Top Reasons to Buy Property in UK
Buying property in the UK is seen to be a great investment. Despite the lockdown-driven recession, the property market is still doing well. According to various market reports, there is even a “mini-boom” in real property in the country, and that the average time to sell for homes has gone down by almost 31%.
This small but steady growth in the property market is in stark contrast to the effects of the recession back in 2008, wherein the prices of property have crashed. Perhaps one of the reasons behind this is that the 2008 recession was financially-driven, while the lockdown recession currently taking place is due to a public health crisis, which have changed people’s attitudes towards buying or renting property (alongside government interventions to maintain market stability).
Aside from the current conditions in the real estate market, below are other key reasons for buying property in the UK:
- Positive UK house price forecasts.
According to market studies conducted by Chesterton’s and Savills, prices of houses in UK are expected to grow by an average of 15% by 2024. London properties fall below at 5%, but there is better higher growth potential in other regional cities such as Manchester and Birmingham – both of which offer enticing properties to investors.
It is also the ideal time to invest in UK properties because of low interest rates. Since the two consecutive cuts in March 2020, the Bank of England Base rate remains at a record low of 0.1%. This means that lenders continue to offer competitive buy-to-let mortgage rates and a wider variety of mortgage products, which in turn makes the investment market much easier to access.
- Higher demand for homes.
Another reason to invest in UK property is because of the ongoing undersupply of homes versus growing demand. The UK has just started to reopen its normal activities since the lockdown, and the demand for housing has rapidly increased due to people returning to the cities to live and work.
The growing demand for housing also drives the rise of rental prices across the country. Investment returns can be gained faster should these properties be used for rentals. In the South East, it has been observed that rental growth is expected to reach 11.5%; meanwhile in Birmingham in the West Midlands, rental growth is forecasted to be around 12.5% between 2020 and 2023.
- Living trends direct to renting.
Aside from the increasing demand for homes, it is also important to understand the trends in buying and renting real property in the United Kingdom.
The population in the UK is increasing at a rapid rate, and around 74 million people are expected to be living in the country in the next 20 years. At the same time, studies conducted by the Resolution Foundation show that 4 out of 10 millennials are still privately renting at the age of 30. Meanwhile, nearly a third of the wider generation is expected to rent homes until they reach their retirement years.
Investing in property for long-term lease not only caters to the demands of the growing population, but more importantly provides for greater gains via passive income.
- London is the top European city for property investment.
According to the Global Cities 30 Index, London is the second-best city in the world to invest in property, running behind Los Angeles. This ranking makes the other cities across the UK to be lucrative areas for property investment too, such as Birmingham and Manchester.