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Each year we cycle through four seasons, putting up with freezing rain for weeks, and later making the most of the sunshine and heat. But many of us fail to realise that the property market gets affected by changing seasons too.
This isn’t only to do with shifting temperatures though; there are many factors that influence the housing market that come in cycles year after year. Anyone interested in buying or selling property needs to be aware of these multiple factors, as they can make a huge difference in terms of property prices and how easy it is to buy and sell.
General Trends in The Housing Market
The past two years in the housing market have been chaotic, to say the least. Regular trends got scrapped as homeowners and agents scrambled to keep themselves afloat by any means possible. Property prices in the UK have risen steadily since 2010. And while growth slowed down around the 2016 referendum concerning UK’s relationship with the EU, the final confirmation of Brexit was expected to stimulate the market once again.
Pundits have predicted that 2022 will see continued growth in the property market, with demand by buyers possibly outweighing supply.
These trends have been the result of many different factors. Even during a single calendar year, a large number of determinants influence the housing market. Each year buyers and sellers alike base their decisions on what is happening in real time. Different regions experience different influences, but there are generally a few factors that apply across the board.
For landlords who want to make the most out of a property investment, the following trends are important to take note of.
1. The Holidays
In the UK, two Christian public holidays are generally observed. Easter in early April, and the Christmas/New Year season from mid-December until early January. Many people take leave over the Christmas period, resulting in a slowing of the property market that generally lasts over the entire November and into January. Easter, on the other hand, is not typically a large event and does not have a noticeable effect on property buying and selling.
Having time off from work might seem like the perfect time to get stuck into your plans of buying or selling property. But in reality, very few people are willing to devote their Christmas holidays to the stress of putting their home on the market or starting to look for a new one.
In the UK, the Christmas period is also the coldest and wettest. Grey, rainy weather isn’t exactly a picturesque background for showing property, so trying to make a house look its best comes with additional challenges.
2. School Year and Academic Calendar
This factor applies mainly to parents and anyone who works in education. The longest school holidays in the UK are in summer, around the July to September period. This typically coincides with an uptick in the property market as parents take the opportunity to move house before the next school year begins. Drier and sunnier weather also makes for easier moving.
The issue of school boundaries can play a big role in the selling and buying of property. For parents who want to transfer their children to a different school, it can be imperative to move before the end of the summer holidays. Studies have even shown that those without children consider school boundaries when they decide to move.
While parents often want to move to a specific school attendance zone, non-parents sometimes avoid these areas due to taxes and congestion. The result of this is that people can generally get a better deal if they sell before the end of summer.
3. Weather
The weather factor depends quite a lot on your location. Looking at the UK, it’s clear that winter is a time to cuddle up at home. Unlike some places, where winter means snowboarding and soaking in hot springs.
A house’s features should be taken into account when putting it up for sale. This is obvious, but when it comes to weather, certain characteristics can get emphasized to make the property more attractive to buyers.
A house with a swimming pool would probably sell quicker in spring and summer. While a property with extensive indoor heating might appeal more in winter weather.
More Personal Factors – Individual Considerations
The three factors mentioned above go a long way to determine the state of the property market. However, there are many other smaller trends that probably don’t have as much of an effect, but still play a part in buying and selling.
Looking at property, liaising with agents and moving house are all time-consuming activities. During Christmas and New Year, statistics show that the property market slows down. In this period, people shift their focus to the festive season and spend their time with friends and family. When the 1st of January rolls around, some individuals are galvanized into action when they make new year’s resolutions about making a “new start”.
Taxes And Tax Breaks – Shifting Circumstances
Another consideration is the effect of the tax year/financial year on the housing market. In the UK the financial year begins on the 6th of April and wraps up 365 days later on April 5th. For people wanting to buy or sell property, waiting for a tax refund in early April can free up money and make purchases possible.
The tactic of buying and selling before the end of the previous financial year is also used by those who want to close on escrow.
The issue of Stamp Duty Land Tax (SDLT) also plays a big part in directing the market trends—especially since the arrival of COVID-19. England and Northern Ireland enjoyed a tax break put in place by the government to help the property market during COVID, but this move came to an end in October 2021. The result of this was a drastic drop in buying and selling houses
Regarding taxation and tax breaks, things seem to be up in the air. Whether or not the property market grows in 2022, it’s a fact that the pandemic could throw things out of balance at any point. Even so, understanding the seasonal property trends is vital for landlords who want to profit from their properties.
