The Future of Property Demand in the UK
Sheree Foy, founder of Source Harrogate, has told the Yorkshire Post her predictions for the future of property demand in the UK.
Firstly, she dismissed ideas that Brexit will have a long term effect. On the supply side, she says, not a great deal will change. Demand, however, may be affected. Growth forecasts show reductions over the next two years, and there are rumours amongst financial analysts of a 50-50 chance of recession.
Along with base rate reductions by the Bank of England to a record low of 0.25%, cheaper mortgage rates, and the prospect of further interest rate plummets, property demand may be a bigger issue.
But Foy is less interested in these matters, looking to the longer term.
So what are the big issues around property demand in coming decades?
Property Demand by Demographics
Over the next ten years, we will see a significant rise in the over 65 age group, combined with a dramatic rise in over 85s. One in five people in the UK right now will live to see their 100th birthday, according to the Department of Work and Pensions.
From this, Foy predicts a rise in property demand for bungalows, and other homes suitable for later life living. Foy labels these properties as “rare asset[s] with a guaranteed increase in demand” – and notes that those who plan ahead with their investments to meet this upcoming property demand are set to reap rewards.
Homes with smaller gardens, close to towns, with adapted kitchens and bathrooms, are all winners.
Property Demand by Location
Over the last ten years, farming has become increasingly more automated, leading to an inward flow to towns, which are more attractive than ever.
On the other hand, public transport is becoming less available, with journey times taking longer and longer. Without a drastic overhaul of the public transport network, property demand in cities and towns could continue to rise.
Nonetheless, Foy is banking on a return to the country facilitated by technology. Better broadband connections and speeds are making home working an increasingly available option for many, whilst the predicted adoption of driverless cars in coming years will also relieve much of the strain of commuting. With this eventuality on the horizon, country living could equally be set to rise in popularity.
Property Demand By Energy
As we move further away from dependence on huge power stations in favour of multiple source and sustainable energy sources, EPCs (Energy Performance Certificates) are set to become crucially important to the desirability of a property.
More locally generated power, from solar powers to wind turbines, are growing in use in domestic settings. Homes with adverse EPCs, Foy states, just aren’t selling like they used to.
To increase the desirability of your property, Foy recommends staying on top of energy efficiency in the home. Replace old boilers, insulate walls and roof spaces, double/triple glaze those windows, and look into home power generation options.
Planning ahead for future property demand is a key factor to take into account when investing in property. Choose your weapons wisely, and build a portfolio that will stand the test of time.