While real estate players expressed great uncertainty, during our interview with Bernard McGowan, not many of them went too far in forecasting for their market. They disagreed on fundamental issues, ranging from questions about the possible rise of suburbanization to the uncertainty over the future of office buildings as we enter a new world of work. However, it is possible that the housing market has surpassed expectations. Despite the decline in the number of new homes commissioned in the second quarter of 2020 in London, according to UK real estate transaction statistics, they have since recovered and increased by 1% in the first nine months of the year compared to the same period in 2019.
It should be noted that interest rates are low both for private houses and for other types of housing. This could also affect luxury homeowners: 2018 saw a significant drop in luxury deals in London, 46% less than in 2014. Given the lack of a Brexit solution, homeowners interested in selling properties this year are likely wondering if they should act now, before March 29, or wait for the dust to settle. The answer will depend on your home selling needs and goals, analysts say, and the type of property you want to sell and where it is located.
“It’s all about where you are going and what you are going to do with the money. [from the sale]- said Becky Fatemi, director of the London real estate agency Rockstone. “If you are going to sell, you are not getting the best price for your property now, because there is a lot of ambiguity in the market.”
The London market is a very good property for new investors. Investment property owners may be better off renting out their homes until the consequences are clearer. McGowan added. But for sellers who can’t afford to wait, or for those looking to trade for a more valuable home, this might be the right time after all. Homeowners can get less than they bargained for. The purchase may also present great investment opportunities due to the cooling of major markets and the Help to Buy scheme, under which the UK government offers equity loans of up to 20% (and up to 40%). % In London).
“There will always be those who need to move, find a new job or because their family is expanding, and others who just want to move on, especially if they have found the perfect home,” he said. Bernard McGowan, landlord and market analyst. “Some will find this a good time to move. Mortgage rates are still at an all-time low, and purchase assistance is still available for new developments. “
Define your sales needs and goals
“Like all markets, the housing market doesn’t like uncertainty,” said Bernard McGowan. “Until we have more clarity about the UK’s future relationship with the European Union, we can expect the market to remain price sensitive and some households are postponing the move until later.”
In a 2019 PricewaterhouseCoopers Real Estate Report, 70% of surveyed real estate professionals said they expect a decline in international investment in UK real estate. The prospect of low return on investment and fewer buyers will convince some sellers to wait and see. Homeowners who don’t need to sell for the foreseeable future may find it more profitable for them to rent out their properties now, especially if they live in a particularly popular area of London.
“Our rental department has never been so busy. Buyers became tenants and sellers became owners, ”Bernards said. “There will always be a rental market because there won’t be enough real estate to meet demand, even if there is a massive exit.” Sellers in this situation should work with an experienced broker who has experience of making deals over multiple cycles of ownership and who has sold in times of uncertainty and market downturns. They also need to prepare to sell for less than they expected, but there may be something positive about buying.
“This is a good time to sell if you are improving your ownership,” Fatemi said. “You may have 20% return on what you could get in a stronger market, but if you increase the size of the property, that 20% savings on purchase is much higher.”
“These properties are predominantly one- or two-bedroom apartments in new developments and are located in areas of the capital that defy the upward trend in house prices,” said Guy Bradshaw, head of residential sales at Sotheby’s International Realty. “Covent Garden is a great example of this. Prices have risen more than 30% last year and the luxury student market offers the potential for stable rental income and high returns for investors. “
While foreign investment in major UK properties is expected to decline, there are areas that will continue to be in demand by local buyers. “There are areas outside of central London that have been hit hard,” Bernard McGowan said. “The market for the country is moving very slowly because no one invests in holiday homes. Stamp duty has greatly reduced the market. “
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