeds who were in the middle of selling their homes.
The question on everyone’s mind is simple; what factors have impacted the UK property market in 2024, and what can we expect in the future?
Table of Contents
Covid-19 severely impacted the UK real estate market. During the first lockdown, the UK government completely banned any real estate activity, which led to the property market reaching a complete standstill. During the second and third lockdowns, the real estate market was allowed to function normally, but the damage had already been done.
To boost the real estate market and the UK economy as a whole, the government announced a stamp duty holiday which meant a temporary suspension of the compulsory stamp duty.
Initially, the stamp duty holiday was only supposed to last till September 2020. Still, thanks to the overwhelming response and the success rate, the government decided to continue this scheme till June 2022.
While this scheme did increase the buyer’s confidence and even led to an increase in real estate transactions, what remains uncertain is the state of the property market once the stamp duty holiday is over.
Once the pandemic hit, banks and lenders became very strict about their lending criteria. Gone were the days when buyers could expect low-deposit loans, and it became even harder to get pre-approved for a mortgage.
However, some experts feel that the finalization of Brexit will bring about a certain amount of financial security in the economy. That means banks would again consider giving loans to individuals with low incomes, and low-deposit mortgages would become popular again.
As the mortgages and loans increase, it is expected that we will see a boost in the real estate market. This, coupled with foreign investor interest, would undoubtedly give the real estate industry the much-needed boost required.
The Chancellor announced a mortgage guarantee scheme that should take effect sometime in April 2022. Under this scheme, buyers will be able to buy their new home by paying 5 percent as a deposit. The government will guarantee the remaining 95 percent of the mortgage.
Many top lenders in the UK such as Santander, HSBC, Barclays, and NatWest have agreed to participate in this 5 percent mortgage guarantee scheme
. As of now, it seems that rates of interest under this scheme will be higher than the rates of similar schemes that were around before the pandemic, but experts are hoping that the influx of buyers will lead to an eventual decrease in interest rates.
As of now, this scheme seems promising and will play a big role in the recovery of the real estate market in 2024.
Due to the pandemic, more and more people have started working from home. Due to this, many homeowners are interested in upgrading their lifestyles and moving into bigger and better places. Some homeowners are selling their properties in central cities and are choosing to move to homes in the boroughs and outskirts.
Others rent places in the outskirts, making let-to-let properties more common than ever before. While no one can predict how long this trend will last, it will impact the real estate market.
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