The UK Property Investment Market: One Special Real Estate Trend to watch out in 2018 for RE investors

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Currently, the UK property market continues to steadily grow and show overall positive dynamics. At the moment property market in the UK continues to attract more and more RE investors interested in purchasing real estate assets in Britain, Scotland and Northern Ireland. According to the official report from the UK House Price Index Summary for May 2018, average house prices in the UK increased by 3.0% in the year to May 2018. At the country level, the largest annual price growth was recorded in Scotland, where house prices increased by 4.9% over the year to May 2018.
There are several reasons why the UK property market is considered to be a good investment choice. First, it has good gross annual rental yields which generally vary from 12% to 17%. Second, the UK is famous for its excellent financing and banking services and for its century-long successful investment history. Some may argue that Britain has actually been one of the creators of the investment concept because it had engaged in investment strategies even in the Victorian era and even before that. Finally, the UK investment market offers a great diversity of the residential property, which is also very important for the investors who wish to diversify their portfolios and invest in different types of assets which can potentially bring absolutely different yields and offer less risks.

Here is one of the most important real estate trends we may potentially expect from the property market in the UK in 2018:

The real estate rental market is expected to go up, something to look out for RE investors.

According to the official survey, provided by the Royal Institution of Chartered Surveyors (Rics) which was published by the Guardian, the UK rents are expected to go up by 15% in the next five years. How so? You may ask and we will answer.
As the Rics put it, the supply of rental accommodation diminished while demand from tenants continues to go up. As the result, the price to rent an apartment in the UK is expected to skyrocket despite its already high prices. Furthermore, according to the same survey, it is predicted that already in the next 12 months the rent price will go up by as high as 2%.
So as you can see, the change may come really soon, that`s why more and more investors are looking out for the rental projects in the UK property market. It`s no wonder why they do it. It`s almost a necessary choice for most people living in the UK to rent, rent and rent again.
The UK is extremely attractive as a country due to its excellent job market, a prestigious educational system which is considered to be one the best in the world and also a huge number of tourist attractions. All these factors are the reason why millions of people from all over the world move to the UK each year for a short-term visit or to relocate permanently. Naturally, the demand for renting an apartment is always growing because not many people are able to purchase property in the UK property market. That`s why the rented apartment is the most popular option for people who are moving to the UK. It`s something everybody had been looking for in their lifetime and something that will always be needed.

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Here is another reason why we believe that rent prices will be going up. According to the Guardian, figures from the tenant referencing company HomeLet showed average rents in London rose 3.3% year-on-year in July 2018 to £1,615 while the average rent in the rest of the UK was up 1% to £777. That`s why it may be very reasonable for the RE investors in invest in assets that are rented.

At the moment, we have the UK Property Bundle available on our platform. It has several properties which had been rented for a long time in Scotland. As you can see, the UK property investment market shows some good trends and we believe that these trends will potentially bring benefit to our investors who chose to invest in the UK Property Bundle.

 

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Sources

  1. https://www.gov.uk/government/publications/uk-house-price-index-summary-january-2018/uk-house-price-index-summary-january-2018/uk-house-price-index-summary-may-2018
  2. https://www.theguardian.com/business/2018/aug/09/rents-in-uk-will-rise-for-next-five-years-experts-predict