UK New Property Supply Falls and Buyers Grow

UK Housing Market

The housing markets in the UK revived from a year-long pause where the demand for homes in the top range in the prime areas is improving. However, the buyers invest in all price ranges; the sellers are hesitant because of political factors. Yet, the number of purchasers expanded by 21 per cent in the year to May, indicating sellers are profiting from the lopsidedness made by flexibility and higher bids. 

The North-South partition broadly influences the UK property sector, and one can find its impact in all bids, whereas the value keeps advancing towards the North. 

According to a site's new postings (home.co.uk), 61,775 new properties were available to be purchased in June, down from 70,775 a year ago.

The figure finds a decrease in the month-to-month premise by 1.9 per cent. The exploration by Housesimple finds the rundown was overwhelmed by the vendors from the North, and merchants made the highest number of new postings from Bootle and Bolton.

The Impact of Brexit on The Real Estate Markets

Brexit will amend the supply chains in the construction sector in areas like labour and goods. In addition, there are many other challenges the builders will have to face that can lead to delays in the completion of projects by up to 60 per cent, mainly due to the inconsistent supply of building material. 

Experts claim the issues may be similar to those during the financial slump –when several buyers were interested in getting a home under the Help-to-buy scheme, and people had deposits for homes. Regardless, it became difficult for the builders to deliver projects due to difficulty getting bricks.

Some construction firms stockpiled material in anticipation of shortage, and some used alternative materials like plasterboard. In addition, the industry will face a skill shortage as several foreign investors and workers are returning home as they can earn more at home.

The political uncertainty and skill shortage are weighing on the builders. The first quarter of the year started with the development of 36,630 new build dwellings with a fall of 9 per cent, in comparison to the last three months as per the government figure. 

The developments in the new starts have been low, while the current trends look like a potential issue in the real estate markets.

The government planned to supply 300,000 homes in a year by 2020, but the data from the IHS Markit show the construction fell to one of the weakest in ten years, and the government is preparing to use non-traditional methods to construct homes.

Recently, the project by a Japanese developer was sanctioned by Homes England, where they plan to deliver modular homes to handle the supply housing shortage.

Data suggests the government will not be able to achieve the target of 300,000 homes by 2020, and wrong housing at the wrong locations can risk buildings; on the other hand, the sellers are hindered by the uncertainties created by Brexit and related issues like economic performance and change in market trends.

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