Should I invest in property for the first time in 2023?
The past 18 months or so have been quite an uncertain time for the UK and the global economy, so you’d certainly be forgiven for asking yourself ‘where is the best place to put my money right now?’
Whilst we can’t answer that for you definitively – it’s down to your own individual circumstances – it’s hard to move past UK property and UK buy-to-let as one of the best places to put your money right now, especially with potentially more disruption as the year goes on.
Silicon Valley Bank (SVB) for example, had to be rescued by the governments of the US and UK respectively due to the potential fallout for tech companies and their share prices just this month.
The Bank of England is still predicting a recession this year, albeit shorter and less pronounced than originally forecast, and the IMF has predicted that the UK will be lagging behind other G7 nations for growth too.
That’s the gloomy stuff out of the way, however, because UK property and UK buy-to-let remain robust, with growing yields and rental incomes along with good price growth.
Should you invest in property for the first time in 2023?
Nothing is ever guaranteed when it comes to investments, however, a dive into the figures this year and previous years tells a story of a strong market with good long-term returns.
Throughout 2022, UK property prices increased by 1.9%, outperforming the FTSE 100 across 2022, which grew by 0.9%. It also compares to Bitcoin, for example, Crypto prices, which have shrunk by around 33% over the past 12 months.
Whilst house prices have dropped ever so slightly in 2023, dropping by 1.1% in February, this decrease is more of a correction for the market as opposed to a crash, and house prices are still forecast to grow in the coming years according to trusted market names like JLL and Savills.
It’s not just price growth that makes UK property attractive, however, as the average UK rent rose by 4.2% over the past 12 months, according to the ONS. That means that the average buy-to-let property yield in the UK (the amount of the value of the property you earn in rental income over a year) sits between 3-5%.
Will house prices rise in the next 5 years?
According to Statista, UK property prices have risen month-on-month almost consistently since 2007, recording a drop in just 3 months in 15 years, and are expected to continue to do so.
Whilst it should be noted that past performance is not an indicator of future performance, it’s certainly true that it’s a useful dataset to use when considering where the best chances of growing your wealth lie.
JLL’s Residential Forecast predicts that house prices in the UK will increase cumulatively by 8.9% in the 2023-27 period, with cities like Manchester, Liverpool and Birmingham to name a few all set to drastically outperform the national average.
This brings us back to our initial question, should you invest in property for the first time in 2023? With solid house price growth forecast in the coming years as well as exponential rental growth forecast for both the immediate and long-term future, there are few better avenues to consider when it comes to investing.
You more than likely have questions about the finer details of property investment, and that’s why we have a dedicated team of experts on hand to answer those questions if you’re considering investing in property for the first time in 2023, why not get in touch today?