With another 50 days left to complete 2016, global real estate services provider JLL has brought out five interesting issues that are likely to mark the housing sector in the UK next year.
The report ‘UK Residential Forecasts’ identifies issues, such as Overseas Sales, Build to Rent, Space Standards, Affordable Housing, and Retirement Housing, to dominate the housing scenario in 2017 and majority of the players will more or less agree on the topics raised.
It is needless to say that the flow of international investment into the housing sector cannot be stopped. London remains the financial capital of Europe, and international investors see the potential for growth here. At the same time, there is no empirical data to prove that international investment has resulted in a negative impact on the housing sector in the UK. If the housing sector has to meet its commitment to deliver houses, including affordable homes, then it needs investments to underwrite the Developments.
The Build-to-Rent sector is suffering, as rent rates have increased across the UK. This can be attributed to the housing crisis, as less number of houses is entering the market while the demand for rented homes is increasing. Moreover, with housing become unaffordable, first-time homebuyers and young working professionals prefer rental homes, thereby contributing to demand for such housing.
Space standard has been one of the biggest concerns in the UK with landlords making the most of it to earn an extra income, particularly in London, where rent rates are high. Though the government has intervened time and again on defining the space for rental homes, there is scope for improvement.
Affordable housing is nowhere near the commitment made to the UK. Affordable housing cannot exist on its own without adequate investment required to underwrite the Development. Though there have been proposals to boost affordable housing, it is unlikely to meet the demand. Under such circumstances, it becomes imperative for the local authorities to come up with innovative housing models to ensure that their social housing goals are met. There is a need for creating a win-win situation in the affordable housing segment by involving the stakeholders concerned.
While the focus is on first-time home buyers for whom owning a house in the UK remains a dream, not much importance is given to retirement living. The need for retirement housing needs equal priority through policy and promotions.
2016 was marked by uncertainty in the middle of the year with the UK exiting the EU. However, the market is now recovering gradually and the UK property market continues to stabilise. As we enter 2017, it will be interesting to see how the housing sector gears up to face these five issues.
Source: Hamptons Market Research
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