The UK Rental Market is Thriving
Rental properties are in high demand in the UK right now.
A report from April 2021 found that the time it takes for rental properties to become tenanted has been reduced to just 8.9 days from 31.9 days two years prior.
Rental prices are also high across the UK, with some of the highest rental yields of 6.4% on average being found in top buy-to-let areas like Liverpool.
Property experts Savills have predicted that average rental prices for UK property could rise by 17.4% over the next five years.
Affordable Prices Can Be Found
House prices across the UK have been rising rapidly over the last few years, making buying a property more difficult for first-time buyers.
The latest data from the UK House Price Index reports that house prices have risen 15.5% in the past 12 months from July, which can be worrying for first-time buyers.
On the other hand, investors have the opportunity to make more affordable property purchases by buying off-plan properties.
Off-plan properties – properties that haven’t yet been completed – are often offered at below-market rates by property developers.
When these properties are sold in more affordable parts of the UK, better investment deals become available. For example, in cities like Liverpool, it can be easy to find lucrative off-plan opportunities for less than £100k.
Commercial property, designed for shops and businesses, is often significantly more expensive than residential property, but some investors favour this as a way to gain more income from rental returns.
Capital Growth Returns Are High
Because UK house prices are growing significantly in several key regions, investors benefit from enhanced capital growth returns.
In less than 12 months, UK house prices grew by 8.4% on average between October 2020 and August 2021.
By 2025, average property prices in the UK are expected to have grown by 21.5%, with higher growth of 28% predicted for the North West and Yorkshire and the Humber, and 23.9% growth in the West Midlands.
