UK Property opportunities for 2019
With political and economic uncertainty in the UK, speculation around the housing market is sure to follow. Differing outlooks suggest markets will crash, prices will boom and everything in between. We should, however, expect readjustment in the markets when Brexit is finalised and the repercussions take effect.
Analysing the movements in the market since the referendum in June 2016 can give us an indication as to the strength of the market. The resilience of the housing market can be somewhat underestimated. Research from Halifax suggest that UK monthly house prices rose in December by 2.2%, at the fastest rate in two years.
Looking back even further, the global financial crisis of 2008 saw people aatracted to a long term investment class with a proven track record of performance. Despite concern about what Brexit will bring, projections for house prices remains optimistic. Savills expects houses to rise in value by almost 15% in the next five years.
So the horizon is encouraging for investors but with many economic issues, they must ensure they have done their due diligence.
With regions in the UK offering vastly differing characteristics, understanding how such areas are performing is vital. The Midlands and the Northwest have shown strong growth and yields, with prices in Birmingham having grown at double the rate of the national average, 5.6% per year.
In addition to a burgeoning population of young professionals and students, there has been substantial investment in to the transport links and infrastructure as it hopes to attract those moving out of London.
Despite the advantages of the Midlands for Buy to Let investors, demand for property in London’s prime market still remains strong, with High Net Worth Investors showing their interest. There has been a 50% increase in the sale of homes for £10m plus since the referendum result in 2016.
With the addition of a resiliant rental market, most regions grew in 2018, the demand for property in the UK is clear to see.
So how can prospective investors take advantage?
With growth in property values and rental appetite leading demand, there has been a difficulty from would be buyers to get their purchases over the line with 49.9% of House Sales in the last quarter of 2018 failing to reach completion.
Being able to put finance in place quickly to complete purchases is vital for buyers. An added barrier is the reluctance from traditional banks to lend. Mortgage approvals fell to a seven month low in November 2018. With demand insistent, there are a growing number of alternative finance providers willing to bridge the gap, offering many options for investors.
Ultimately, investors will have seen the UK property market remain resilient as an asset in the last decade or so and it remains an attractive commodity with many opportunities emerging.