Find out what’s happening in the property investment arena both in the UK and internationally
From good to great – a full house of fabulous facts and figures for the UK housing market
May 2, 2014Article by Ray Withers
The news has been nothing but good for the UK housing market recently, with Nationwide reporting a 10.9% year on year price rise in April – the biggest annual increase since June 2007. Prices jumped by 1.2% overall for the month, faster than analysts had predicted.
Ray Withers, Chief Executive of specialist property investment company Property Frontiers, explains,
“The continuing pattern of demand outstripping supply in the UK is pushing prices up. We simply don’t have enough homes to meet demand. Interest from overseas investors, such as high-end French earners looking to avoid the 75% tax rate in their home country, and wealthy Russians looking to invest in the stability of the UK housing market, is further driving up prices.”
A full house
The Nationwide data comes at the same time as figures from HMRC confirm that the number of transactions in the UK has risen substantially as well. The data showed sales figures were 19% higher in March 2014 than they were the year before, with some 94,080 transactions in total.
In a full house for the UK housing sector, projected data for the year ahead was also positive, with a survey conducted by Markit and Ipsos MORI for Knight Frank showing that 5% of UK households plan to purchase a property in the next 12 months.
Coming in from the country
Additional data from Knight Frank also points to the movement of buyers away from country piles and towards the increasingly popular new class of ‘prime urban’ real estate. Buy-to-let investors in particular are attracted to these high-end, modern developments due to their popularity as rental accommodation for young professionals.
Property Frontiers’ Birmingham city centre apartments epitomise the luxurious apartments that investors are looking for, as demonstrated by the development’s popularity since its launch. Available from just £104,500 and with expected yields of between 7% and 8%, the apartments are part of the wave of prime urban properties that have generated price increases of 3.4% between December 2013 and March 2014, according to the Knight Frank figures. When looked at on an annual basis, the prime urban rise averages 8.2% in the year to March 2014, compared with just 4.1% for rural properties over the same period.
The ideal time to buy
Property Frontiers’ Ray Withers confirms that the full house of positive figures – for both the market’s performance over the past year and the expected movement for the year ahead – makes now the ideal time for many buyers,
“This stage of the property cycle is always an exciting one. We’re seeing some really dynamic movement within the market and both homeowners and investors are set to benefit from the changes.”
The state of the market has inspired Property Frontiers, which is ever at the forefront of the property investment sector, to consider carefully the next prime urban developments for its buy-to-let investors. Though Withers isn’t giving much away, he does hint that Doncaster is a place to keep a close eye on.
Wherever the next development is, one thing is certain – with so much positivity and movement in the market, the next batch of prime urban properties are going to be snapped up fast indeed.