Predictions forecast what may happen in the future – not what will happen. Sometimes they are forced to change. At the beginning of the year, the property market in the UK looked like it would slump in the second quarter. However, the extension of the SDLT holiday till the end of June, with a phasing out process till the end of September 2021, has altered this prediction. All real estate agents, including the Estate Agents in Belsize Park expect the real estate to get better in the forthcoming months.
With the spring property boom and return of government schemes, the Letting Agents in Belsize Park are also looking forward to the return to normalcy with regard to the lettings market as well. A review of the following factors may help us understand the future of Real Estate this year.
SDLT holiday extension:
This will keep the property market on a relative high, with more people looking to benefit from the tax benefits. At the same time, with the delays in the process of documentation, some prospective buyers, especially new ones, are looking at whether they will meet the timeframe for completion of their applications. This may deter them from going forward. Once the “holiday” finally comes to an end, there may be a slump in the real estate sector in the last quarter of 2021.
Adaptation to end user:
The rollout of the Covid vaccine and hopeful return to a normal lifestyle may mean that offices, food and beverage outlets, entertainment centres will see a return to city life – but the properties will need to adapt from just functional spaces. For offices, employers will need to offer amenities for hygiene, safety, and high quality leisure facilities and workspaces to appeal to people going back to work. Where housing is concerned, with the lockdowns over the last year, more space and larger accommodation have become a necessity. The types of property will need to adapt to the end user’s requirements.
Industrial investment and Logistics:
The investment demand will continue to be strong, with foreign investors also coming under the SDLT holiday extension. Despite the proposed 2% surcharge for foreign investors with effect from April 2021, the property investment market continues to look secure. Logistic properties are more in demand. With the use of e-commerce and new technology, facilities to provide more space with additional storage rows and racks on walls, renovations to roofing and flooring will need to be done to handle the demand. Repurposing vacant retail units into homes and logistic properties is also likely.
Sustainability:
Both sellers/buyers and owner/tenants have become aware of the ESG (Environmental, Social and Governmental) factors required for property. Sustainability has become a necessity. The higher the sustainability values of a building, the higher the rent can be. For investors, securing green finance to protect the environment or manage the impact of the environment can also affect property value and price. Compliance with regulations and renewable energy technologies can impact sustainability credentials. The goal is to bring property to a carbon net-zero status, safeguarding against effects of future climate change risks.
Rental market:
The demand continues to be high and, with a possible return to routine life with offices, schools and universities reopening, the rental market in the cities, which has seen a low in recent times, looks as if it will improve. With the return of international travel, the requirement for properties for rent could be on the increase.
Contrarian investment:
It is predicted to continue, with investors going against market trends and buying when most investors are selling. Although risky, it can be rewarding as well but may take time for profits to be seen.
Healthcare market:
With health a priority, especially after the pandemic, the healthcare market has seen a boom – not only with hospitals and care homes but also with speciality health centres and children’s homes. It has become popular with REITs (Real Estate Investment Trusts) with many overseas investors as well.
Conclusion:
Though the future cannot be foreseen, it looks likely that the future of Real Estate in 2021 will remain solid and resilient. There may be a rebalance. With the year starting well, it seems likely to continue doing well for the next two quarters and a possible slump in the last quarter. However, we will have to wait and see what happens!
