The Brexit referendum result back in 2016 and the resulting uncertainty amongst businesses and investors in the UK was projected to have an adverse negative effect on property prices (and the real estate market generally) in the country, but recent data suggests that the country is flourishing in spite of this and other hurdles.
Here is a look at some recent statistics showing positive real estate market trends in the UK, as well as a closer look at a couple of the best-performing cities in the country.
Positive Trends in the UK Housing Market
Following the ‘Boris Bounce’ and a level of stability attained in the country’s economy after a Tory majority victory in the 2019 general election, the property investment market has enjoyed, steady, sustainable growth. Property price growth from 2016 to 2020 for England saw prices rise by 9.82% according to Land Registry data, with 14.48% in Wales, 10.44% in Scotland, and 14.27% in Northern Ireland. Rental income has also increased across the UK by about 4% (4.2% in the North West), according to data from the HomeLet Rental Index.
Uncertainty and financial instability in the UK as a result of the pandemic have also undoubtedly had an adverse effect on many different people around the world, but the real estate investment market has again seemingly made its way through the tumult. Housing transactions (from data released by HM Revenue and Customs) fell in April 2020 by a sizeable number – from 87,680 to 37,360 year on year – likely as a direct result of lockdown restrictions. This dip has now recovered quickly and is flourishing, however, up to a peak of 111,260 in April 2021.
Information from Rightmove’s House Price Index from May 2021 also indicates that the UK is also a seller’s market in 2021. Property is selling at its fastest rate ever, with supply unable to meet demand. This is no doubt good news for investors looking to sell an investment property, or buy to let investors that want to ensure that their rental property is free of potential void periods (where they are unable to maintain a tenant and thus lose out on regular rental payment).
Key UK Investment Areas
While the UK property market as a whole is continuing to thrive in 2021, specific areas and cities within the country are more attractive prospects than others to the savvy investor. Here are some of the key places to keep an eye on if interested in the developing UK property market:
This North West city stands out in the UK as one of the best investment prospects currently, with some of the highest rental yield averages nationwide, as well as an exciting amount of regeneration and development ongoing for the future. According to TotallyMoney’s buy to let rental yield map, the city L1 postcode is the only in the UK to reach a 10% rental yield average.
With young urban tenants wanting more conscious and forward-thinking housing, eco-driven property development is also becoming a growing trend. Element Developments in Liverpool are one of the first in the country to launch eco-living concepts, with in-built features and facilities such as rainwater recycling, renewable air source heat pumps, solar paneling, and even electric car charging stations.
Another high-performing city in the UK’s North West, Manchester is an extremely popular destination among young people and businesses looking to move away from the capital city of London for more affordable property prices and an overall better quality of live – a process known as north-shoring.
In their guides to the UK property market, RWinvest cite Manchester (as well as Liverpool and other cities such as Birmingham and Nottingham) as one boasting “the best potential for those who wish to invest in UK Property”. A city with a booming population of young creatives and professionals, it holds second place on the list of cities in the country with the highest graduate retention rate, a figure that again only increases the demand for high-quality, central accommodation.