UK MARKET OVERVIEW
UK Property market today
The effects of the Credit Crunch have excluded over 500,000 households from owning their own home. This has been mainly due to the stringent requirements of mortgage lenders, the much larger deposits required and the inability of householders to save for these deposits. This has led to an increase in demand for private rented homes, mainly in lower value markets in cities across the country.
Rented Housing Market Opportunity
It is estimated that rents in the UK will rise by 21% over the next five years to 2024. This is fuelled by the current housing shortage being experienced throughout the country. Suitable homes are not being delivered quickly enough to meet the demand generated by strong population growth and immigrant influx. Investors who can build property portfolios to meet the needs of tenants will position themselves to take advantage of the predicted increase in rental income.
House Price Growth
Analysts forecast that UK house prices will rise by 25.2% over the next five years. Although higher growth is expected in the South East, South West and East of England, purchase prices tend to be lower in the North and Midlands area. This means that investors have the opportunity to acquire properties that suit their pocket and the needs of their prospective tenants. Long term tenants help secure the asset while the capital growth in the property increases.
Availability of Below Market Value Properties
Many homeowners face increasing challenges. As a result banks end up repossessing homes and disposing of them at low prices to clear their books. Investors have the opportunity to purchase these properties in key cities including Manchester, Sheffield, Doncaster, Leicester and in London and the South East.
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