We’re living in a strange time at the moment. From face masks to PCR tests, there have been massive changes to how people live and operate. However, one thing that appears to have survived, perhaps even thrived, throughout the turbulence of the past few years is the UK property market.
In particular, for property investment, UK cities offer many benefits that could just provide any budding investor with exciting (and, more importantly, profitable) opportunities.
If you still need a bit more convincing, though, here’s just a few reasons why you should invest in UK property in 2021/2022.
Strong House Price Growth
Despite various experts predicting the worst, 2020 saw record-breaking rises for the housing market, which many expect to spill over into the coming years.
According to Savills, house price growth has seen a drop to 0.1% this September, down from the last month’s increase of 2.1%, making the annual UK price growth 10.0%.
However, whilst price growth is slowing, it’s also remaining strong, and, for the first time since the Global Financial Crisis, no local authority has seen house price falls during the year to June.
Additionally, UK property is likely to rise in price by 21.1% across the next five years, meaning the average house will increase from £230,920 to £279,644.
With markets furthest from London reaping the most robust yield from this (the Northwest with an estimate of +28.8%, for example), for those wanting to start investing in the UK, this is an excellent opportunity to potentially start building solid capital growth whilst also generating consistent rental returns.
Growing Demand for Property
The UK’s population is predicted to reach around 74 million people in the next 20 years. With more and more people bumping into each other, there’s a growing need for properties to house them. With this in mind, it’s clear that there is an ever-growing call for more housing within the market.
As the UK faced its first lockdown last year, many experts predicted a considerable drop in the market – anticipating a lack of demand and interest for the property.
However, this obviously was proven wrong, with 2020 seeing the aforementioned substantial rise of those wanting to buy or move into a new property.
Zoopla has reported that this demand will last well into 2022, with many eager for a change of scenery after spending so much time cooped up in their homes for the majority of the year. Properties are selling fast, and the biggest reason for this is the severe undersupply of property in the UK.
Basically, people want new homes, but there isn’t enough to go around (With, according to Rightmove, the highest imbalance between supply and demand found in the North) This has led to a growing increase in property prices, making new builds an even hotter item in 2021.
The Future is Renting
In the UK, the number of people classified as Generation Rent is steadily increasing. Generation Rent – typically defined as those aged 18-34 – is essentially those who are forced to rent as they can’t afford rising house costs. As the years go by, this is becoming a lifestyle choice for many in the country.
In June last year, a survey found that half of its participants would “happily” choose to rent if they couldn’t find a property to purchase within six months.
Further research predicts that roughly one-third of those aged 60+ will be privately renting by 2040, once again citing high property prices, as well as the increase of divorce rates in the past decade.
Basically, if you can find the money to buy an investment property, you will find it difficult to not find a steady stream of residents even far into the future.
UK Regeneration Efforts
Regeneration efforts have often been highlighted as one of the most attractive qualities that a city can offer and is usually a sign that a place is worth investing money (and time) in. Regeneration projects can typically cause a city to boom in rental demand and capital growth.
Simply, a city becomes a better place to live, and properties there can, as a result, promote some of the highest rental demand due to efforts such as these being able to directly impact public opinion, demand, and in turn, property prices. Keep the people happy, and apparently, the numbers will be too!
So, should you invest in UK property?
Well, now more than ever, it’s probably the best time to invest. Demand for UK property is rife, with property prices continuing to grow and no hint of stagnation on the horizon.
This is most likely the most affordable time to find a property to invest in, so study the market, listen to the experts, and get stuck in!