It’s not always easy to make property market predictions. However, following a late general election and plans now in place for Brexit to go ahead, we can be a little clearer about what to expect for the property market in 2020.
The Brexit impact
With the country shrouded in uncertainty since the referendum in 2016, it’s understandable that many people have been cautious about buying or selling property.
We aren’t entirely sure about the government’s plans, however there is an assumption that Brexit will go ahead. We now have a more stable government in place that can forge on with plans.
This should bring more confidence in the market, and along with the typical spring time boost, a flurry of movement is on the cards. With a more buoyant property market, prices are likely to rise quickly again.
If you’ve been thinking about purchasing, then now may be a good time to make a move to try and beat the future price rises.
Interest rates could rise
The Bank of England Base rate has been below 1% for the last 10 years since the financial crash of 2008. We saw a modest rise to 0.75% in August 2018 but even so mortgage rates have remained historically low.
With the uncertainty removed around Brexit, the economy is expected to grow as a result. This may lead to a higher level of inflation, and if so the Bank of England are likely to increase interest rates to match
Whilst a rise in interest rates will see mortgages go up, it’s not expected to have a huge impact straight away. Lenders will likely keep rates as low as they can in order to compete for customers, as they wait for confidence to grow.
Environmental impact will come to the forefront
We are all becoming more conscious about climate change and the impact our lifestyle has on the environment. Our homes are responsible for around 15% of the UKs total greenhouse gas emissions according to recent statistics from the ONS.
Young home buyers are increasingly concerned about energy efficiency homes. Not only do they want to preserve their finances, but the impact on the environment as well.
If you are looking to put your home on the market in 2020, then it’s worth thinking about potential home improvements that could make it more appealing to the climate-conscious buyer.
Rents are increasing
With rental properties in demand, the price of rent is increasing. This will be music to the ears of landlords across the country. They have been hit with numerous penalties over recent years on buy-to-let properties, so this will allow them to make additional profits.
However it is certainly bad news for tenants who will be left out of pocket. This will likely have a knock on effect for first-time buyers in rented properties who are already struggling to save for a deposit. Along with rising house prices, 2020 could be a difficult time for them.
2020 will certainly be a mixed year for the property market. Increased political certainty is good news for the market. The election has created a more stable economy and the tories are expected to increase much-needed housing stock as outlined in their manifesto.
However, with a more difficult year ahead for first-time buyers, it will be interesting to see what announcements they have in their first official budget to help young buyers access the property market. The budget is due to take place on 11th March 2020 so watch this space for more updates.
The above post does not constitute advice – financial, legal or otherwise. The information within this article is the author’s own opinion and do not necessarily reflect the views of SO Media or So Smart Money.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.