The UK housing market is experiencing a more balanced state, with a recovery in buyer demand and an increase in the number of property sales, while house price growth is slowing down, according to the Zoopla House Price Index for May 2023.
There’s been a lot of concerning or downbeat news about the economy recently, and certainly, it’s true that there have been challenges such as the cost of living crisis, interest rates, inflation and the war in Ukraine, however, the UK property market has remained stable in that time.
In a comparable time period, cryptocurrencies, stocks and shares and other ‘safe’ assets have struggled and have not really quite kept pace with UK investment property.
The economy now appears to be picking up pace once again, and with it, it’s widely expected that the buy-to-let market will follow.
Zoopla’s House Price Index
Key takeaways from the aforementioned report suggest that buyer demand is on the rise, with the number of new sales increasing.
Annual house price growth, it reported, has slowed to 3% from 4.1% the previous month, indicating a deceleration in price increases, however, this is from a peak post-pandemic that most considered unsustainable.
First-time buyers were, perhaps unsurprisingly, the largest buyer group in 2022 and are expected to contribute significantly to new sales in 2023, however, it also said that the income required for first-time buyers to purchase a three-bedroom home has increased by £7,350 since 2020, with many still expected to need to rent.
The housing market is currently more balanced than in previous years, and if current trends continue, there could be over 1 million sales in 2023, indicating a healthy and active market, with the number of homes for sale increasing, providing more choices for buyers and leading to a rise in agreed sales. That being said, house prices have fallen by -0.7% over the last three months across all regions of the UK, but the worst of the monthly price falls is expected to be over now.
Affordability challenges for first-time buyers appear to vary across the country, with higher-value markets in southern England experiencing larger increases in the income needed to buy a home.
Demand for homes in suburbs with good transport links to major employment centres remains strong, and price growth is expected to continue in these locations. As we predicted, the report indicates a more stable housing market with recovering buyer demand, slowing price growth, and increased sales activity.
Investing in UK property
All of this leads to a healthy and thriving buy-to-let and investment market, with increased demand from renters driving up rents in what is a restricted supply situation.
Overall, prices are healthy, demand is rising, yields are growing and so are rents. Across the country the picture is similar, things in the property market are resilient and profitable for investors and landlords alike.
Despite other economic headwinds, the UK market is, as usual, leading the way. If you’re interested in investing in UK property, why not take a look at our current investment opportunities today?