• Arda

Why invest in UK Property Market?

Updated: Oct 19, 2021

As one of the most popular and rewarding real estate markets globally, the UK real estate market is still coveted by investors all over the world. As we move towards 2022, the real estate market of the UK seems to offer a clear opportunity to investors looking to build long-term returns.

With real estate statistics and pundits expecting the average prices of real estate to grow by 21.5% by 2025, UK investing still proves to be a reliable source for increasing your returns amidst low-interest rates and a whopping demand!

UK Investing- Rentals!

As a result of the country's unprecedented shortage of rental spaces, long-term forecasts for rental prices look very positive for people looking to invest in the UK!

Experts predict that by the end of 2022, the average rental prices for a UK investment could increase by 2%. This rise would be contributing to the 8.5% rise expected over the next five years.

Suppose you are looking to invest in the UK with Buy-to-Let. In that case, these statistics seem very promising as it offers plenty of opportunities for your investment to provide the maximum amount of returns in the long run.

When we analyse specific areas for UK investing, especially areas in Midlands and the South East, these statistics reflect even higher numbers!

Significantly, the West Midlands is outperforming its competition by a mile. A market analysis of the West Midlands shows an expected rise in rent by 12% over the next five years.

Buyer Confidence- A significant player in UK Property Market!

Over the last six months, buyer and seller confidence has been on the rise! This trend is expected to be carried over to the next year as well. According to a nationwide survey, 75% of active buyers expressed the desire to buy property in the next three months, while 81% of active sellers were confident they could sell within the next three months.

This confidence is because of the availability of low-rate mortgages and the accompanied stamp duty holiday deadline. Moreover, the demand hasn't wavered by the summer holidays as it usually does. Buyers can consider this confidence and eagerness to buy to note how this demand level affects the supply and what it could mean for real estate prices in the near future.

Under Supply- Biggest Contributor to Increase in Price!

One of the major contributors to the rise in real estate prices in the UK is its low supply. There are many areas in the UK, especially those forecasting above-average price growth, that is still affordable and witnessing an unprecedented demand.

Experts have estimated that UK renters will outnumber homeowners by 2039. This statistic alone is enough to convince any investor to invest in the UK renters market. The above statement represents nearly 125 million homes in the private rented sector to grow by 24% by 2021.

This shows where the real estate market in the UK is headed for the next 5-10 years. The heavy reliance on renting has created a supply shortage—a situation that can be exploited by real estate investors all over the world!