What do the experts say about property prices and rental values in the UK?
Owning a buy-to-let property is not just about yields; understanding the potential for capital growth is also a key part of any property investment strategy. So, what do the experts say about property prices and rental values in the UK? Where are they heading over the coming years and which regions are going to be the stars of the show? The most recent projections were released in March 2021, with Savills commenting: “2021 will be a complex year, with competing forces having different impacts on the housing market over the course of the year. But government support, the easing of social distancing restrictions, and low interest rates underpin our forecast for 4.0% price growth.” That 4.0% growth sets the tone for the years to come, with Savills projecting it will increase to 5.0% in 2022. Overall, in the five years to 2025, the company forecasts mainstream capital value growth of 21.1% for the UK. The North West tops the table, again at a regional level, that growth will vary significantly over the years ahead. The third most populous region in the UK and home to cities including Manchester and Liverpool the North West is forecast to see growth of 28.8% between now and 2025. The North Easts projects are also at a good level estimated at 20.5% over the same five-year period. Speaking of yields Savills has also included mainstream rental values in its latest five-year forecast. While UK rents are forecast to rise by just 0.8% in 2021, the pace picks up significantly in 2022, when a rise of 4.5% is anticipated. So, what has happened so far in 2021? We are already a quarter of the way through 2021. That means that figures are available to show how the UK property market has been performing so far this year. Nationwide’s latest figures show annual house price growth of 5.7% in the year to March 2021. Again, we see the North West leading the pack, with price growth of 8.2% over the same period. Regional variations in house price growth show the value of doing your homework and identifying the best UK region to focus on as part of your investment strategy. All indicators are undoubtedly pointing to the North of England right now. Looking at the longer-term picture, Savills projects that rents across the UK will increase by an average of 17.0% in the five years to 2025. Here at Global Investments (www.globalinvestmentsincorporated.com) we have seen many investors have been opting for buy-to-let properties in the North East and West of England for some time as the area has established credentials in terms of its property market performance and wider economic backdrop. A centre for industry and dynamic growth, the North of England has plenty to offer investors looking for good value, strong capital growth and solid yields. If you would like to discuss the different property investment options available, get in touch. Source: Savills UK | Residential Market Forecasts House Price Index Headlines | Nationwide