Five market trends property professionals need to know in 2021
The UK property market has been unexpectedly resilient over the last 12 months, with house prices rising by 7.3% last year on average despite the economic crisis caused by the pandemic.
However, the fluidity of the ever changing market leaves prospective buyers and estate agents constantly adapting their approach.
With this in mind, anti-money laundering specialists, SmartSearch, has teamed up with Pete Mugleston, managing director and mortgage expert for Online Mortgage Advisor, to reveal five likely changes in the UK housing market over the coming months and what they mean for property professionals.
1. The introduction of mortgage passports
Mortgage passports allow people to skip several steps of the process of applying for a mortgage when purchasing numerous properties. The process of creating a validated profile in order to buy and sell property quickly will make the adoption of an online ID and address verification checks essential.
This will require close collaboration between stakeholders across the mortgage industry to endorse a standard, which can then be made universally available to help lenders and brokers update their processes. If security and verification checks become fully digital, this will unlock a truly end-to-end, frictionless mortgage process and strengthen the efficiency of AML checks. Such processes are quicker and easier than manual checks, but also much more reliable, as they can validate documents with information from major data suppliers.
Pete says: “Mortgage passports will be especially useful to those who regularly purchase new properties, and for those investing in buy-to-lets. It’s a great opportunity to streamline the mortgage application process that will save a lot of people a lot of time.”
2. Buying a property online
Undoubtedly, Coronavirus has changed the way properties are being viewed. Government restrictions aimed at tackling the spread of Covid have resulted in home seekers turning to the internet and conducting virtual tours rather than arranging face to face visits with estate agents.
Electronic identification is widely recognised as the most reliable, secure and efficient source of information for identity solutions and will eventually rid the need for manual checks that are open to human error. Property managers and estate agents can use services from the likes of SmartSearch, where they can do all anti-money laundering checks and searches, validate documents and make electronic identification verification quick and easy.
Pete expects this trend to continue to grow as buyers welcome a more streamlined process: “It will come as no surprise if we eventually got to the point where we are able to buy a property at the click of the button. We could progress to one click mortgages and even having a button on property pages that will take you through to ‘buy it now’.”
3. Catering for all customers
Pete says: “Right now, there are a lot of mortgage brokerages operating in the UK and many of them are small operations specialising in niche customers. I think the market is beginning to appreciate the importance of catering for all customers, and as a result, we’re likely to see a smaller number of brokerages going forward, but the ones which continue to thrive are likely to grow and cover more areas of lending.”
4. The demand for rural areas
The shift to working from home has created a huge demand among home seekers to rent or buy properties in rural areas, as opposed to flats and houses in city locations. There has been a 14.2% increase in the price of rural properties between 2020 and 2021 as the coronavirus pandemic increased demand for properties in rural areas. This trend will have a significant impact on the property market and could influence the pricing trends across the country.
Pete says: “The shift in attitudes that we saw during the pandemic and lockdowns appear to be here to stay. People are moving away from inner cities and trading accessibility for more space, gardens, and beautiful scenery. With people being able to work from home, they no longer feel the need to pay the high prices for inner city living and can get themselves a bigger property elsewhere for a lower cost.”
5. The drop of house prices
With Britain’s economic recovery and the end of the Stamp Duty Holiday looming, we may begin to see house prices dipping this year, with the return of the usual tax rates likely to have an impact on demand from Brits looking to buy.
Pete adds: “The growth of house prices at this current rate is unlikely to be sustainable in the long term, so as the UK takes further steps to getting back to normal, it’s likely that we will also see the industry stabilise and dip during the summer.”
John Dobson, CEO at SmartSearch, said:
“With the economy on the way to recovery and following the end of the government furlough scheme this year, we will hopefully find a more sustainable future for the property market, with a tentative rise in mortgage lending and decreased house prices.
“The pandemic has definitely had an impact on the way we look at things. The disruption has paved the way for new technological solutions in the house buying processes, such as electronic identity checks, along with increasing customer demand for fast and reliable end-to-end service. These changes have altered the property landscape forever, so it’s important that estate agents and property professionals can keep up to continue offering quality service to their clients.”
To find out more about property trends and potential changes, please visit: https://www.smartsearch.com/resources/blog.
Kindly shared by SmartSearch