The perfect property storm is upon us

25th June 2021

By Callum Ward

Every so often in the UK property market, numerous positive factors seem to come together at the optimal time to create something of a perfect storm for property investment – something we’re potentially experiencing right now.

House prices in the UK are increasing at an absolutely staggering annual rate at the moment. In their most recent report, the Office for National Statistics found that house prices in the UK have increased by 8.9% in the 12 months leading up to April of this year. The report also highlighted the continued prosperity of the Northern property market, with the North-East coming out on top in terms of annual price growth (16.9% in the year to April 2021).

Newly released data from e.surv echoed this positive sentiment in the market. The data found that the average price of a home in England and Wales stood at just over £340,000 in May. This figure was up 0.5% on the month prior and a massive 13.4% on the year prior. This astronomical increase over the last 12 months is the highest rate of year-on-year growth since December 2004 – almost 17 years ago. Their report also found that once again Northern regions experienced the most growth, with the North West experiencing a staggering annual increase of 20.9%.

Whilst house prices rising has been a constant theme over the last 12 months as the property market performed admirably throughout a global pandemic, the immense growth experienced since the new year has seen the market enter a state of prosperity that hasn’t been seen for years, in particular for buy-to-let investors.

This prosperity is only going to continue if new research from Hamptons is anything to go by. The London estate agents recently found that, for the first time in over six years, it is now cheaper to rent a property than it is to purchase one.

In May 2021, Hamptons highlighted that, on a month-by-month basis, it was around 7% cheaper for a tenant living in rental property than it is for a typical first-time buyer with a 10% deposit. The report found that a tenant would spend a monthly average of £1,054 on rent, an impressive £71 less than the £1,125 a first-time buyer would spend on average monthly repayments.

This discovery sheds light onto the drastic change in attitudes and habits in regard to people’s living situations following the pandemic. Back in the pre-lockdown times of March 2020, a first-time buyer with a 10% deposit could have expected to save just over £100 per month when compared to monthly rental costs, but the shift in housing priorities have seen this trend completely turned on its head.

Now, one could question whether this is thanks to rents falling in price? This is actually not the case, as Hamptons found that rents in Great Britain have increased by an impressive 7% over the last 12 months. Despite this, the immense house price growth throughout the year has surpassed that of rental growth and resulted in an increase in average mortgage costs.

This dramatic financial shift in favour of renting, combined with consistently rising house prices and the plethora of lifestyle benefits on offer to someone who rents as opposed to buying are sure to see tenant demand continue its upward trajectory across the UK, in turn continuing to increase the average rent across the country.

Recent market analysis from the Building Societies Association echoes this positive sentiment towards the market’s performance. According to their data, 30% of consumers think that now is a good time to buy a property, and we can’t help but agree.

With rising house prices, rising rents, continually changing attitudes and financial benefits when it comes to the renting lifestyle, and tenant demand on the up, this is truly a perfect property storm for investors – and we have the opportunities for you to capitalise on it.

Specialising in both residential and student property, we have sold over 11,000 properties to over 5,500 individual buyers in excess of 110 countries. Click here to browse through our current available investment opportunities!

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The perfect property storm is upon us

25 June 2021

Every so often in the UK property market, numerous positive factors seem to come together at the optimal time to create something of a perfect storm for property investment – something we’re potentially experiencing right now.

House prices in the UK are increasing at an absolutely staggering annual rate at the moment. In their most recent report, the Office for National Statistics found that house prices in the UK have increased by 8.9% in the 12 months leading up to April of this year. The report also highlighted the continued prosperity of the Northern property market, with the North-East coming out on top in terms of annual price growth (16.9% in the year to April 2021).

Newly released data from e.surv echoed this positive sentiment in the market. The data found that the average price of a home in England and Wales stood at just over £340,000 in May. This figure was up 0.5% on the month prior and a massive 13.4% on the year prior. This astronomical increase over the last 12 months is the highest rate of year-on-year growth since December 2004 – almost 17 years ago. Their report also found that once again Northern regions experienced the most growth, with the North West experiencing a staggering annual increase of 20.9%.

Whilst house prices rising has been a constant theme over the last 12 months as the property market performed admirably throughout a global pandemic, the immense growth experienced since the new year has seen the market enter a state of prosperity that hasn’t been seen for years, in particular for buy-to-let investors.

This prosperity is only going to continue if new research from Hamptons is anything to go by. The London estate agents recently found that, for the first time in over six years, it is now cheaper to rent a property than it is to purchase one.

In May 2021, Hamptons highlighted that, on a month-by-month basis, it was around 7% cheaper for a tenant living in rental property than it is for a typical first-time buyer with a 10% deposit. The report found that a tenant would spend a monthly average of £1,054 on rent, an impressive £71 less than the £1,125 a first-time buyer would spend on average monthly repayments.

This discovery sheds light onto the drastic change in attitudes and habits in regard to people’s living situations following the pandemic. Back in the pre-lockdown times of March 2020, a first-time buyer with a 10% deposit could have expected to save just over £100 per month when compared to monthly rental costs, but the shift in housing priorities have seen this trend completely turned on its head.

Now, one could question whether this is thanks to rents falling in price? This is actually not the case, as Hamptons found that rents in Great Britain have increased by an impressive 7% over the last 12 months. Despite this, the immense house price growth throughout the year has surpassed that of rental growth and resulted in an increase in average mortgage costs.

This dramatic financial shift in favour of renting, combined with consistently rising house prices and the plethora of lifestyle benefits on offer to someone who rents as opposed to buying are sure to see tenant demand continue its upward trajectory across the UK, in turn continuing to increase the average rent across the country.

Recent market analysis from the Building Societies Association echoes this positive sentiment towards the market’s performance. According to their data, 30% of consumers think that now is a good time to buy a property, and we can’t help but agree.

With rising house prices, rising rents, continually changing attitudes and financial benefits when it comes to the renting lifestyle, and tenant demand on the up, this is truly a perfect property storm for investors – and we have the opportunities for you to capitalise on it.

Specialising in both residential and student property, we have sold over 11,000 properties to over 5,500 individual buyers in excess of 110 countries. Click here to browse through our current available investment opportunities!

Callum Ward

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