Recent Data by HMRC, illustrates that sales of residential properties have remained fairly stable throughout August and September this year, with just a 0.9% drop year-on-year since last year. In actual fact, the statistics show that month-on-month there has been a 15.8% increase, equalling around 99,890 transactions for residential properties.
This demonstrates there is plenty of demand out there – regardless of political uncertainty people still need and want to move houses.
There is a strong buying power opportunity for investors, and it appears that many are abandoning the wait and see approach in favour of just getting on with it. Mortgage rates are very competitive, employment is high, and earnings have improved, so there are reasons to be positive.
According to Landbay only 42% of private renters might consider purchasing a new home in the new future. With over 2,000 respondents, the study showed that older tenants – aged 55-and-over – were the least interested in buying somewhere new.
This fits the evidence that Britain could soon be a nation of renters. With private renters set to outnumber homeowners by 2039, ‘Generation Rent’ seems to be in full swing. For those who aren’t considering buying a home, flexibility is a major positive with nearly 25% citing it as their reason for renting. John Goodall, CEO of Landbay, believes it’s a sea change that landlords and the Government need to consider:
“This research suggests the UK’s enthusiasm for homeownership may be waning. Conversations around the private rental sector often assume the bulk of renters are simply biding their time until they can buy a house.
“However, the changing face of employment and a thirst for flexible living mean renting is more attractive than ever and landlords should reflect this in their interactions with tenants. It’s crucial that investment in the private rental sector becomes a priority. The Government must focus on encouraging purpose-built rental properties and cease its penalisation of landlords.”
According to ONS rents paid by tenants in the U.K residential market have risen by 1.3% since last year. While rental growth has generally slowed since the first quarter of 2016, driven by an underperforming London market, rents have started to increase since the beginning of this year. Over a long-term view, rents have risen by 7.9% between 2015 and 2019 nationwide, gradually increasing in parallel with demand.
New research has shown that over 50% of UK property investors believe there will be a surge in activity within the sector after the 31st October. Largely shaped by long-term confidence in the market’s resilience, only 31% of the investors surveyed believe that leaving the EU will negatively affect the value of their property portfolios. If there is a no-deal Brexit, the Treasury might instead turn its focus on giving immediate support to the economy, businesses and households. Consequently, such stimulus packages and the pent-up demand combined will result in a surge in the U.K property market.
Despite the political landscape, UK property remains robust enough to entice many domestic and international investors that want affordability and consistent returns. As transactions stabilise and rents continue to increase.