UK Property Investment and Market Resilience
Property investment is widely considered one of the safest investment strategies available, thanks to the resilience of the property market and its ability to endure periods of economic uncertainty.
As we enter 2023, the UK is in a period of instability due to the political upheaval of 2022 and the cost of living crisis. Many would-be investors are rightly cautious about where they should put their money.
House prices are expected to lull in 2023, which has some questioning whether now is a good time to invest in UK property.
However, the UK housing market is renowned for its endurance and ability to weather tough times, as evidenced by several cases in recent history.
With that in mind, let’s take a look at three key times that the UK property market proved its strength and resilience.
Claim Your Free Buy to Let Costs Guide
From management fees to service charge, there are a few costs to consider when investing in buy to let property. Download our free guide today on buy to let costs and get up to date with the latest fees.
The 2007 Financial Crisis
The financial crisis, often referred to as the ‘Great Recession’ has arguably had the biggest impact on the UK economy in the past twenty years, and naturally, an effect on the property market.
A combination of rising house prices, loose lending practices and higher rates of subprime mortgages in the USA caused property values to rise to unsustainable levels. This led to a large amount of foreclosures and defaulted mortgages, which caused the US housing market to crash.
Due to the impact of this, banks around the world began to fail as the world entered into a massive recession.
The UK housing market was affected by this ripple effect, with the average UK house losing 20% of its value through to February 2009.
Industry experts Savills have stated that the effects of the recession were still being felt ten years later.
However, the UK housing market managed to gain momentum over the years following the 2007 crash.
- House prices bottomed out at £154,452 in March 2009, falling from £190,032 in September 2007. However, this rose by over £10k within six months, suggesting that the property market recovered quickly.
- By April 2010, growth exceeded 10%, a faster rate than before the Great Recession.
This shows that the housing market was able to bounce back far quicker than expected, and despite seeing the worst economic climate of recent memory, the UK property market was able to stay resilient and endure the troubled times.
Unit A-401 Back on the Market!
Completed Manhattan apartment back on the market in our sold out, award-winning development with £9,097 Net rental income. Move quickly to secure this unit.
The Brexit Vote
On the 31st of December 2020, Britain finally took the leap into becoming an independent country as the separation from the European Union was finalised.
The period between the 2016 referendum and the decision being finalised saw many changes to the UK property market. The number of homes being listed for sale in 2018 on Rightmove was 19% lower than in 2017, as sellers waited for concrete news about how Brexit would affect the market.
However, despite the upheaval and uncertainty that this caused, the housing market remained resolute throughout Brexit, as high rental demand led to stability and growth in the sector.
This is because, as a physical asset, property is unlikely to fall in value massively over time. Therefore it is a safer method of investing during periods of economic doubt.
Rising levels of renters meant buy-to-let remained in high demand, rising by 13.9% from 2017-18.
- According to MFS, 77% of investors in 2018 believed that Brexit would likely not affect their investment strategies and that the 2016 referendum did little to affect them either.
- The study conducted by MFS in 2018 also revealed that 18% of investors would consider investing in at least one property in the next 12 months.
- House prices rose by over £8,000 in the 12 months following the 2016 Brexit referendum, suggesting that it did little to affect confidence in the housing market.
Completed 2-Bed only £179,950!
Limited 2-bed apartments available from £179,950 in our completed and tenanted Liverpool development. Assured Net income available on this back to market deal with major savings.
The COVID-19 Pandemic
The most recent major event to shake up the UK economy, the COVID-19 pandemic effectively shut down the entire country for several months in 2020.
This naturally affected the property market as transactions dropped sharply in 2020, as many chose to save their money whilst being cooped up in their homes.
However, as lockdowns ended, the property market bounced back in a massive way as investors looked for more stable ways of investing their money. Stocks, shares and cryptocurrencies were hit hard by the pandemic, while property remained relatively stable.
Renters became far more aware of the space they were living in, and as such, demand for high-quality rental properties rose fast. Savills found tenants were looking for larger properties with more outdoor space as many began working from home long-term.
- This meant in 2021, property shot up in value by record-breaking levels. Prices rose by 10% on average over 2021, the highest growth seen in several years.
- In the two years since the first COVID lockdown in March 2020, house prices rose by over £40,000. This is a growth of 18.3%, a massive leap in value.
These reveal how much the property market managed to thrive during the COVID-19 pandemic, as demand for housing caused prices to rise and buy to let investments in the UK to remain a lucrative prospect.
Get Your FREE Buy to Let Investment Guide
Contains actionable tips for property investors to help your investment portfolio thrive! Download today for a free copy.
Learn More with RWInvest
At RWInvest, we are experts in property investment and have over 18 years of UK housing market expertise.
Having been operating for over 18 years, we are one of the nation’s top property investment companies, helping both newcomers and experienced investors find the best buy-to-let properties on the market.
With specialists able to help you every step of the way along your property investment journey, we have some of the best investment opportunities available in hotspots like Liverpool, Manchester and Bradford.
Our dedicated teams have a vast array of knowledge about the property market and how it has changed over time. Try giving us a call today to find out more.
Alternatively, if you are wondering how the property market will look in the new year, read our free 2023 property market predictions to find out about some of the expected trends of 2023.