How Property Professionals Must Continue to Adapt to the Property Market
Nothing has been immune to the impact of the pandemic, but the property market has fared better than many predicted. When the pandemic hit the property market was predicted to slow but quite the opposite happened. In fact, UK house prices were up by the most since 2004. While the world appears to be once again shaping up to return to normal in 2022, let’s consider how property professionals must continue to adapt to the property market.
Property prices and rent will increase
House prices rose by 3.4% in the quarter to the end of November for 2021 and they were 8.2% higher than they were at the same time the year before. The housing market is performing strongly due to high demand, a strong job market, and competitive mortgage rates. Property professionals in 2022 must keep the ball rolling and avoid a slump.
Rent is also set to increase, making it harder for first-time buyers to save for deposits to get onto the property ladder. Considering that interest rates have also gone up, cheap mortgage deals and borrowing money are going to become harder to do. So, while there are plenty of positives in the housing market, the bubble won’t stay intact forever. Adapting to developments will be essential.
Coping with the rise in living costs
Living costs are increasing, which poses a problem for those trying to run their household. Rising fuel and energy costs are behind the jump in the cost of living; inflation grew by 5.1% in the 12 months to November 2021.
With more also being spent on living costs, renters will find it doubly hard to find deposits. This could see the decrease in demand for mortgage lending or a shift in how people borrow money. We are likely to see remortgages happen more often while affordability tests could be introduced to try and help first-time buyers.
Other ways buyers could look to find their way onto the property market is through longer mortgage terms, with 40-year mortgages already becoming more popular. There are suggestions that a 50-year mortgage could soon enter the property market.
Landlords continued sympathy for their residents
With the cost of living increasing, and uncertainty over the economy due to the pandemic, landlords have to become more sympathetic towards their tenants. “Our experience was that tenants prioritised their rent over other costs, finding savings where necessary to avoid arrears building up”, explains lettings experts, Hunters Group. “Our landlords were also flexible wherever possible, meaning we saw very few problems among the homes we let and manage”.
With fewer first-time buyers able to buy property, the rise in the popularity of buy-to-rent properties will continue. These are homes bought with the view to moving a tenant in on a long-term basis, typically a family. Property professionals already deal with plenty of lettings, but it looks like that could grow, with a potential lack of first-time buyers entering the market.