If the U.K. economy is to witness a rocket rise in 2017, then we can expect the real estate to act as the major propellant.
Generally, housing can be counted said to compose up to 15% of GDP. Well, it may not have done much lately. This is because in the wake of the real estate bubble, standards of lending have remained pretty tight, since the cautious property owners who survived the crisis recently have become reluctant to taking the plunge into their operations once again.
However, there are some visible signs that these trends are yet to change. Here are some key trends that will redefine the Real Estate business this year;
1. Rising rates of mortgage
Statistics predict that there will be a rise in rates as 2017 wears out. This will cause mortgage rates to rise, possibly making it a tall order for prospective tenants to be able to easily afford their ideal homes. As a matter of fact these rates have already started shooting up. This trend shouldn’t startle you too much, on the other side mortgage interest rates are also expected to decently increase anyway. This will still be a great deal when compared to historical norms.
2. More mortgage credit
In as much as rates may rise, mortgage credit will however be likely more widely available as a result of looser lending standards. Perhaps lower fees will be charged on first-time homebuyers.
To add to this, beginning 2017, governmental mortgage companies will begin backing larger mortgages for the first time in a very long time- thus making it for buyers in expensive markets to completely finance their purchases.
3. More new homes will be put up
Recent data on construction of new homes showed that builders pulled back on new projects late last year. In overall, the trends in home construction is quite positive, the average annual rate of new groundbreakings was at 1.163 million in 2016, up about 5% from 1.108 million in 2015.
This is expected to continue this year since property owners will be motivated by higher wages and increased demand from buyers.
4. Continued rise of medium-sized cities
That’s why more young people find themselves attracted to medium-sized cities. These cities may not possess the same professional opportunities like their counterparts but still provide housing affordability. Some cities have seen building permit issuance rise over the past six years since they attract younger adults who seek cheaper residential houses and lower asking prices. This trend is expected to continue this year.
5. Foreign buyers aren’t moving an inch
One huge trend that has been driving prices way beyond the realm of affordability in major cities like New York and London is the influx of foreign property buyers in the real estate business. Lately, there has only been an increase to this, propelled by buyers from countries like China who seek safer places to bank their wealth, far from the slowing economy of the homeland, where repressive financial policies make it difficult to get decent returns on.