The property market is very dependent on the economic climate and suffered greatly in the recession. While the market has recovered substantially in London and some hotspot areas, the future of the UK property market is uncertain and will continue to be susceptible to changes in economic conditions and several underlying factors listed below.
Future legislation could further tighten safety and quality standards. It is expected that the government could follow the 2008 Climate Act with further legislation to promote energy efficiency and sustainability.
The government's Draft National Planning Policy Framework (Department for Communities and Local Government, 2011) proposes a more flexible planning process and a 'presumption in favour of sustainable development'. A consultation is underway regarding the potential impact of these proposals.
Asset Skills identifies technology and innovation as a key driver in the property sector, particularly in relation to sustainability and limiting adverse environmental impact.
Renewable technologies will continue to be used to implement sustainable construction. Recent examples include advances in building materials and heating technologies.
Advances in IT are likely to continue to have an increasing influence on the industry. Professionals now use software developed specifically for construction and project management to record and store information, often on hand-held devices.
Estate agents are adapting to an increasing proportion of buyers using new media as the first step towards buying a property.
Underlying demographic factors will fuel property demand and highlight current housing shortages. The UK population is predicted to grow over coming years. The government has estimated that 240,000-270,000 new households are being formed each year (Money Observer, August 2011).
An increase in single person households is likely to continue to fuel demand for affordable housing and joint ownership schemes. The industry will have to respond to these changes by building smaller units for leasing.
Despite high levels of demand, people are continuing to struggle to buy property due to restricted lending and wage restraints. As a result, domestic rents continue to rise. Particularly outside London, former estate agents are increasingly involved in letting and management, property maintenance and repair.
The commercial market outside London shows little growth in prices or activity levels. Some developers are still being somewhat cautious in their approach to investing.
UK and EU commitments to reduce emissions are encouraging property companies to change from traditional to more environmentally friendly materials and practices, such as improved insulation and waste disposal.
Encouraged by consumer demand to reduce costs as well as environmental requirements, sustainability shall continue to be an important consideration for construction and property companies.
Asset Skills predicts that increased emphasis is likely to be placed on energy management and advisory skills during coming years (Property Tracker, 2011).
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