If you have been following housing property trends in the last few years, you might have noticed the uncertainty in the mortgage industry. This is especially after the energy costs like that of gas and electricity have seen a historic rise recently. But does the volatility of energy prices affect the market trends in the housing industry? You never know.
You can still consider buying properties in well-connected cities like Chesham. It is located in Buckinghamshire and is known for its low crime rates, which makes it an ideal place to invest in. If you want to know more about the availability and rates, contact Professional Estate Agents in Berkhamsted. But remember to have thorough research on the locality, and current and potential property value before you make an informed decision. The article can be of much assistance as it sums up the fluctuations in the fuel and electricity sector and how they impact consumer and seller preferences in housing properties.
Why is the energy cost rising?
Although there has been an evident price rise in energy resources before, the Russian war on Ukraine has a massive contribution to the currently increasing energy price ranges. Because of this, the imports of oil, gas and coal to the UK have ceased to function. Gas suppliers face a 250% increase in their prices. The tremendous surge is imposed on the customers during their purchase. The current gas price per gallon in the UK surpassed £1.82 a litre, the highest recorded so far. Also, the companies that are looking to manufacture energy are in a situation to pay more prices to buy electricity and gas.
Not just the industries related to energy resources, but also services and goods-based Companies are bearing the brunt of gas and electricity price inflation because of their need to consume more energy in the production process. Moreover, households are looking for cost-effective gas consumption options because of the upcoming winter season. It is during these times that increased utilisation of energy takes place in houses.
Impact on Housing markets
According to a 2020 report, over 38% of the population uses energy for heating purposes. This is the scenario of every household. The buyer preferences are also based on the living conditions in a property. That way, an annual extra budget exceeding £2,000 exclusively for energy consumption is a huge price to pay. Since the energy supplier contract in the UK works as a 12-month agreement, the sudden increase in prices especially during the contract expiry can lead to expensive charges on renewal.
The good news is that there has been no direct association between gas price inflation and housing options. However, buyers prioritise the cost of living crisis, when investing in a housing property. The low supply and high demand circumstance in the UK, a consequence of a 19% increase in home prices and a 12.6% rental rate surge in the last year alone, has certainly been crucial in buyers being sceptical of property purchases. Real estate prices are estimated to go through a dip in the future. But the uncertainty in the inflation trend is something to be considered.
Possible solutions to the imbalance
There have been measures to pump up the oil production overall so that the expense of gas resources might go down. Also, the government has recently come forward to offer £150 billion to mend the rising energy costs. An annual budget restriction of £2,500 is proposed to avoid uncertain bill fluctuations every few months. Although critics call these short-term solutions and they may exhibit long-term implications in the future, the demand for housing options is estimated to grow.
Energy bills are expected to be on an increasing trend at least for the next 18 months, so buyers or tenants looking for better housing options should consider investing in long-term energy conservation options like solar panels or heat pumps. If you are looking to buy, sell or mortgage a housing property, be wary of the inflation rates and how they can affect your property price value in the future. An expert agent can guide you through all the information you need for your next purchase.