Increased demand for rental property means that property could still be a good option for investors.
The average rent in the UK is now at £1,260 – 7.5% higher than last year – meaning that some strong rental yields could be on the cards, so long as investors choose the right location and strategy.
Rental demand, in general, has been on the up in the UK for several years now, particularly in areas popular with students and young professionals.
In fact, an NRLA study found that rental tenant demand in Q3 2023 was 65% higher than in 2022 and 22% higher than in pre-pandemic levels.
Despite property prices dipping, residential forecasts predict averages to rise again in the coming years.
According to the Savills Residential Property Market Forecast, property prices in the UK are anticipated to rise by an average of 17.9% by 2028. Regions like the North West and the West Midlands are expected to see even more optimistic growth, with a predicted 20.2% growth across the next five years.
Lower prices could, therefore, be a positive. By getting involved now, investors can take advantage of this affordability before property values skyrocket in the medium and long term.
Due to the higher average rental figures and affordable prices, the average UK rental yield has similarly risen, with buy to let properties in Liverpool and Manchester, for example, offering gross rental yields as high as 8% in certain regions.