The last 18 months have been very strange for people across the globe. For the first time, many of us were confined to our homes, told to stop travelling and only head out for essentials. It has been like a time like none that the majority of us have ever experienced before. But despite all the uncertainty surrounding Covid, the property investment market is still a strong one. The property investment market looks set to continue to grow as we move to a post-lockdown world, particularly across England. So what does the property investment market look like post lockdown?
House prices continue to rise
It will come as no surprise to seasoned property investors that house prices continue to rise across the country. Research from Savills revealed that UK House Prices are set to grow by and average of 15% by 2024. Whilst this is great news for property investors and developers who will likely see great returns on joint venture and flip investments, it is not such great news for first-time buyers as taking that first step on the property ladder may soon be out of reach for many. You can find more information on house price trends using Property Deals Insight’s UK Price Trends tool.
For the first time in a long time, London may not be the best place to invest if you are looking for better growth. This is as a result of lockdown living with many wanting to move away from the London to properties with more outside space and more of a community feel. If you are looking for an investment that will see great growth, it is worth looking to regional cities. Areas such as the Midlands, are becoming increasing popular thanks to investment in industry and infrastructure, as well as an increasing number of employers offering flexible working policies.
Limited supply of properties continues to drive demand
Across the UK, we are seeing a limited supply of properties and extremely high demand, once again driving up property prices as sellers cash-in on the ability to increase sale prices. Despite an influx of new homes being build across the UK, there is still not enough supply to cater to the country’s demands as many look to move to larger properties post lockdown and young people look to move out of their family homes to begin life living on their own.
An increase in demand for rental properties
As we stated above, the increase in property prices is making it harder than ever for property searchers to get on the property ladder. Whether they are first-time buyers or looking to move to larger properties, with deposits of 10-20% required for most to secure an affordable mortgage, for many renting is looking like the better option. In fact, research has highlighted that by 2039 the number of renters is likely to outweigh the number of homeowners.
Research from Hamptons, revealed that for the first time in years, it is cheaper to rent a property than to buy one. The research found that those renting would be better off by £71 per month compared to those purchasing a property with a 10% deposit. A vast contrast from the same research carried out in March 2020 that revealed those purchasing with a 10% deposit would have been better off by £102 per month compared to renters, further proof that the pandemic has had a positive impact on the rental market.
Rental prices forecast to rise
Just like property prices, rental prices are also forecast to rise. Great news for property investors looking to invest in buy-to-let properties. In the South East, rents is expected to hit 11.5% whilst in the Wet Midlands average rental growth is expected to reach 12.5% by 2023. This further supports our analysis above that moving out of London towards the Midlands and further north of the country is likely to provide great rewards for property investors as this areas continue to see strong growth. Our yield hotspots and average rental tools are a great place to start if you would like to conduct further research into rental prices and yields.
Low interest rate for buy-to-let mortgages
It is to be expected that interest rates will be low for a while whilst the country gets back on its fit post-pandemic. This is again great news for investors as many lenders are currently offering extremely competitive buy-to-let mortgages with a range of new products and offers available making the process of investing in a property a lot simpler. We recommend doing your research and getting professional advice when considering a buy-to-let property to ensure you are getting the best deal available on the market.