Continued Increase in UK Property Demand Great News for Investors
In unsurprising news, RICS has announced that UK housing demand continues to increase. November’s figures show an increase in buyer enquiries by 3% over the previous month (up to 13% in November from 10% in October).
This demonstrates a third consecutive month of increases in the number of prospective buyers on the UK housing market.
“Although there are some signs that the numbers may begin to edge upwards in the new year,” says RICS Chief Economist, Simon Robinsohn. “The combination of macro uncertainty, the on-going supply shortfall, with stock levels around historic lows, and the myriad of tax changes impacting on buyers suggest that any pick-up in activity will be relatively modest. This is significant not just for the housing market itself but also for the wider economy given how much of consumer spending is tied in with home purchases.”
There are no signs that the current UK housing shortage is likely to ease off any time soon. New sales instructions rose from minus 3% to zero in the same period. Seller numbers, therefore, are slightly higher, but not enough to meet the continually strong demand.
Where there is a discrepancy between the sales market and buyer market like this, it implies that more people are either moving direct from rental accommodation, or are first time buyers. The buy-to-let market, however, is still strong, despite stamp duty hikes and tax changes implemented at the start of the 2016-17 tax year.
UK Property Demand Rises Pleases Investors
All of this, of course, is great news for property investors. With such high demand for housing, and the value of properties still on the rise (albeit less so than in earlier months of the year), the chances of significant gains, in buy-to-let, new development or ‘flips’, are looking good.
Most of the UK is continuing to see an increase in prices, particularly in the North West, where the market is booming. Week after week, we are seeing fresh reports of the continuing rise in popularity of properties in the Manchester area.
This is, in part, due to heavy investment in development of the city’s infrastructure, and an influx of businesses relocating to the area. These new businesses, bringing fresh jobs to the North West, are further increasing demand, particularly in the rental sector, as young professionals continue to find promising careers in the region.