8 Real Estate Trends Influencing Your Business Now

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real estate trend

The health of the housing market provides great insight into the functioning of a country’s economy because housing is a basic necessity. Research conducted by the National Housing Conference (NHC) found that housing was an average household’s biggest expense, contributing 22% to the total expenditure.

It is no wonder that the housing market is key and that trends prevalent in the real estate sector impact every other sector of the economy. Monthly mortgage payments or rents determine how much a consumer is willing to spend. Similarly, it also impacts the amount of work people are willing to do since many individuals must work more than one job so they can afford rent or pay the month’s mortgage. (Economics Observatory)

Businesses are also directly impacted by real estate trends as consumers make decisions based on their expenses. Additionally, business owners must bear the cost of rent, which, much like with individuals, is usually a significant share of the total expense incurred.

Major Real Estate Trends Impacting Businesses

Here are eight of the most common trends that have been witnessed in the real estate market in the UK and what each of these trends mean for businesses:

Stability in the Real Estate Market 

The real estate market in the UK has been robust conventionally. Real estate investments have always been popular among local and foreign investors. For instance, foreign investment in real estate grew by 180% over the last ten years.

However, during and after COVID-19, the property boom did cool down. Property prices have since stagnated, and there are indications that the market is on its way to recovery. Still, individuals are opting to buy rather than rent properties. 

The real estate outlook remains positive despite a downturn during COVID-19. Things are slowly going back to normal. 

Buyer Demographic

Property buyers are typically older. 35.6% of adults aged 65 and over own property, while this figure is 19.6% and 19% for those aged between 55 and 64 years and 45 to 54 years, respectively.

The high cost of property means that people of a certain age can buy and own property. The elderly usually save money for years before they can become property owners. Rental properties remain quite popular among the younger generation.

Location, Location, Location

It may sound overused, but it is true. Location is among the main determinants of real estate prices, no matter where you go. Property prices vary depending on the location since the typical rules of supply and demand bind the real estate sector. This means more densely populated areas are in greater demand, so those prices are higher.

The average cost of a property in London is £516,900, compared to the nationwide average of £261,100. London is among the largest cities in the world and is a major business and financial hub, which explains why property prices are nearly double those in any other place in the UK. 

Increased Impact of Technology

Technology has impacted every aspect of life, and the real estate sector is no exception. As more buyers use online platforms to search for properties, the sector has had to incorporate technology to remain competitive.

In addition to using technology to look for properties to buy or rent online, homeowners or potential homeowners are demanding houses with incorporated technologies. Smart homes with multifaceted security systems and technologies that improve efficiency have become increasingly popular.

Technology adds convenience and reduces the long-term cost of operating a house. Additionally, technologies such as close-circuit cameras or ring cameras improve safety. Spending on technology to improve a home’s efficiency and safety is considered an investment that homeowners are willing to make.

Preference for Modern Homes

New-built are preferred to older properties. Even with renovations, older properties are less attractive to buyers due to several different factors. It is much easier to integrate modern technology with new-built properties most recently built homes come with these technologies in place as they have become an industry standard.

Older properties are also less efficient, and updating them requires time and money that most buyers are willing to save, even if it involves spending more money. Renovating old properties and updating them to modern standards is not feasible for many.

Greater Emphasis on Safety and Security

Safety and security have always been a priority and have become even more so in recent decades. Add to this regulatory requirements, such as getting a gas safety inspection for rental and commercial properties, there is high demand for homes with the most safety features.

Homeowners are taking extra measures to secure their homes against accidents, burglaries, natural disasters, and other unforeseeable situations. Nobody wants to live under constant threat or the possibility of hazardous accidents that can harm them or their family. Homes with a robust security system in place are seen as more attractive.

Shift Towards Eco-Friendly Housing

People have become more environmentally conscious and are seeking to reduce their impact on nature as much as possible. Aside from conservation, there is an intentional drive towards cutting back costs, particularly energy. This is why eco-friendly housing has gained popularity over the past few years. 

Eco-friendly housing uses materials and technologies that help to keep houses insulated and reduce energy requirements. Technology is also vital to eco-friendly properties since it improves efficiency levels, like regulating the temperature inside the home.

Multi-functional Living Spaces

Rising property prices have also shifted the trend towards more versatile living spaces. In addition, many individuals have started to work from home post-pandemic. With people spending more and more time indoors, it is only natural that they want to make the most of a limited space.

Multi-functional properties are highly favored by homeowners who want the same space to become a home office, a guest room, or an entertainment room as and when required. 

Businesses and the Real Estate Sector

The real estate sector is subject to the same ebbs and flows as every other sector of the economy. There is an upward trend, a peak, a downward trend, and a trough, after which the upward trend or recovery begins again. 

Yet, the real estate sector is unique because it is a major indicator of an economy’s well-being. The prevailing trends impact most businesses, even those that are not directly related to the real estate industry. Being cognizant of the real estate market is important for any business.

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