The good news for investors and landlords is that the UK property market is heating up.
However, to better understand why this is happening now and what is the future trend, we have investigated current market trends and future property predictions.
Here’s our summary.
UK Housing prices are growing at the fastest rate in 17 years, with all regions picking up. Although we are in the middle of a global pandemic, property prices remain high.
We have seen that at the start of the pandemic, the property market was put on pause. Now we are seeing sales surging, with the average sale price of a home in England increasing by 10.2% since March 2020.
People have reassessed their lifestyle and work situations while they have been forced to stay home. We see a trend that people want to continue to have the flexibility to work from home in comfort.
What’s more, since people are finding they don’t need to commute to work, this has led to London residents moving out of London to buy properties that suit their new lifestyle. This includes extra green space around the property, a larger property for their kids or properties with a balcony, garden, or courtyard.
In addition, due to restrictions on travelling, some households were able to increase their savings during the pandemic. This led them to have more capital available to negotiate for the property they wanted, which pushed up the price as they bid against competitors.
This has led to a surge in property demand over the past several months.
Added to this change of lifestyle was the government tax break of the stamp duty holiday of savings on property up to £500,000, which ended in June. Although the savings may not have been the reason for house sales, it was an added incentive for investors.
Finally, the ultra-low interest rates have been a positive impact on the property market. The good news is that it doesn’t appear to be a rush in putting the interest rate up after the long period of lockdown.
All this combined has led to a large demand in buying property. The strong demand is also being driven by not having enough property to sell. The result is an increase in house prices.
Although the house prices outside of London have increased, it is likely that the price of flats in the city will follow this trend.
During the pandemic, flats without gardens were not popular to buy, neither were inner city apartments. With the restrictions, people were not travelling to the city for work or going out to enjoy the well-known London nightlife.
However, the demand for this type of property is likely to come back quickly once the ease of restrictions commences and people start to come back into the city.
Due to the hot property market, renting will remain a popular choice for London residents. Our research shows that renting will continue to increase until the end of 2021. This is due to ongoing job uncertainty pushing people to rent instead of buy.
With the COVID restrictions easing, international students will likely return, and workers will be able to return to their offices in some capacity. This is expected to see an increase in demand for rental accommodation.
Another trend is that the number of buy-to-let landlords has significantly increased. In addition, there was a rise in demand from first-time buy-to-let landlords due to the low interest rates and increasing house prices.
Another key factor in the growing property trend is the potential of foreign investors. With the special visa for British National Overseas passport holders in Hong Kong being granted, it is predicted that this will increase the number of new foreign investors buying property, which will have the potential to increase the housing prices further.
Whether the current boom will continue is hard to predict. However, we see that the current demand continues to be strong for the near future. It seems that the demand and higher property prices will continue until at least the end of 2021.
Investing in the Right Property for Your Goals
We recommend that if you are thinking about investing in a property, you start by getting professional advice to make a considered decision.
At REKA Property Management, we give our clients the facts about the property industry.
If you want to know how to achieve solid rental returns and have peace of mind with your property, then call us on +44 (0) 203 286 6468 or email us at Admin@RekaProperty.co.uk