Exploring the experts' thoughts on the current property market l Vesta blog

Exploring the experts' thoughts on the current property market

November 18, 2019

What are the experts’ thoughts on the property market in light of the political uncertainty, the ongoing Brexit saga and more recently talk of the UK sliding into a potential economic recession?

Savills say they had to do “even more head scratching than normal this year” when preparing their latest housing market forecasts. They are however forecasting that the average price of a UK home will rise by 15% over five years, with a Brexit-bounce only gaining a real foothold at the end of the transition period (i.e. from 2021).

From our perspective, whilst we understand there are a lot of assumptions involved in creating these forecasts and significant variations across the regions, overall it does indicate, combined with the current low mortgage interest rates available, that it could potentially be a good time to purchase investment property.

The recent RICS Residential Market Survey released earlier this month shows upward pressure on rental yields which they suggest is primarily driven by tenant demand outstripping supply of rental property. Not great news for renters however it does potentially mean better returns for investors. If the Government continues to target small landlords this is only going to be exasperated as more of them choose to sell-up and cash in.

Research from Knight Frank this month showed that the UK property market is very much top of the preferred investment list for 2019 amongst European real estate investors. So, while many UK based landlords are selling-up there is significant demand from foreign investors looking to step in. The current low value of sterling makes investing in UK residential property potentially even more attractive to foreign investors.

Around a third of Vesta’s website visitors are located outside the UK and originate from over 140 different countries indicating significant foreign interest in UK investment property.

Every investor has a different strategy and a different view, however in the UK this independent research shows that the demand for rental property is growing and there is simply not enough new supply coming into the market so we expect that this asset class will continue to be very attractive to both domestic and foreign investors.

Important Note

All information contained in this website is provided as a guideline only, is based on estimates and assumptions, may not be accurate or complete, and is subject to change. We make no representations or warranties with regards to this information, expressed or otherwise. A buyer who relies on such information does so at their own risk. Buyers are advised to seek independent financial advice and should undertake their own due diligence.

Your capital is at risk. Property values may decline and the property might not be able to be rented at amounts sufficient to cover debt interest costs, operating expenses and liabilities, and might not result in a positive cash flow. Property is an illiquid asset and should not be viewed as a short-term investment.

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