Housing Market Resilience Births Creativity in First Time Home Buyers

Housing Market Resilience Births Creativity in First Time Home Buyers

The housing market has proved to be resilient in the last decade. Even when forecasters expect the worse and forecast gloom and doom, the housing market emerges as the hero in the role to save our economy. The impact of the pandemic was an unknown. With lockdowns and everyone forced to take on a new reality such as working, learning, eating, getting fit, and entertaining only from one’s home, it would have seemed in focus to forecast a slowed housing market, but yet buyers showed up and broke housing market records.

The pandemic actually caused reevaluation of one’s dwelling and lifestyle. The city life was no longer shiny, busy, and exciting and pulsating with opportunity. Instead, it felt isolating and constricting and the accepted tighter confines of city homes made lockdowns feel unbearable.

Thus began what has been dubbed The Race for Space. Renters and homeowners started seeking out homes with more room in areas that had more resources including green spaces. The country living lifestyle with plenty of available homes full of extra space became the most sought after home life. Those homes were much more affordable in comparison to city homes and that spurred demand as well. Renters were discovering they could become a homeowner, be invested in property, and escape the budget killing high rents of city life.

The pandemic also caused historic low interest rates as the Bank of England responded with the cut to the lowest in over 300 years standard base interest rate of 0.1%. At such cheap borrowing, it could seem poor financial strategy to not take a look at buying a home.

People bought homes and a lot of them. Online property listers made it possible to shop for a home during lockdowns. Hopeful home buyers could tour homes virtually though videos or through personal streaming sessions with agents. The pandemic lockdowns invoked restrictions, but home buyers used technology to stay in the market, and as demand increased buyers became more assertive to find their pandemic lifestyle dream home and buy before someone else did.

Demand outpaced supply and asking prices increased. According to the Office for National Statistics, the average house price is now £270,000. Despite the continued offerings of low interest rates, many first time home buyers are shut out of the market due to costs. Even with schemes to help first time buyers, without new affordable homes coming onto the market, there just isn’t a choice available. 

Even starter houses that could be fixed up with sweat equity from the new home owners are not really an easy option as in years past. Construction costs and supplies are making fixing up a home more expensive. The pandemic has made it difficult to not only book professional help to do construction or improvements, but to get supplies.

There are some home buyers that are finding creative ways to stay in the market. Many are seeking jobs that allow them to work from home and that allows them to shop for homes further from high employment areas in the UK. Others are buying homes perhaps too big for them and are converting the homes to take on renters and are living in the smaller area of the home until they have saved and paid off more of the mortgage. Some are going in with older family members and buying a home in which generations of the family can live together and share expenses. Quick searches online will reveal other home buyer life hacks that are helping young people get onto the property ladder.

Experts are worried that eventually house prices will rise to a point where interest dwindles and it could happen at the same time that interest rates begin to rise. It could cause a swift decrease in the volume of sales within the market. However, there are very optimistic outlooks from many experts of continued growth in the housing market over the next two years.

There are always factors at play that could influence the market and the new omicron variant of Covid-19 is one, as well as a supply chain that looks to be coming untangled in the months ahead. There are also talks of other government incentives that could help make home ownership a reality for first time buyers, especially young adults.

Overall, most expect the housing market to continue to thrive mainly because pandemic or not, a new desire in lifestyles has set in and the trend to have a more balanced work life has become the top priority for all ages and a common component of that lifestyle includes home ownership.

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