With conditions in the housing market changing on a daily basis, some will argue that it’s difficult to assume what will happen in the next few years.
However, for those thinking about moving, it’s vital to have an idea of what to anticipate so you can choose the best time to put your property on the market, that way you can guarantee you can sell quickly, and for the best price.
So, what can we expect from the property market in the next few years?
End of the race for space
The pandemic-borne trend ‘race for space’ has dominated the housing market over the last couple of years, as homeowners prioritised space as one of their top requirements in a property. The combination of being stuck indoors, and businesses moving to a remote style of working meant that homeowners naturally discovered how much they valued space.
However as pandemic measures are gradually becoming a thing of the past, work and personal lives are returning to ‘normal’, and we predict that this will result in home hunters returning to their pre-pandemic habits, opting for a shorter work commute over larger properties.
Cost of living crisis affecting homeowner behaviour
Despite Government support measures, there are major concerns about the cost of living due to rising energy and food costs. So much so that many homeowners are making changes to their lifestyle and finances in an attempt to alleviate the burden.
Recent data shows that 20% of people are putting off bigger purchases, with 21% planning to use their savings to deal with rising costs.*
For the housing market, we can expect to see buyers and tenants looking for more energy-efficient properties in order to save money on their energy bills, with 61% of home buyers stating that energy efficiency will be at the top of their property requirements when buying a home in the next few years.**
Increase in house supply
The biggest factor that is predicted to have an impact on the property market in the next few years is the supply of stock.
The supply and demand imbalance has been one of the major driving forces for the property market of late, which has caused house prices to skyrocket.
We are seeing supply slowing enter the market, however with buyer demand still outnumbering supply by more than double, we can expect this to continue to dominate the property market for the remainder of the year and into next.
Good news for first-time buyers on the horizon
Many first-time buyers are finding it difficult at the moment to get a foot on the property ladder due to record-level house prices and low stock availability.
And with demand and activity fueling the housing market, many would-be first-time homeowners are having to battle it out with other buyers who have the financial foundation of an existing property to put them ahead of the buyer queue.
However, with a market cool-down predicted for the next few years, we can expect to see first-time buyer numbers return to more normal levels as stock increases and property affordability returns to more achievable levels, creating a more stable market for those wanting to start their home-owning journey.
This may impact the lettings market, as we will see fewer young people opting to rent.
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* Building Societies Association