How Do Property Professionals Feel About the Current UK Market?
According to the RICS UK Residential Survey, those in the property industry are more positive about the UK market’s outlook than they have been since January 2022.
The monthly report reflects current and future conditions in the UK residential market, including sales and lettings – important information when it comes to buying a buy-to-let property.
The survey is carried out by the Royal Institution of Chartered Surveyors and is assembled using responses from RICS-accredited professionals such as agents and surveyors. The expert opinion of their members can give an idea about short and long-term changes in the property market, which is valuable for buy-to-let investors in the UK.
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Survey Results Point to Most Optimistic Sentiment Since Early 2022
The overall results point to an improved outlook for housing market activity going forward.
There has been a slight easing of mortgage rates recently, causing near-term sales expectations to edge into positive territory. This is the first positive net balance reading since early 2022, with a +6% projected for the next 3 months.
When it comes to the twelve-month sales expectations, there’s a much more positive sentiment. A net balance of +24% of respondents believe there will be an improvement in sales activity. This is the most optimistic view of this measure since January 2022.
Some other metrics remain in the negative zone, such as new buyer enquiries, which registered at -14 %. However, this is the least negative outlook since April 2022, signalling a comparative upturn in sentiment.
Experts also seem to be more positive about other aspects of the property market. While the activity levels remain subdued, the downward trend in sales volumes seems to be easing.
In terms of the lettings market, tenant demand keeps rising, as suggested by the net balance of +20%. Rents are projected to increase by nearly 4% at the headline level over the next year.
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Positive Sentiments in North West and Northern Ireland
Generally, feedback regarding new buyer enquiries is less negative now compared to a few months ago across all parts of the UK.
Although improvements have been shown, Simon Rubinsohn, the RICS chief economist, has characterised the tone of the results as ‘quite cautious’.
However, the report includes insights from property professionals throughout the country, and the comments vary depending on the region. The sentiment expressed by North West and Northern Ireland professionals was particularly positive compared to other areas. This further underpins the idea that if you’re buying a rental property in the UK, researching location is key.
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Which is the Safest City in the UK to Invest in Property?
With the currently subdued property market, investors are on the lookout for the safest buy-to-let opportunities.
The UK property market is susceptible to ebbs and flows in the short term caused by economic, political, and social changes. But in the long-term, it has proved to be stable and characterised by consistent growth, overcoming crises such as Brexit and the Covid-19 pandemic.
When it comes to the UK, many investors are drawn to the London investment property market.
Looking at the long-term predictions for capital growth in the UK, Savills point to areas in the North of England, Scotland and Wales as areas set for the highest growth, above the forecast for the UK average.
Major cities in the North are also promising when it comes to rental growth and rental demand.
For example, rental growth in Manchester has been occurring faster than anywhere else outside of London, hitting 19.6% growth in twelve months until the end of June 2023, according to JLL.
If you’re a beginner investor and would like to learn more, take a look at our guide ‘What is an Investment Property?’.