UK Property Market 2019 2020
The UK property market is complex and segmented, and prices and sales have been affected by the UKs situation with Brexit and Global trade changes. As Brexit happens, and the stamp duty is removed, it might brighten the property market forecast.
And as the UK’s economic focus returns to domestic from International, the housing markets and rental property markets may start to look good for investors.
The UK real estate market in 2019 is sluggish with home prices and sales down month over month.
Stamp Duty and the Falling Pound
The weaker British pound and falling prices in the UK are drawing overseas investors. For UK buyers trying to decide on the buy vs let option, the answer is to rent.
Some may be waiting for an expected cut to the stamp duty by Boris Johnson which ha dampened the UK real estate market after it was introduced. Property purchases by Brits have dropped 16% year over year.
Despite the fear hype surrounding Brexit, JLL’s Residential UK report show Brexit isn’t hurting multifamily investment. Their data shows multifamily investment is up 150% to 6 billion Euros during 2018.
Loans to Buy to Let landlords had fallen 46% since the Brexit referendum and they report that construction of new homes is still far behind its target of 300,000 new homes a year by 2020.
House Prices to Rise 13.5%
Their UK experts forecast house prices in central London will grow 15.3% over the next 5 years. OBR still expects prices to grow in 2020, but they downgraded their growth prediction to 2.6%.
Knight Frank UK believes London home prices will rise 13% over 5 years, and rental prices will rise 14% between 2018 and 2022. They noted the issues of Brexit and the possibility of the removal of the stamp duty.
This chart below from JLL, shows investment is strong in Berlin and Denmark, and not far behind, London UK. Investment in European multifamily properties rose 40% to 56 billion euros in 2018.
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PWC UK Economic Report 2019
In the recent PWC UK economic report, the company forecasts business investment to stay low, although 2020 national GDP levels will remain similar to 2019.
In their UK housing report, PWC cites mounting affordability issues for workers in London. They believe house prices will rise only 1% across the nation.
“Locked out of purchasing a home, many young people – commonly referred to as “generation rent” – have turned to renting. The proportion of 16-24 year-olds renting privately has risen from 51% in 1998/99 to 73% in 2017/18 and from 20% to 46% for 25-34 year-olds. ” — From the Pwc housing report.
Housing shortages, high deposit requirements, stagnant wages, should make many UK residents renters by necessity for the immediate future.
UK Rental Tenants on the Move
After the removal of Tenant fees, renters are ready to move. Demand in the Uk rose 7% overall and in London saw a 13% increase in demand for rentals. Asking rents in London are at a new record high of £817 per month.
Opportunity: A Glut of Properties for 2019
There are more properties for sale in the UK than at any time since September 2015, a rise of 8.6% Year over Year according to Rightmove.co.uk. West Midland and Scotland have been bucking the national price trend and are seeing prices rise with greater buyer activity. Asking prices are up 8.5% in Scotland, while prices were up 4% in Wales. However this does not mean actual sales prices will rise equally.
UK National Average Asking Prices
According to research from Rightmove, within London, the zone 1 area suffered a 6.5% price drop year over year . The average price reduction across London was £8000. Average asking price is £628,458. Reports are that rightmove agents are losing their jobs.
Flat Rental Prices Levelling Out
Nationally flat and home rental prices rose 2.7% while rents in Greater London fell 1.6% in the second quarter. However year over year, London prices are up 3%.
Is this the Time to Buy a UK Property for Let?
The above charts would have us believe there are hotspots for price growth such as Midlands and Scotland.
According to Propertyhub, the city of Manchester, which has 30% rental properties, is worth a good look. It has a high student population which helps to prop up demand for rental flats. Liverpool as well is cited for high student populations. And Birmingham may have a rental housing shortage that could open it to price growth.
We’ll bring you additional insight into the UK’s rental housing market in future.
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