The UK housing market might continue falling until 2025, experts believe

The housing market problems might’ve been one of the most unpleasant situations after the pandemic because it experienced a considerable boom while the living cost increased as well. The housing crisis offered no other choice for people than to move in with their parents or rent flats because buying a house or even affording a mortgage is far from a regular person’s budget. 

After the Covid-19 pandemic, the rising interest rates triggered mortgage rates to escalate. This momentum has only worsened the actual market conditions in the UK because the past decades were one of the most damaging in terms of rising housing costs. 

However, it has recently been observed that housing prices are taking a downward direction, which is expected to extend until somewhere around 2025 due to a trend in mortgage lender drops. 

Lloyds Banking Group makes serious prediction about the housing market 

Lloyds Banking Group is one of the largest UK financial services providers that owns the most prominent mortgage provider in Britain. Hence, the predictions are based on recent trends and the market’s development over the past years. The company forecasts that the housing crisis is slowing down, so people should plan a house purchase until 2025 when the costs will increase yet again. 

However, it might be that customers' wants and needs change with time, meaning that sellers should get better at decorating the new house. There are a few important aspects of a building that attract owners, such as the following:

  • The curb appeal must be clean, painted and have an overall fresh look;

  • A simple hotel makeover can change the course of the house viewing;

  • A clean and roomy kitchen is best, so maybe switch to solid wood kitchens instead for more value;

  • A quick floor treatment, such as waxing or staining, will give the impression of a new home;

  • Decluttering and depersonalising the home is essential to encourage people to have their own view of the interior design;

The decreasing housing prices are the effect of lower demand 

Right before the pandemic, when the housing market was in severe crisis, financial experts believed the situation was due to an incredibly high demand and low supply. The number of properties for sale was considerably lower compared to 2020, along with places to rent, so even tenants were challenged in their search for a place to stay. 

Of course, the causes are rooted deep in the UK’s recent history. As the country experienced Brexit negotiations and the election of Boris Johnson had an effect on the prospective tax, buyers boosted the market right away, after which demand for housing increased considerably. Moreover, people’s wants changed, with customers wishing for bigger houses that could be transformed into home offices since most were working from home now. Hence, there was a 

significant difference between buyer’s expectations and the supply on the market. 

Considering that the supply chain was hit by the pandemic, which slowed down construction work, new houses were scarce, while fixing flats was as tricky with the lack of materials necessary. This made many places unsaleable. 

What should buyers and sellers do during a housing market crisis?

Preparing for a housing bubble is difficult for both buyers and sellers. That’s because no one is ready to face the sudden changes in the market and adapt as fast as possible. However, there are ways to get through this situation. 

Homebuyers must research and educate themselves constantly in order to grasp the housing bubble issue. This is a considerable contributing factor in being financially ready to secure a mortgage on proper terms despite the market downturn. Of course, chances of getting a new house are in direct relation with a long-term perspective where people evaluate their affordability in regard to the new home. 

When it comes to home sellers, the standard of being successful involves monitoring the market’s conditions as often as possible. According to the fast-changing indicators of price growth, inventory and demand decline are a must for setting up expectations. Keeping an eye on the market also ensures a realistic price, which is something many homebuyers are looking for. 

Having standard prices won’t hinder you from being prepared for market shifts because you’ll only have to change the selling strategy. Staging the house, negotiating and being open to more viewers will get you, as a home seller, increased satisfaction in achieving your goal. 

The housing market will remain a highly competitive field

As the living cost increases significantly and there’s no light at the end of the tunnel, we should expect the housing market to remain as competitive as it was after the pandemic. Although houses might become more affordable in a few years, upcoming economic and financial challenges will always trigger a market crash.

The world is changing, and prices will never go back to what they were before as living standards change. Therefore, both sellers and buyers should get used to the market instability and get ready for any significant shift. Sellers should indeed change their approach and consider that trends change, while buyers need to save up as much as possible and become good negotiators. The mortgage rate might be better now, but it can always suddenly increase. 

Despite the challenges, the housing market will remain highly competitive because the high demand from a year ago has to be fulfilled, making people buy houses and pay their mortgage rates more eagerly than ever. Moreover, since there are a few signs of market rebalancing, demand might experience a sudden spike because buyers will do anything to achieve their goal until rates increase again. 

Final considerations 

Lloyds Banking Group, one of the biggest mortgage providers in the UK, spoke about the changing market that will last until around 2025 when the decreasing prices and low mortgage rates will boom again. Therefore, buyers and sellers must be prepared for this short period when the market is somewhat stable and gather financial and developing resources in order to face other possible crises.