UK property investment has long been seen as a lucrative one, with many investors choosing to put their money in bricks and mortar as a long term retirement plan rather than traditional, riskier investments such as shares. Even with recent changes to tax laws in the UK, there are still good yields to be gained from investing in buy to let property.
The UK for most people is the ideal place for investments. 2020 saw US investors and other foreigners flocking to the United Kingdom in their droves to add UK property to their portfolios, as well as continued high levels of investment from Asia.
So, what are the advantages of UK property investment for investors who reside in the UK?
1. Property Capital Appreciation
London normally takes the limelight when it comes to the United Kingdom. In fact, 90% of Asian investors choose a property in London. This international appeal has seen prices continue to rise in the capital and beyond.
In the next couple of years, properties are expected to rise by about 56%. London is expected to bring that average down. Over the past year, prices of houses in the Midlands have risen by an all-time high. The properties that are in the North East, according to the latest housing price forecasts, are set to rise by 21.5% by 2024.
The cities found in the North such as:
- Sheffield
- Liverpool and
- Manchester
have been producing very high yields in the recent past. Other lucrative cities to consider are Salford where the yield inclusive of rental and capital appreciation has been at a record high of 32.3%, and Leeds.
In the UK, the property market is gaining some form of balance because investors are now looking for the best yields all over the country. Other factors that investors are looking into are the market entry points as well as house price growth and this has led to the spreading of investment to other cities. However, Oxford and London still remain the most expensive cities in the UK to live in.
2. Passive Income from Property Investment
The demand for housing in the UK is becoming higher than the supply at an alarming rate. Housing listings within the country are at an all-time low. This housing and cost of living crisis are also contributing to growing house prices.
Would-be first-time buyers are being priced out of the market, with many 18 to 34-year-olds viewing renting as their only realistic option. Due to the pressure mounted on the government by different organizations, the government has vowed to build 1 million homes within the next two years. Opening up to foreign investment by the local governments will help meet the high demand. This is therefore an opportune time to invest and secure assets within the UK for both UK residents and foreign investors alike.
3. Major UK Regeneration Projects Affecting Price Growth & Demand
Any level of regeneration will always have a positive impact on the surrounding property market and on average, house prices tend to climb by around 3.6%. Areas said to benefit the most from the UK Regeneration scheme are the East Midlands, the North West, and West Midlands.
The Northern Powerhouse Partnership, set up in 2016 with the objective of increasing the impact and contribution of the North of England to the UK economy, have already pushed ahead with a number of initiatives such as the High Speed 2 rail line and Square Kilometre Array.
The undertaking of these projects will result in the creation of jobs as well as the spurring of economic growth. It would be a good time for individuals to take advantage of the prevailing economic conditions and invest in property.
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