With the news about the first financial results of the new year, many are wondering what is in store for the UK property market in 2020. While there has been some talk of a “Boris bounce”, it still needs to be proven what the year will bring. Everyone from people looking to purchase a new home to investors looking for good returns are looking at the property market to decide what their financial plans will look like for the year.
2019 was one of the worst-performing years financially as post-Brexit anxieties reached a fever pitch. Since the vote in 2016, the economy has taken a hit, with the pound dropping in September of 2019 to the lowest it had been in three years. Both investors and private individuals held their breath and waited before making any large purchases like property.
However, the first results for January on housing listings came in and proved that housing prices were on the rise with the average asking price on the property website Rightmove at £306,810. 65,000 UK properties have also been listed. The housing market has always been one of the best indicators of economic confidence and future spending, so this is a good sign.
Possible Market Growth
Savills is predicting a 4.0% growth in the property market during 2020, the biggest growth for the entire projected period of 2019-2023. Compound growth for the same period is estimated to be 14.8%. As well, both foreign and domestic investors are planning on investing billions into the commercial property market now that the UK market is being viewed as a safer bet for investments.
In 2019, Butterfield Mortgages Limited surveyed a group of investors to determine their attitudes towards property. 61% of investors surveyed believed that property was a good source of stable and secure returns. 20% revealed that they intended to invest in property during 2020 and beyond. 57% also believe that foreign investment in the UK property market will be important for future economic growth.
However, as of writing, the 2020 budget for Boris Johnson’s Conservative party has yet to come out. Johnson has touted a 3% surcharge for foreign investors during his campaign. With this uncertainty and that the UK-EU trade deal has yet to be negotiated, economic concerns haven’t been fully alleviated.
What does all this mean for the future?
For the average person, their biggest concerns will come when attempting to buy a new home. The increase in buyers means there will be higher competition for desirable homes and possibly higher prices. A good estate agent with expertise, market knowledge, and the latest in estate agent software will be essential.
For investors, particularly foreign investors, they should pay attention to the rumblings of surcharges and watch for increases in prices in desirable areas like central London. Large firms will be moving in so competition will be high in the near future.
For those in the property industry, it’s shaping up to be a busy year. Everyone from lenders to agents will be working hard to sell properties in the coming year. Those in the industry should be sure that they are prepared for the demand. Additional employees and productivity boosters like estate agent software should be handled now.