2024-01-17 16:19:39
According to real estate website Rightmove, the typical asking price for a UK property is now £359,748, which is 0.7 per cent lower than last year.
The number of new homes for sale on the market is 15 percent higher than it was at this time in 2023, which exceeds the 5 percent increase in demand from buyers, according to Sky News.
While the inflation that dominated last year appears to be easing, the site notes that high interest rates and the cost of living crisis are still impacting purchasing power.
According to Rightmove property director Tim Bannister, more new sellers are entering the market now with more confident prices, adding: “Although the increased level of buyer activity we are also seeing may justify some of this increased price confidence on the part of sellers, it is “The important thing is that sellers who are keen to find a buyer do not get carried away by the New Year’s excitement when setting their prices (price forecasts).”
- Interest from potential buyers was highest in London and the North East of England during the first week of January.
- Estate agents say they have seen an uptick in valuations and viewings, as potential buyers also assess what they can afford.
Properties under £1 million
For his part, the CEO of the Corum Center for Strategic Studies in London, Tariq Al-Rifai, indicated in exclusive statements to the “Eqtisad Sky News Arabia” website that the real estate sector in the United Kingdom is “somewhat different from its counterparts in other real estate markets,” and is divided into two parts: The first: “The market is above one million pounds sterling,” and the second: “below one million pounds sterling.”
He added in exclusive statements to the “Eqtisad Sky News Arabia” website: The market for homes above one million pounds is constantly rising and remains strong. Due to wealthy investors and investors from abroad, and conversely for the sub-£1 million market, it is a weak market and is more affected by the weakness of the British economy, as well as interest rate rises.
He confirms that this sector (below one million pounds sterling) represents the housing real estate sector in Britain, and it is likely that this weakness will continue during the current year 2024, even if the Bank of England resorts to lowering the interest rate, and this is due to two main reasons, which are:
- Record highs in the inflation rate in Britain during the past two years. The inflation rate has also decreased but is still historically high, and this is also a major pressure on wage growth. Wage growth is rising at a rate lower than the inflation rate, which in turn has put pressure on the ability of the British consumer to purchase these properties.
- On the other hand, we are talking regarding commercial real estate. It is also in a weak position, due to the slowdown in the British economy, the weakness of the consumer, as well as the rise in interest rates. The only promising sector is the residential sector above one million pounds sterling.
Returning to the Sky News report, Paul Baylis, of Square Room Estate Agents in Lancashire, was quoted as saying: “We are also beginning to see the return of large companies who are now more confident in obtaining a larger mortgage.”
Meanwhile, real estate consultancy Knight Frank said it now expects house prices to rise by 3 percent in 2024. Until last October, the company had expected prices to fall by 4 percent this year.
The revised forecast comes amid growing confidence that the Bank of England will cut interest rates several times in the coming months as inflation declines.
A difficult year
In contrast to these updated estimates, economist Anwar Al-Qasim says that the real estate market in Britain may have a difficult year ahead of it. Most forecasts point to a possible new decline in prices, and average home prices will decline as competition between sellers increases.
He explained in exclusive statements to the “Eqtisad Sky News Arabia” website that “Rightmove”, the largest real estate website in Britain, believes that sellers are likely to have to set more competitive prices to secure a buyer this year, but mortgage rates will stabilize, although they will remain high as the… The real estate market is facing dramatically rising mortgage costs and the cost of living.
He added: “The number of sellers who were forced to reduce the asking price during the past year rose to 39 percent, and it may rise an additional 10 percent this year,” according to those aforementioned estimates, pointing out that many foreign and Arab investors prefer the real estate market in Britain because of its attractiveness and profits. It is not available in many other countries.
He also stresses that what keeps this market intact is the limited supply of housing in the market and the inability of the government and the private sector to keep pace with the increased demand by building housing units to accommodate the high internal demand. There is a need for more than 300,000 housing units that the market needs, which leads to pressure on rental prices, which have doubled for this reason,” indicating at the same time that the government is considering imposing some additional taxes on foreign investors in the real estate sector, following it found thousands of housing units owned by Foreigners remain empty despite the urgent need to provide real estate at acceptable prices for large sectors of employees and workers in the state.
Al-Qassim goes on to analyze the reality of the real estate sector, which he shared with the “Eqtisad Sky News Arabia” website, saying: The British real estate market is subject to the law of supply and demand, in addition to several internal economic factors, in addition to the general elections, which may bring the Labor Party to power, which is historically known for facilitating Owning apartments and facilitating buying and selling procedures.
High interest
Also from London, a member of the British Labor Party, Mustafa Rajab, points out in statements to the “Eqtisad Sky News Arabia” website that the real estate sector in Britain, despite being one of the largest and most secure investment factors within the United Kingdom, was greatly affected last year. Due to several factors; Among them is the rise in interest rates, which stands in the way of increasing purchasing rates, especially for first-time buyers.
He added: “Bank conditions also contributed to the decline in the rate of real estate purchases, in addition to the rise in living expenses during the recent period,” expecting, in the same context, that the rate of real estate purchases in the current year 2024 will also decline by a rate that may reach 9 percent, while specialists expect purchase rates to rise. At the beginning of the year 2025, following the Bank of England hints regarding reducing interest rates by the end of 2024.
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