Property Market Predictions
Coronavirus has shook up the property market, big-time. There’s no doubt about it. But exactly how much? Most investors have got a fairly good idea what to expect in the short term, but what about slightly longer than that. What will the property market look like in the next 5 years? Here are my property market predictions! Let me know your thoughts, you reach out through the contact page or directly on twitter.
The big question – Will prices go up or down?
Well this is a difficult one to answer, because in all honesty I think the answer depends. It depends on where abouts you’re talking.
My honest opinion is to answer this properly, we need to think about how Coronavirus has changed the UK. From there, the next question to ask ourselves is how will those changes impact the property market? Spoiler alert: I think we’re about to see a bit of price balancing across the country, in some areas we will see prices go up and in others, prices will go down.
So let’s start there, thinking caps on!
How will Coronavirus change the way we live? My predictions:
- More people will have the ability to work from home, consistently. For many organisations home-working will become the norm.
- UK based holiday industry will increase. Why? Because more and more households will have a family dog. Also, there’s a question whether or not some of the airlines or travel companies will survive. If they don’t then the basic laws of supply and demand will take over, meaning that prices for travelling abroad will rise meaning fewer families will be able to afford going overseas.
- The death of the high street may have been accelerated. Online shopping is likely to grow faster.
- UK manufacturing may see a revival. Many businesses have been hit by supply chain issues. To build resilience, we may see locally produced goods begin to recover.
So then, how do I think these changes will affect the property market? Well let’s break it down.
London & other city centres
Verdict: Prices will go down.
I think that people will slowly start to move from city locations to smaller towns or countrysides. Out of preference more than anything else I think. We’ve seen parks & public spaces fill up with people more than ever before in recent times. With the ability to work from home taking away the necessity to work / live in a city, demand will go down.
Also, don’t forget the stamp duty changes affecting foreign investors which comes into force in April 2021 – Foreign investment is likely to go down too as a result.
Verdict: Prices will go up.
If people are leaving city locations, they need somewhere to go to. Demand is going to increase in small towns and rural locations.
Not only that, but I think the holiday letting industry is likely to see a surge. Investors may well start looking to capitalise on the UK holiday market. I know it’s certainly something i’m considering for my next investment!
The North / South divide
Verdict: Prices between the two will somewhat stabilise.
I don’t think we will ever see a truly equalised level, the south will always be more expensive than the north. But, I do think the divide will somewhat lessen. Especially around London and commutable county locations. Why? Because there’s less of a need to be there now that working from home is becoming more normalised.
Verdict: High street units will reduce, as occupancy decreases we will see more conversions to residential property. Out of town units/warehouses though? Prices will go up.
This largely stems from my predictions on the high street and UK manufacturing. I’m no commercial property expert though – but if I were a gambling man (which surely most property investors are!?) Then this would be my bet.
There we have it, my property market predictions. Don’t forget to let me know what you think!