UK Property Market Thrives Despite Tough Times
It’s been a hectic few years for the UK property market, as various significant events have rocked the country and transformed the economy completely. From the COVID-19 pandemic and lockdowns to the war in Ukraine to the cost of living crisis, there’s been a lot to shake up the property market in recent years.
Despite this, recent evidence indicates that the UK property market has not only endured the tough times of recent years but thrived, and come out the other side stronger.
Zoopla’s House Price Index for March 2023 is recording that there are 11% more sales on the market right now than in 2019, beating pre-pandemic levels.
This is a sign of not only the strong demand for housing across the country but also of the stability of the UK housing market and how it can withstand major upheaval and change that has rocked other investment classes to their core.
In this blog, we’ll discuss how the UK property market is healthier now than in 2019, and why that may be the case.
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How is the UK Property Market in Better Health Than Four Years Ago?
There are various ways we can use to track how the UK property market is performing.
One of the most common ones is house prices and how they are rising or falling. Rising prices mean that the market is performing well, whereas falling prices are usually a cause for concern.
The Land Registry’s UK House Price Index reports that prices rose by 6.3% annually from January 2023, the latest data available. This shows that the market is still going strong as prices are higher than in 2022.
A second way we can determine the health of the housing market is through the number of sales being agreed upon and completed.
Right now, sales are 11% higher than in 2019 according to Zoopla, which means more houses are being sold than four years ago. This is a good sign that there is high demand for housing, which is good for the overall housing market.
Another way in which we can see how the housing market is performing is the number of properties for sale on the market.
Zoopla’s data indicates that 65% more homes are available on the market than in 2022, while estate agents have an average of 25 homes for sale compared to 14 last year.
This is great news as it means buyers have more choices when buying, so house prices will be more realistic and varied. It means the market is more likely to meet buyer demand as well, helping to stabilise the market after a crazy 2022.
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Why is the UK Property Market So Healthy?
There are a few reasons why property investment is so stable and secure compared to other investment classes:
- Property is a physical asset, unlike stocks or shares, so it is unlikely to rise or fall in value dramatically. This makes it easier to steady the market in times of uncertainty.
- There has been a consistently high demand for housing in the past few years combined with a low supply, so prices have risen as a result.
- The COVID-19 pandemic and lockdowns changed how people value their living space, so more consideration is being taken into where people choose to move to because of the rise of remote working.
- Major regeneration efforts in cities like Liverpool and Manchester are driving young professionals towards these cities, helping buy-to-let properties to thrive as many are geared towards this target audience.
Unlike more liquid investment methods, property can be relied upon to endure tough times. For example, a single unit of Bitcoin is worth more than 29% less now than in April 2022, showing how unstable and risky it is as an investment strategy.
As the cost of living crisis is tightening wallets nationwide, many would-be investors no longer have the funds they need for certain investment classes.
However, property is a necessity for everyone, so property investors are thriving in a climate where many others struggle to make a strong return on their investment.
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