Now that we’ve looked at what happened to the UK housing market this year, it’s time to assess if now is a good time to invest in property and if you should invest in property now or wait.
Taken together, these trends paint a promising picture for the current UK buy-to-let market. Despite the rise in stamp duty for investors, there are still opportunities for high-yielding property investments worth pursuing. Investors can still benefit from many of the most appealing aspects of property investments in the UK in the current market:
Stable Property Market and Capital Growth
As mentioned, 2023 was characterised as a challenging year for the property market with marginal price dips in some regions and plateaued growth in others. However, this trend has mostly reversed with much more promising signs in the 2024 market, demonstrating resilience.
According to the Halifax House Price Index (September 2024), UK house prices are up 4.7% compared to the year before, and this is the tenth consecutive increase showing a return to stability.
High Rental Demand and Rising Rental Prices
When it comes to the rental market, unprecedented demand has led to higher potential rental income and investors are likely to encounter less voidages (the periods when the property is unoccupied).
Annual rental inflation currently stands at 5.4% according to Zoopla’s latest Rental Market Report, with some areas experiencing even higher annual rental growth such as 8% in Liverpool.
Nationally, each rental property attracts an average of 19 enquiries from potential renters and this is even higher in some areas such as Liverpool and Manchester where there’s an average of over 40 enquiries per property as per Rightmove.
At RWinvest, we target these high rental demand areas to maximise potential profitability. Our latest launch, West One, is situated adjacent to the Salford Quays area which is in proximity to the exciting MediacityUK which is currently undergoing phase two of its development. This will offer an incredible boost in the surrounding properties for a potentially high rental return and strong forecasted capital growth.
Strong Capital Growth Forecasts in 2024 and Beyond
The 2024 market is showing a promising performance leading to property experts and forecasters to give strong capital growth predictions for the coming years. Savills have projected 4% growth in 2025 and 23.4% over the next five years for the overall UK market, and even higher predictions for some regions.
The region with the highest 5-year capital growth forecast is the North West which has a projected property price increase of 29.4% by 2029, and 5% in 2025.
Affordable Property Can Be Found in Northern Regions
Recent changes to stamp duty have made it even more important to find a good deal when buying property. Finding a good value property can:
Minimise funds swallowed up by tax as it is taken as a percentage of the property value.
Maximise rental yields and profits from capital appreciation which will help absorb the increased tax through your investment.
Despite affordability constraints, some areas, such as the North West, are still relatively inexpensive. For comparison, the national average property price is £292,924, but the average in Liverpool is £179,382 – over £100,000 cheaper.
This change to stamp duty has also underpinned the importance of finding a high-yielding property. The good news for investors is that the average UK rental yield has been increasing, suggesting growing rental income.
