All positive on UK property investment

Proof positive that the potential for UK property investment is growing

This time last year, property prices in UK cities were rising at an average of 3.7% annually. The latest Hometrack analysis shows that this rate of price growth has increased by a third, to 5.5% over the last year.

Regional cities are outperforming London, with only Aberdeen and Cambridge registering falling property prices. In Leeds, Newcastle, and Sheffield, property investments have reversed their two-year record of underperforming other regional cities, as rising demand and a lack of supply conspire to push prices higher. It’s a similar supply and demand story in other major cities, such as Manchester, Liverpool and Birmingham.

Cardiff, Leeds, Newcastle and Sheffield have all recorded a sustained upward shift in the annual rate of growth over the last 12 months. Capital growth in these cities has underperformed that recorded across the larger regional cities over the last two years. The increased rate of growth is a result of rising demand and a lack of housing for sale.

Data from Zoopla shows that this price momentum is supported by increasing sales numbers. The housing market is becoming more vibrant, with the uplift in sales higher than last year.

Demand for property investment outpaces supply

Demand for property is roaring, whereas supply isn’t. That’s the conclusion from estate agent Haart, having analysed its latest data, which shows that:

  • Buyer demand rose by 22.2% on the month
  • Buyer demand rose by 22.1% over the last year
  • The number of properties coming to the market increased by 17.1% on the month
  • The number of properties coming to the market on the year increased by only 6.5%
  • First-time buyer numbers are up by 24% over the last 12 months

The upshot is that there are now 12 buyers for every property on the market.

Property prices rise as more tenants enter the market

It is not only in the number of buyers in the market that has increased. The latest data release from ARLA Propertymark shows that tenants looking for property jumped by an impressive 8% in March. Not surprisingly, rents are rising, too.

23% of tenants experienced rent rises in March – the highest proportion since September 2017. Though this is lower than the 25% number in March 2017, it is indicative of a market that is gathering steam again. David Cox, ARLA Propertymark CEO, said that:

  • “It is business as usual”
  • “Supply is still too low”

What does this all mean to property investors?

Rising property prices in UK cities shows that the market isn’t simply stabilising, but that confidence is returning. The ratio of sales to new supply of homes should support above-average growth in property prices moving forward.

Demand is high, and supply is strained. If you want the significant potential of capital growth and high rental yields, then the regional cities – particularly those in the Midlands and North of England – are ripe for investment.

Do you want to know where you should be investing today? Contact one of our team on +44 207 923 6100 and sign up for the Gladfish Newsletter to stay abreast of all the property investment news that matters. We give it to you straight. No BS. No hype.

Live with passion

Brett Alegre-Wood

Brett Alegre-Wood
May 10, 2018


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