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Will house prices go down in 2022?

Will house prices go down in 2022?

In the property industry, a New Year brings the age-old question of whether house prices will go down over the next 12 months and whether now is a good time to buy a house. To understand what might happen in the housing market in 2022, it is important to reflect on where things stand today. With the average property price reaching record highs, Surrenden Invest looks at what factors will shape the market over the next year.

£268,349

The average cost of buying a property in the UK stands at £268,349

6.90%

On average, house prices increased by 6.9% in the year to October

+10.6%

Northern Powerhouse cities continued to record the strongest growth rates

+4.80%

Property hotspot Newcastle recorded a +4.8% rise in the year to October 2021

What happened in 2021?

Across the board, data analysed by the industry’s biggest names have shown that UK property prices increased at a double-digit pace throughout 2021.
The latest UK House Price Index – released in December – has reported that the average cost of buying a property in the UK stands at £268,349. This figure is 10.3% higher than the average values a year earlier. Data released by the mainstream lender, Nationwide, support this growth rate, recording the average cost of buying a property at £252,687 – up 10% since November 2020.
The vast nature of the UK’s property market means that indexes will differ based on the composition of the data available to the body at the time of release. Therefore, buyers keeping a close eye on the nation’s property market should delve deeper into headline stats by looking at the regional performance of the property market they are considering for investment in 2022.
Those looking for an in-depth analysis of property prices on a city and regional level are likely to be reassured by the most recent Zoopla UK House Price index, which compares the performance of 20 UK cities. The most recent index reported that, on average, house prices increased by 6.9% in the year to October, with the rate of growth starting to ease following the end of the government’s Stamp Duty Holiday incentive in September.
Despite the slowdown, the report emphasised that the average rate of growth recorded over the last three months is significantly higher than at any time since 2014, helping to highlight the current strength of the market.
Overall, the UK’s largest regional cities significantly outpaced the 2.4% rate of house price growth in London. Northern Powerhouse cities continued to record the strongest growth rates with a +10.6% climb recorded in Liverpool, +8.7% in Manchester, and +7.9% in Sheffield. Even at the lower end of the index, regional property hotspot Newcastle recorded a +4.8% rise in the year to October 2021.
Elsewhere, the UK’s Second City Birmingham recorded an impressive +6.3% growth rate.

Commenting on the overall performance of the marketing during 2021, Jonathan Stephens, Managing Director of Surrenden Invest, said:

“Over the last 12 months, property prices across the nation have continued to rise steadily, and while London’s market has slowed to a certain extent, regional markets have gone from strength-to-strength. This is a trend that we expect will continue throughout 2022.”

What’s happened since the pandemic?

The UK’s property market experienced significant changes throughout the pandemic. From the complete closure of the market during the first national lockdown in March 2020, where the number of properties sold reached the lowest levels since records began, to the introduction of a Stamp Duty Holiday and record-low interest rates, the industry has undoubtedly displayed its resilience during the pandemic.
It is safe to say that Covid-19 dramatically altered everyday life, with many people experiencing a shift in the amount of time spent in the office and commuting to work.
Naturally, this pattern has been reflected across the property market, with homebuyer and renter habits changing over the last 18 months. According to a survey about what people want from property conducted by MFS, a garden or outdoor space is the number one feature for homebuyers in 2021. Square footage is ranked second and access to fast broadband and mobile connectivity third.
The survey, undertaken by 2,000 UK adults searching for a residential property, also highlighted the need for space. The number of Londoners who moved out of the capital and into surrounding areas boosted countryside property sales by £5 million.
However, it is not just the sales market that has undergone changes caused by Covid-19. The easing of lockdown restrictions in the summer and a return to city centre living pushed rental growth to the highest level in 13 years in Q3 2021.
The latest Hometrack Rental Market Report has revealed that average UK rents increased by 4.6% in the year to September. The resumption of a more ‘normal’ life and the commencement of a new academic year have been attributed to a sharp rise in the cost of renting.
Despite the upheaval caused by the pandemic, the demand for property across the country has remained strong. Those considering investing in the sector should pay close attention to trends on the market to secure the best potential gains.

Housing market predictions 2022

It seems obvious, but, at this point, it is worth highlighting the importance of differentiating between the easing of house price growth and values decreasing. For those looking to buy property in 2022, it is doubtful that property prices will dramatically decrease over the next 12 months. Instead, buyers will find that the rate at which values will climb will ease.
Throughout 2020 and 2021, buyers rushed to the market to maximise the government’s Stamp Duty Land Tax (SDLT) savings. As a result, in 2021, it is thought that 1.5 million property transactions will take place. However, the time-sensitive incentive has ended, and transactions are expected to fall to 1.2 million in 2022, which is more in line with the 5-year average.
The window to complete property purchasing during the SDLT naturally created a competitive market. Propertymark’s Housing Market Report reported an average of 19 buyers for every available property.
However, with the urgency to complete now over, property prices are set to continue to rise throughout 2022, with the rate of growth expected to ease. According to Savills, the UK’s mainstream housing market can expect a +3.5% growth rate throughout 2022, citing a shortage of available homes to push prices upward.
Across the property sector, forecasts generally align with this growth rate, with Zoopla expecting a +3% increase, whereas JLL (+4.5%) and Rightmove (+5%) are slightly more optimistic.
In terms of demand, market experts at Zoopla expect that buyer demand will remain strong moving into the new year, with the sector beginning to ‘normalise in 2022’. The property portal cites low supply levels to underpin prices across the next 12 months.
Based on market predictions, it is unlikely that house prices will go down in 2022. Instead, those searching for a property will be comforted by an easing of price rises; however, with a high demand for housing, buyers will likely need to act fast to secure their investment.

£1,058

The average cost of renting is £1,058 per calendar month

0.25%

Bank of England’s decision to raise interest rates from 0.01% to 0.25%

300,000

Construction of new homes well under the government’s target of 300,000 new builds per year

18.80%

Savills predicts a total 5-year price growth of 18.8% in the North West and Yorkshire and Humber

Rental market predictions 2022

For those entering the buy to let property market in 2022, UK property hotspots will continue to benefit from a bounce-back driven by a desire for life to return to ‘normal’. Currently, the average cost of renting is £1,058 per calendar month, and according to JLL, the average rent will increase by 2.5% throughout 2022.
The most recent report from HomeLet has praised the UK’s Private Rented Sector (PRS) as ‘exceptionally resilient’ throughout 2021 and, when it comes to demand, a lack of available new rental properties compared to pre-pandemic levels will continue to push rents upwards in 2022.
For buy-to-let investors, the UK’s property market is a robust choice for rising rental returns and capital gains, making it an excellent choice for investment.

Is now a good time to buy a property?

When it comes to buying a property for personal use or as an investment, it is important to understand your motivations and what’s driving your decision to buy.
Without establishing goals, property investors will not be able to track the performance of their portfolios. Likewise, those buying their primary residence should also consider the reasons behind their purchase. For example, how long are you likely to stay in the property? Upcoming changes to your circumstances and whether you want to buy a new-build or something that requires a bit of work and will therefore require additional funds.
Once you have a clear set of goals, buyers must establish their financial obligations. Securing the best mortgage rate is one practical option to ensure that purchasers get the best deal for their purchase. Despite the Bank of England’s decision to raise interest rates from 0.01% to 0.25% in December 2021, the borrowing cost remains exceptionally low compared to the last five or even ten years.
To determine how much you can borrow, here is a handy mortgage calculator to help investors get an idea of their initial outgoings. Investing in off-plan property through a reputable developer or property consultancy like Surrenden Invest is another way for buyers to reduce the initial outgoings. In addition, buyers purchasing during the off-plan stage are often rewarded with an early investor discount, benefiting from any uplifts in value across the local property market during construction.
For homeowners and investors who are willing to wait for a property to complete, off-plan property investment can offer some of the strongest capital growth potential. Buyers wondering whether now is a good time to buy a property should also consider the cost of waiting for the ‘perfect’ time to invest. With house prices showing no signs of slowing down and the potential for interest rates to climb over the next few years, buyers who act now will benefit from rising prices expected throughout 2022 and beyond.

Positive 5-year forecast

With the construction of new homes well under the government’s target of 300,000 new builds per year, JLL predicts that there will be a shortfall of 500,000 properties from the 1.5 million needed over the next five years. An overall lack of housing across the country will undoubtedly lead to rising prices. JLL expects house prices to climb by 20% between now and 2026, meaning that property investors who enter the market at today’s price could see the value of their assets rise in a relatively short period.
Property investors considering where to invest for the best capital growth potential will continue to benefit from the north-south divide in mainstream house prices. Savills predicts a total 5-year price growth of 18.8% in the North West and Yorkshire and Humber, with these two regions outperforming the 5.6% and 10.4% expected in London and the South East, respectively.

Investing in property in 2022

It is difficult for property investors and homebuyers to ignore the fundamental demographic and economic changes supporting house price growth over the next five years. Buyers looking to invest in property in 2022 are likely to benefit from a real estate consultancy like Surrenden Invest. With over 2,000 properties sold in seven years, our team of professionals is on hand to discuss your investment needs and match our available properties with your financial goals.

For more information about buy to let property investment, contact Surrenden Invest today.

Best Places to Invest in UK Property 2022 | Buy to Let Market Overview

Best Places to Invest in UK Property 2022 | Buy to Let Market Overview

Over the past five years, the UK government has introduced several measures that have impacted the buy to let market, including reduced tax relief available to property investors and second-home buyers. On the surface, conditions like these might have made buy to let property more complicated for some, however the fundamentals of the market – such as demand for rental property – remained strong.
According to the Office for National Statistics, the number of households in the Private Rented Sector (PRS) increased from 2.8 million in 2007 to 4.5 million today. And with projections suggesting that 1.2 million new households will be created over the next five years, demand for PRS property is set to continue to grow.
To help investors capitalise on the rising demand for rental property, Surrenden Invest will outline the best places to invest in UK property in 2022 in this feature, by highlighting where is expected to provide investors with the best rental yields and the strongest capital growth potential.

Building on a positive 2021

Despite the pandemic, overall, 2021 proved an extremely positive year for property investors, with figures published throughout the year showing rising rental yields and steady house price growth.
As far as values are concerned, the latest UK House Price Index for August 2021(released in October) showed that average asking prices of sales agreed in England were 3.2% higher in August than in July 2021. Over the course of the year, prices increased by 9.8% and the average property value reached £280,921.
Savills also published separate data predicting UK house price growth climb by an average of 3.5% in 2022, with mainstream UK house prices expected to rise 13.1% by 2026.
Since the country reopened, the rebound in housing market activity is an encouraging trend, particularly for investors looking for signs that UK property will continue to provide opportunities for capital gains in the coming years. 2021 was also an excellent year for rental properties, with demand rising across the UK – especially since the country started to open up following the various lockdown measures introduced by the government.
Currently, rental prices in the UK average £1,061 per calendar month (pcm), excluding London from the equation, and the average rent is £891pcm. However, despite the pandemic, rental prices have climbed by 7.5% across the UK as a whole over the last 12-months.
Those considering investing in UK property should certainly see the last year as a triumph for the property market. Even in the face of challenging economic conditions, the property sector continues to show its resilience and offers investors an excellent chance of achieving good returns in the coming years.
But where should investors buy to achieve the best rental returns in 2022?

3.20%

Average asking prices of sales agreed in England were 3.2% higher in August than in July 2021

£280,921

Over the course of the year, prices increased by 9.8% and the average property value reached £280,921

£1,061

Rental prices in the UK average £1,061 per calendar month (pcm) excluding London

7.5%+

Despite the pandemic, rental prices have climbed by 7.5% across the UK as a whole over the last 12-months

Best UK buy to let areas for 2022

To help property investors make an informed decision, Surrenden Invest has outlined the best buy to let areas for 2022. As mentioned earlier in this feature, when it comes to capital growth potential, the UK average in 2022 stands at 3.5%, with the growth rate in London lagging behind at just 2%.
According to Savills, the north-south divide will continue to close over the next five years, seeing house price growth excel across the North of England and the Midlands, whereas values in the South and South East will rise – albeit at a slower pace.
The potential for price growth looks particularly positive for Northern Powerhouse cities like Manchester and Liverpool.  The wider North West region is expected to see values climb by 4.5% in 2022 and by 18.8% in the five years 2026. Interestingly, Savills expects the same rate of growth across Yorkshire and the Humber.
Location
2022
2022-2026
(5-year cumulative)
North West
4.5%
18.8%
Yorkshire & the Humber
4.5%
18.8%
North East
4%
17.6%
East Midlands
4%
15.9%
West Midlands
4%
15.9%
South West
3.5%
13.1%
South East
3%
10.4%
East of England
3%
10.4%
London
2%
5.6%
UK
3.5%
13.1%
Source: Savills Research.
Investors looking towards regional property hotspots including Birmingham, Leeds, and Newcastle can also expect to secure higher than average returns across 2022 and over the next five years, with values in the North East expected to increase 17.6% by 2026 and 15.9% in the West Midlands. When compared to the UK average of 13.1%, it is clear that regional property hotspots are most likely to deliver property investors with the best capital gains potential.

Best rental yields

Throughout 2021, the UK’s best buy to let areas were regional cities. Rightmove cited the effects of ”boomerang” tenants – those going back to cities following the easing of lockdown restrictions – attributing the rising rental costs.
A report from Rightmove revealed that demand for rental accommodation helped push rental growth in some regions to double-digit increases year-on-year, with rents climbing by 10.3% in the East Midlands and by 10% North West.
For buy to let investors, positive rental growth can be seen across regional rental hotspots, with average rents climbing by 8.4% in the East of England, 8% in Yorkshire and the Humber, and 6.9% in the West Midlands. When compared to London, where rents increased by 2.7% year on year, regional property investments are most likely to deliver the most robust return on investment over the coming years.
When it comes to demand, Birmingham and the West Midlands saw the highest tenant interest, with the amount of new prospective renters reaching a record high in September, according to Propertymark.
Buyers looking towards future demand should consider tenants affordability. With regional cities already attracting higher levels of students and young professionals than London, prime locations with younger populations, including Manchester, Liverpool, Leeds and Birmingham, offer strong rental yield growth over the next five years.

10.3%

Rents climbing by 10.3% in the East Midlands and by 10% North West.

16.5%

Reports expect rental costs to rise 16.5% by 2024 in Manchester, 15.9% in Birmingham, 14.8% in Liverpool, and 14.2% in Leeds.

8.4%

Positive rental growth can be seen across regional rental hotspots, with average rents climbing by 8.4% in the East of England

As JLL outlines in its 2020 UK City Centre Forecasts, “Manchester is forecast to see both the highest sales price and rental growth of any UK city over the next five years.” The report expects rental costs to rise 16.5% by 2024 (5-year cumulative) in Manchester, 15.9% in Birmingham, 14.8% in Liverpool, and 14.2% in Leeds.
Investors considering Northern Powerhouse cities may achieve some of the highest rental growth available on the market.
Encouragingly, the demand for new, high-quality rental properties continues to remain strong across the country for property investors and tenants alike. As a result, there is a steady flow of tenants who require properties in locations that offer a good quality of life, excellent transport links, and access to local amenities.
If you are looking to maximise returns from your buy to let property in 2022, keeping an eye on market trends, including tenant demand and regional growth, will likely steer you in the right direction.

Skip London, but consider London commuter belt property

Over the last 12 months, the regions have outpaced London in new sales agreed, house price and rental growth, and it seems likely that this will continue over the next few years.
The slight ”cooling” of London’s property market will be of no surprise, with affordability in the capital a sticking point for most residents and investors. However, with attractive employment prospects in London and the pull of the ”big city lifestyle”, the traditional ”commuter belt” located just outside London is once again set to provide a strong attraction for investors next year, with areas with fast and reliable rail connections offering some of the best opportunities.
Those considering the London commuter belt property market should consider areas that offer travel times under 40 minutes by train like High Wycombe. Recently named the location with the ”most reliable” commute to London, High Wycombe offers a fast 35-minute train and is ranked in the top 10 family-friendly commuter towns for London workers.
Property values in the picturesque market town have increased by 8% over the last 12 months, with the average prices of property standing at £374,442 – significantly lower than the London average of £649,941.
As city workers start to return to offices, many companies have moved to a hybrid model regarding location flexibility. Buy to let investors who take note of this trend will be able to capitalise on the demand for rental properties within an easy commute from London.

How to invest in buy to let property in 2022?

Building a diverse portfolio can offer some highly attractive benefits for property investors. Location diversification is a popular strategy for investors who can broaden their options to ensure maximum benefit from various trends and fluctuations in the market.
Cities including Birmingham, Liverpool, Leeds, Manchester and Newcastle will prove attractive options for buy to let property investment in 2022 and beyond, offering investors the opportunity to secure reliable rental returns and capital growth potential. Plus, with the government’s commitment to level up the country’s economy, investors stand to benefit from long-term infrastructure projects that include HS2.
For those considering entering the property market, there are several reasons for investors to feel confident about the fundamentals driving buy to let sector.

To discover the best place to invest in UK property in 2022 for your portfolio, contact Surrenden Invest to discuss your requirements and to view our latest range of investments.

Newcastle Market Insight – Q1 2021

Newcastle Market Insight – Q1 2021

By Conor Kilcoyne, Senior Property Consultant

With a range of topflight sports teams, historical & cultural experiences, shopping & leisure facilities, and an attractive nightlife one could say the Newcastle community is a proud one. As well as an established community, Newcastle is fast becoming the most sought-after buy-to-rent market in the UK for investors seeking greater capital growth and a more attractive yield than the go-to regional cities can now offer.
SI_NewcastleInsight_icon1

Property values in Newcastle are 14% lower than that of Birmingham and Manchester.

SI_NewcastleInsight_icon2

Newcastle is one of the fastest regional growing economies in the UK.

SI_NewcastleInsight_icon3

Over 33% of graduates from Newcastle Universities go on to live and work in the city .

SI_NewcastleInsight_icon4

Arc Avenue is set within the heart of the £60m Gateshead Quay re-generation project.

SI_NewcastleInsight_icon5

Newcastle property prices have experienced 78% growth since 2000.

SI_NewcastleInsight_icon6

20,000+ students study in city highlighting the need for high quality accommodation.

Commercially, Newcastle has never been so strong with large global corporations such as Siemens, Sage PLC, Nestle and Proctor & Gamble occupying office space and setting up UK headquarters throughout the city.
Newcastle plays host to two of the UK’s leading universities: Newcastle University and Northumbria University. Newcastle University is often regarded as the leading university for Computer Science in the country, producing the next generation of tech entrepreneurs who will flourish in the city. Factoring in the North of Tyne Devolution deal which will see annual growth in economic output of £1.1bn and 10,000 new jobs, Newcastle’s already growing base of young professionals (33% of all graduates settle and work in the city) looking for quality, affordable accommodation is only going one way.
According to the PP index, it was not until 2019 that property prices in Newcastle recovered to pre-2008 levels. Comparing this to other post-industrial cities such as Birmingham and Manchester who recovered as quickly as 2014, real estate in Newcastle is now well-positioned to out-perform the rest of the UK. Development is set to surge from 2022 onwards with developers applying for planning with local councils in increasing numbers.
Newcastle remains one of the more affordable buy-to-rent locations in the UK, with property prices currently 15% below rival cities, such as Manchester. However, with continued investment into the city we are seeing property prices begin to soar. This means that Newcastle is primed for sustainable capital and rental growth for many years to come.
SALES MARKET

23.46%

Property values up 3.9% over the past 12 months and 23.76 over the past five years.

14.0%

Newcastle property prices are 14% lower than Birmingham & Manchester.

863,000

Newcastle’s population is expected to grow by 863,000 by 2030.

RENTAL MARKET

6.52%

Newcastle postcodes boast one of the highest average buy-to-rent yields in the UK, at 6.52%.

2.5weeks

The average property is let within 2.5 weeks of going to market.

33.33%

Over 33% of university students stay to work in Newcastle.

Due to Newcastle’s growth, Surrenden Invest have acquired exclusive access to the best investment opportunities in the city. These opportunities strengthen our already healthy nationwide development portfolio.
Please do not hesitate to contact me if you would like to discuss the investment case for Newcastle in greater detail or find out more about our latest opportunities in the city, such as the recently launched Arc Avenue, a waterfront Grade II Listed period conversion.
Conor Kilcoyne
Senior Property Consultant
conor@surrendeninvest.com

For regular updates and advice on investing in Newcastle Buy-to-Rent property, follow Surrenden Invest on social media or get in touch today.

Buy-to-let Borrowing for an Ageing UK Population

Buy-to-let Borrowing for an Ageing UK Population

Traditionally borrowing gets harder as you get older, but it is now getting easier to secure a buy-to-let mortgage when you’re over 60. This doesn’t mean over 60s can’t get a mortgage. But lenders might impose an age limit for taking out the mortgage, plus a maximum age for when the mortgage term will need to end.

When it comes to buy-to-let, retired borrowers may have previously found it difficult to secure a mortgage to purchase a buy-to-let property. Lenders were reluctant to offer them finance, particularly if they were still in debt in their retirement.
With around 1,000 mortgage deals available for terms of up to 40 years, which means a buy to let borrower aged 45 years old can easily expect to have a mortgage on a private rented home for 45 years. This seems to be working as the latest buy to let mortgage data from lender trade body UK Finance reveals landlord remortgages are outnumbering loans to buy new homes to let by nearly three to one. Borrowing to buy a new property to rent dropped by 7.7 per cent to 4,800 for the 12 months to the end of February 2019. Remortgages were up 2.1 per cent with 14,400 loans agreed over the same term.

“While theoretically age should not be as big a concern for Buy to Let lenders as for a residential property, the reality is that it is still a factor and many borrowers do face upper age limits. When it comes to BTL mortgages, repayments aren’t usually covered by pension savings or work salary as with residentials. Instead, affordability will usually be determined by the expected rental income from tenants (alongside the usual factors such as loan to value and other individual circumstances).”

Online Mortgage Advisor
Buy-to-let lenders are encouraging borrowers to stay in the market well into retirement as they lift age limits on mortgages. Figures from consumer group Which? suggest two out of three of the 2,057 deals available to landlords have a maximum age limit of at least 85 years old. Some go farther – with 9 per cent offering mortgages to borrowers up to 90 years old and a fifth without any age limit at all.
Age limits might still be a factor, but when it comes to determining whether a buy-to-let investment is affordable or not, many lenders will focus more on the rental cover than the age of the borrower. As long as borrowers can demonstrate that the monthly rent payable on the property is enough to cover mortgage repayments by between 125% and 145%, the investment will be determined as affordable.
With the population living longer, people are still wanting or needing to borrow money for a multitude of reasons. Now lenders aren’t standing in the way as the number of buy-to-let products available on the market is at its highest level since the beginning of the financial crisis in 2007, with many of these products will be available to landlords requiring finance, regardless of their age.

For regular updates on buy-to-let investment opportunities, be sure to follow the Surrenden Invest team on social media.

How long will the London housing market pause for thought?

How long will the London housing market pause for thought?

There are a number of indicators that the pre-Brexit, pent up buyer demand for London property is shortly to be unleashed. Chestertons’ Winter 2018/19 London Residential Property Market Report asserts that the “bottom of the market may be in sight,” while the rate of decline in the capital’s sales prices have slowed. Indeed, demand at the prime end of the market bounced back during the latter half of 2018.

“We’ve seen many buyers – both owner-occupiers and investors – taking a ‘wait and see’ approach in London as the Brexit deadline of 29 March approached. However, the delaying of that date to 12 April – and the 31 October – is testing purchasers’ patience. Add in the prospect of prices in London bottoming out and we could see a swift and decisive rise in transactions over the coming weeks and months.”

Jonathan Stephens, MD, Surrenden Invest
Prices in London fell during 2017 and again during 2018. Given the ongoing political impact of Brexit on sterling, this has made for some interesting opportunities for overseas investors. With indications that the market is bottoming out, many investors will now be looking to snap up properties at bargain (for London) prices while they have the chance.
At the same time, it’s likely that many of those waiting to buy property for their own use will also act in the coming weeks and months. As Brexit looks increasingly likely to drag on, many would-be purchasers may be prompted to act before London’s prices begin to rise too steeply again. As such, 2019 – or at least the latter half of it – could turn out to be a good year for property in and around the capital.

“Many property investment companies are looking closely at London again right now, as the market correction that has taken place over the past couple of years makes property ownership in the capital more attractive, particularly given the recent upward movement in rents and therefore yields. As such, London and the commuter belt certainly bear watching over the rest of this year.”

Jonathan Stephens, MD, Surrenden Invest
London’s property market is, of course, vast, as is the commuter belt that surrounds the city. Two areas likely to be of particular interest in the near future are Gerrards Cross and Reading, both of which offer a fast, direct commute into central London, as well as a good quality of life for the whole family. If the predictions of the market bottoming out and pent-up demand being unleased play out, it is likely that interest in both of these areas will spike significantly.

For regular updates on investing in London and other key UK cities, be sure to follow the Surrenden Invest team on social media.

First Time Buyers, Brexit and Boris Johnson

First Time Buyers, Brexit and Boris Johnson

An influx of deals agreed over the last several months will cause a substantial rise in House prices over the summer – according to new data from property experts Reallymoving and Rightmove.

Fuelled by past frustrations of political indecision, home buyers see the nearing deadline of Brexit as an essential milestone for establishing stability and future prosperity in the market. Investors encouraged by the light at the end of the tunnel now also see an opportunity to capitalise on exceptional value through buying in the last remaining months ahead of Brexit.
House pricing indexes forecast growth of upwards of 1.2% in August, followed by growth of 3.8% in September – marking a crucial turning point in the recovery of what has otherwise been a tough couple of years in the property market. (Reallymoving)
This Summer is also set to see renewed interest and appetite from overseas buyers with the promise of lower stamp duty and purchasing costs for home buyers and investors alike. The introduction of increased Stamp Duty in 2014 was arguably the leading driver in the 20% decline in property prices in areas of Central London in the following year; questions now linger as to whether the introduction of lower Stamp Duty will spark an immediate correction in house values and send prices soaring.
With the prospect of Boris Johnson in No.10 looking more likely than ever, Johnson’s condemnation of high taxation appears to be well received with investors drawn to the Country who have in the past been unmotivated by unattractive costs associated with investment.

“The spring market was more robust than expected and this has prompted positive growth through the summer, particularly for deals agreed in May which are translating to sales in July.”

Jonathan Stephens, MD, Surrenden Invest
A plan to cut stamp duty on home purchases in Britain may just be the boost needed by the slumping London property market and give first time buyers the opportunity to get on the property ladder across the UK.

“We have seen a spike in interest in commuter belt locations around the UK’s largest cities, London, Birmingham, Manchester and Newcastle. With high sales in growth location sites such as Gerrards Cross, Luton and Digbeth. There is huge pent-up demand in the UK property market amidst the political unrest if the UK is able to agree a deal with the EU we could see a rush of properties hitting the market in the late autumn along with a surge in buyer demand..”

Jonathan Stephens, MD, Surrenden Invest

 

For regular updates on Brexit and Property Investment in key UK regional cities, follow the Surrenden Invest team on social media.

New Rental Market Snapshot keeps investors up to speed

New Rental Market Snapshot keeps investors up to speed

Here at Surrenden Invest we do all we can to make our property investment company stand out from the crowd. Part of that includes sharing the knowledge and market insights that we have with our community of investors. We believe that knowledge is a powerful thing and is essential in choosing the right investment opportunities at the right time. That’s why we’ve launched our Rental Market Snapshot Guide

“Whether you want an overview of the UK rental market as a whole or a concise, detailed look at some of the country’s leading cities, the Rental Market Snapshot is the ideal investment companion. Making money from buy to let property UK opportunities is all about achieving strong yields as well as the potential for healthy capital growth. Surrenden Invest delivers a range of resources to support this.”

Jonathan Stephens, MD, Surrenden Invest
The data-driven Rental Market Snapshot considers not just current rental prices in each of the major cities it covers (Birmingham, Manchester, London, Liverpool and Newcastle) but also a range of other market performance metrics. These include average tenancy lengths and void periods, as well as factors such as what proportion of renters end their tenancies early. All of these can impact on the rate of yield that buy to let investors can expect.
Wider market drivers such as the kind of properties that renters are seeking are also considered, as well as the growing relevance of the private rented sector as a whole.

“The UK rental market is a huge topic. What we’ve done with the Rental Market Snapshot is to capture the essence of the market as it stands today, while also exploring the historical factors that have led us to that point. We’ve looked forward was well as back, which is particularly important for investors who are currently looking at a range of cities for their next investment.”

Jonathan Stephens, MD, Surrenden Invest
Birmingham is one of the most exciting cities in the UK right now when it comes to buy to let investment. Surrenden Invest has been highly active there in recent years. Its latest – and most impressive – Birmingham development is No. 76 Holloway Head. The 34 luxurious apartments enjoy an outstanding B1 location, just two minutes from the Bullring, Grand Central and New Street Station. The swanky Mailbox retail destination, meanwhile, is almost on the doorstep. This ultra-prime location has been chosen in order to capitalise on the demand for true inner city living that’s at the heart of the action – one of the trends noted in the Rental Market Snapshot.

For regular updates on investing in the UK buy to let market, be sure to follow the Surrenden Invest team on social media.

Liverpool to London in just 85 minutes

Liverpool to London in just 85 minutes

The omission of Liverpool from the original plans for the HS2 high speed rail network was a major blow to the city. However, Liverpudlians didn’t give up on the potential for their home to benefit from the new network. Instead, they focused on ways to turn it to their advantage.

The Linking Liverpool campaign called for a high speed rail link between Liverpool and Manchester, effectively allowing Liverpudlians to tap into the HS2 network via the link. Transport for the North, whose remit includes the improvement of transport across the North of England, has backed the plan as part of its £70 billion, 30-year northern transport plan.

“It makes absolute sense that as many northern cities as possible should benefit from HS2, so the proposed Northern Powerhouse Rail link between Liverpool, Manchester and Leeds is a key project for the area. It’s also one that has the potential to impact on property prices and yields, for those looking for buy to let property UK opportunities in the right locations.”

Jonathan Stephens, MD, Surrenden Invest
The L3 postcode district is one such location. A sought after area of central Liverpool, it provides easy access to the best that the city has to offer, both in employment terms and for entertainment purposes. The area is home to The Tannery – a collection of elegant new homes in a striking building that reflects the city’s industrial past, paying homage to the leather works that formerly occupied the site and from which the new building takes its name. The buy to let apartments already hold strong appeal to local professionals, boasting a communal courtyard, roof garden and concierge service.
Adding a reduced Liverpool to London journey time of around 85 minutes into the mix will certainly give the development a boost – along with the wider economic prospects of Liverpool city centre. The Liverpool to Manchester leg of the journey will take approximately 22 minutes if the Northern Powerhouse Rail link goes ahead as planned. The onward journey from Manchester to London would then take around one hour and 25 minutes on the HS2 network.

“Keeping abreast of local transport and regeneration initiatives is an important part of identifying current and future buy to let opportunities that have the potential to positively impact investors. Coupled with the fact that northern cities are outstripping the UK average when it comes to property price growth, Liverpool has an incredibly strong investment case right now.”

Jonathan Stephens, MD, Surrenden Invest

To keep track of the latest developments impacting the buy to let sector in Liverpool and other UK regional cities, follow Surrenden Invest on social media.

Northern cities stand out from the crowd

Northern cities stand out from the crowd

Property investment companies with a nose for good opportunities have been focusing on the potential of the North England for some time. Cities such as Manchester, Liverpool and Newcastle have much to offer those looking to profit from property. Now, JLL’s latest Northern England Residential Forecasts report has confirmed the wisdom of looking to the North.

“In recent years Northern England’s major cities have established themselves as stand out performers in terms of residential investment and development.”

JLL Northern England Residential Forecasts, February 2019
The key to the success of property investments in these northern cities is the imbalance between the increased demand for centrally located homes and the supply thereof. The JLL report urges investors to ‘find the gap’ when it comes to these markets, which is precisely where property investment companies come in.

“The vast size of cities such as Liverpool, Newcastle and Manchester means that no two investment opportunities are equal. A few hundred metres can make all the difference when it comes to the yield that a property can deliver. That’s why it’s so important for investors to work with a property company with local knowledge when they’re seeking buy to let property UK opportunities.”

Jonathan Stephens, MD, Surrenden Invest
The North is outstripping the national average considerably when it comes to house prices. UK house prices rose by an average of 2.7% in the year to Q3 2018, according to JLL, while in the North West that figure stood at 4.9%. Yorkshire and The Humber saw growth of 4.4%.
Both the North West and Yorkshire and The Humber offer an excellent entry point for investors, thanks to their average home values being below the national average. In the North West, the average home costs £165,000, while in Yorkshire it costs £164,000. The average UK home price is £231,000 (all figures as at Q3 2018).
The Tannery in Liverpool is as shining example of why investment in the right northern hotspots is so attractive. The stylish homes enjoy a superb central location, while investment starts from just £85,000, with net yields of 6%. Premium specifications and a concierge service mean that the homes hold strong appeal to professional tenants, while the provision of luxury furniture packs makes life easier for tenants and investors alike.
JLL’s forecasts for Liverpool project a continuation of the city’s success over the year ahead. The firm believes the city will achieve 2.4% growth in new development prices, against a UK average of 2.2%, and an increase of 3.0% in city centre rents (UK average: 2.4%). All at a time when buy to let landlords are enjoying greater returns.

“By delivering specialist, localised knowledge about the cities in which it offers investments, Surrenden Invest will remain at the forefront of the UK buy to let sector over the years ahead, finding the gaps that deliver the best results for all those interested in investing in UK buy to let opportunities.”

Jonathan Stephens, MD, Surrenden Invest

For regular updates on investing in northern cities such as Liverpool, Manchester and Newcastle, be sure to follow the Surrenden Invest team on social media.

Housing market latest – wage growth enhances buyer affordability

Housing market latest – wage growth enhances buyer affordability

Wage growth in the UK is outstripping house price growth at its fastest rate since 2011, enhancing buyer affordability. This is contributing to both mortgage approvals and housing transactions holding up well, despite the ongoing political uncertainty related to Brexit. Indeed, the February 2019 Zoopla/Hometrack UK Cities House Price Index states that, “Data on transactions remains resilient with no obvious Brexit impact at a national level.”

According to the report, there was no material drop in mortgage approval activity or transaction volumes during the latter half of 2018, when compared with the five-year average. Furthermore, HMRC figures show that transaction volumes actually increased slightly during the first two months of 2019.

“The latest figures are further evidence of the UK housing market’s resilience in the face of the Brexit debacle. Improving buyer affordability enhances that resilience even more, with strong transaction levels supporting a buoyant market for both owner occupiers and investors.”

Jonathan Stephens, MD, Surrenden Invest
Annual wage growth stands at 3.4% according to Rightmove’s latest House Price Index. That compares to an average annual rate of house price growth of 2.0%.
Annual wage growth stands at 3.4% according to Rightmove’s latest House Price Index. That compares to an average annual rate of house price growth of 2.0%. Not only that, but the National Living Wage in the UK has just risen by 4.9%. As of 1 April 2019, the national minimum wage rose from £7.83 per hour to £8.21 for those aged 25+. Workers aged 21-24 also saw an increase, from £7.38 per hour to £7.70, while those aged 18-20 saw a rise from £5.90 to £6.15.
The impact of this can best be seen at a local level. In three out of four southern regions, for example, Rightmove reports that new sellers’ asking prices are cheaper than they were a year ago, giving buyers a distinct advantage when considered in light of their increased purchasing power.
Further north, many regional cities have been outstripping the price growth of their southern counterparts over the past three years, thanks to rising employment levels, as well as enhanced affordability. Two cities – Leicester and Manchester – have even achieved price growth of 17% since the Brexit vote, creating fantastic capital growth for those who timed their purchases right around the time of the referendum.
Manchester remains high on many investors’ priority list – and for good reason. The city is home to an impressive array of redevelopment projects, the largest of which is the NOMA development. The 20-acre, mixed use site is being regenerated at a cost of £800 million, making it the largest development project in North West England, eclipsing even MediaCityUK (also in Manchester). Such vast developments bring a wealth of opportunities, both for those who live in the city and for those looking to invest there.
Just 300 metres from NOMA, Ancoats Gardens provides an exciting residential property investment UK opportunity, offering net yields of 6.0%. Available from £229,714 and already under construction, the one, two and three-bedroom apartments offer bright, spacious homes backed by cutting edge facilities in a top location. Residents will benefit from an on-site coffee lounge for relaxing or working from home, a large, private gym that’s spread across two levels and a truly stunning rooftop garden providing views across the city.

To find out more about investing in one of England’s best-performing regional cities, follow the Surrenden Invest team on social media.