Why are Cardiff property prices on the up?
Cardiff is known as one of the UK's friendliest cities. The city is known to have very wonderful and hospitable residents. And sitting on a somewhat bogus expanse of land, there is an ever-increasing quest for new residents to go in. The good thing is, there's room for all. Cardiff, like other Welsh cities, had a track record of housing residents at the cheapest of prices. However, a visible and bogus change in the trend crept in a couple of months, maybe years ago.
Even though the change wasn't unexpected in its entirety, the rate of change is the shocker to most. Prices of properties in Cardiff have been on the increase, and have been bothersome to residents, and new property seekers.
Zoopla, a renowned property expert, reported the average property price in Cardiff to be £258,382 as of January 2021. This figure denotes a 0.42% rise in the last 3 months and a 6.73% rise in the last 12 months. As we all know, the world was hit by a pandemic that had almost all businesses on the low side in the past year, and people in the business of properties are no exception. Coming out of the lockdown, businesses, real estate inclusive, started finding their feet slowly and steadily.
The pandemic surely has changed how we do business but is that a major factor in the increase in Cardiff property prices?
Factors influencing the increase in Cardiff property prices
One would wonder how the seemingly little things have pushed up the price of properties. Well, the little things aren't always so little in the real estate world. Find below a few of the contributing factors to the noticeable upward trend in the prices of properties in Cardiff.
Immigration
Besides the affected economy, one of the most convincing reasons for the increase in property prices in Cardiff is the increasing demand by people to move. Despite the pandemic, so many people are looking to move, and hence are seeking to get more and more properties. This increase in demand, over a long time has come to affect the asking price of properties. People who used to stay in budget homes are trying to step up, probably to get a bigger duplex or a big bungalow with large outdoor spaces. The pandemic has revealed how equally effective remote working can be as office work. Hence, people staying and working at home has led them to the compulsory expansion of their space to accommodate remote working.
Cardiff has witnessed more immigration recently than they have in the last few years. The City has enough space to go round, at a cost, though. This movement by present and to-be residents has put the price on the upside.
Quest For Extra Space
Property sellers in Cardiff say there has been an increase in the choice of apartments sorted for by residents recently. Rather than the usual minimalist bungalow with just enough space for everyday living, people more recently have been looking to get houses with extra space on the outside. There has been a matching price increase to meet the ever-increasing demand for these property types.
Home properties, before now, weren't known to buy extra big spaces. The new "nature of work" has however redefined people's taste in the property. Working remotely, homeschooling et cetera wasn't the order of the day a few years ago. It is only reasonable now to adjust accordingly.
The Movement To The Suburbs
The pandemic has put quite the attention of residents in the suburbs where they can live "peacefully" and have the city feeling without necessarily being in the middle of it. A few minutes’ drive into the city is no bother to residents as more and more people keep seeking to get properties in the suburb regions of Wales. This quest has led to a great boom in housing in the region and hence putting the prices on the uptrend.
A survey of homebuyers in the UK earlier this year revealed people's sudden interest in rural living due to the pandemic. Movers from various cities were interviewed and a whopping 53% of respondents from Cardiff prefer moving into the suburbs. There's arguably better nature there, lesser contact, and of course, more sanity.
The Brexit Deal
In 2019, the Cardiff property market had a setback because of the very many uncertainties surrounding the Brexit deal. The Commons voted the deal through in December 2020, and many predicted a boom in the property market since the government would be getting hands off some of the market support measures affecting the prices of properties. Of a truth, Cardiff after a series of downtime during the COVID-19 lockdown has been showing an upward trend in the housing and property niche. The uptrend, although predicted to be short-term, has been around for a while, and is expected to stay a little longer till there's a slow but steady U-turn on its effect on housing.
Stamp duty
Stamp duty is the tax you pay for transferring property. It applies to residential properties (houses, apartments) and nonresidential properties.
The government imposed a stamp duty holiday sometime in June 2020, wavering any tax on property purchases for residents. The stamp duty holiday was to help residents and property buyers whose businesses and finances were affected by the COVID-19 (Pretty much everyone). This means people could save a lot while buying more. Also, the low interest rates have afforded many the purchasing power for bigger and highly priced houses. However, the stamp duty holiday is being phased out, and asking prices on properties have been on the rise. More of the price rise is expected until a rebound point where it's just normal and prices are stabilized.
Conclusion
The continuous increase in Cardiff property prices has got many residents to worry. However, there have been major predictions that the prices are expected to start moving in a downward trend and that the prices should stabilize soon. These predictions are expected to start rolling in a few months. The Cardiff property market is expected to stabilize soon and hence, have the uptrend moderated.
