Long considered the cultural and economic heartbeat of the United Kingdom, London has fought a longstanding love-hate battle with property investors who debate rising prices and exclusivity with long term return on investment. This debate has only increased in the post-covid UK property era and recent data has indicated that 2023 might post the perfect opportunity to take the leap.
According to the Nationwide Building Society, in the year to March 2023 house prices had the biggest annual fall since 2009, which begs the question, is now the ideal time to invest in UK property, specifically major centres like London that may seem daunting for newer and first time investors?
UK property website Zoopla has released data that indicates the number of new property sales agreed to, fell by 28% in the year to December and sellers are having to accept an average 4.5% discount to the asking price to achieve a sale, which amounts to £14,100. Their data also indicates that house prices in rural areas suffered most, which signals a reverse to the pandemic’s spike in demand for country homes as families moved away from urban areas. In February, mortgage lending fell to its lowest level in seven years (excluding the pandemic), according to the Bank of England. The amount of money being borrowed dropped from £2 billion in January to £700 million in February. But mortgage approvals increased to 43,500 in February from 39,600 in January.
There were 76,920 house sales in February, 18% lower compared to the same month in 2022, according to HMRC. Before house prices started falling at the end of 2022, the market had defied the odds with spikes caused mainly by pandemic-related factors like pent up demand, desire for more space and rural living, low mortgage rates and the stamp duty holiday.
London property and the buy-to-let market
A buy-to-let property is an income-producing residential investment whereby an investor buys a property either off-plan or immediately available and makes money on their investment by renting out the property in the short term, with the long-term goal of making a profit on the property when they eventually sell it.
While higher property prices like those reflected in London do restrict options for investors, London consistently attracts the highest rents in the UK.
Regional buyers, on the other hand are prioritizing proximity to open space, being close to family and having shops and amenities on the doorstep. Covid trends are moderating in London with buyers looking for easy and quick access into the office.
In a recent Savills survey of homebuyers, 43% put being by a train or Tube station as their top priority. Back in June, they preferred to be near a park or common.
Recent Census data published by the Office for National Statistics depicts a picture of high earners drifting from central to east and southeast London over the past decade, a movement likely to increase in the post-covid return to busy city hubs.
Contact Tailor my Property
Tailor my Property has an extensive network of brokers, experts and analysts who can help you determine what the best investment and property moves are based on your individual situation and needs. Get in touch today to book a consultation with our world-class network.
Comments