The residential market could see growth at its fastest rate since the housing crash with some in demand locations such as London and the South East seeing double digit price growth, according to predictions from Hatched, an online estate agent.
‘The UK property market is at the start of a new cycle, with sustained growth of between 6% and 8% per year predicted for the next five to 10 years, possibly even up to 12 years,’ said Adam Day, Hatched director.
But in 2015 he expects a slowdown in prices rises as interest rates are expected to start to rise which will have an impact on the property market. But Day said this is unlikely to be to the same degree as the credit crunch in 2007/2008.
‘We will see more of a slowdown in price rises, which will be what the market requires at this point to prevent it from overheating. A long term word of warning though, watch out for 2025/2026 when we predict the market will crash again as this has been the rough cycle for decades now,’ he explained.
‘Until the government gets to grips with speeding up planning permission, encouraging building on brown field sites, as well as some green field sites and forcing builders to build houses and not flats, then the market will only go one way. And that is up,’ he added.
He also predicts that online estate agents will grow in the next few years. They didn’t exist a decade a go and now have a market share of between 2% and 5%. Hatched’s market share alone has grown by 585% since July 2007.
‘We predict that online estate agents will grow to between 10% and 15% of the market by the end of 2015, with further significant market share being gained over the next five years. Between 60% and 70% of all properties will be listed by online estate agents by 2020, wiping out over 7,000 high street estate agency offices across the UK,’ he pointed out, adding that to counter this growth, high street estate agents will need to change.
He also believes there will be more private house sale online sites but he does not expect these sites to have a significant impact on the market as they still require access to the main property portals to find buyers.
‘We also predict that some big names in retail may try to become intermediaries due to the new changes to the Estate Agents Act. However, as with private house sale sites, the key to success is access to the big property portals which, for now anyway, will not be granted. That being said, for enough money the portals would likely change their minds. If this happened, it would blow the whole property market wide open and accelerate the demise of the high street agent even quicker than predicted,’ he explained.
He also said that the much anticipated arrival of the Agents' Mutual site could have a profound effect on the dominant position of the key property portals. ‘If Agents' Mutual's numbers are to be believed, then they are going to make a serious dent in one or other of the property portals subscriptions,’ he added.
