Even in the midst of a cost of living crisis, the UK housing market continues to go from strength to strength. House prices keep rising and rents are following in all the major markets to the benefit of property investors from around the world.
The buy to let market in particular is moving faster than ever before. Savills reports annual house price growth averaging 11.2% across the country in May 2022 and this has spurred on those who are investing in property in 2022.
The agency further reports that, “the deficit of homes on the market will continue to support price growth in the short term before affordability pressures finally press on the brakes over the medium term. Our latest forecasts, released 31st May, predict annual house price growth to finish 2022 at around 7.5%.”
Nationwide figures show that this number may have already been exceed, with growth of 11% already seen this year according to their calculations. Further predictions from Savills have argued that house price growth could be as high as 28% by the end of 2025 if all carries on as it currently is.
With that in mind, it is no surprise that home owners, especially first time buyers, and investors are buying quicker than ever. According to TwentyCi, the number of sales agreed in April was 18% above pre-pandemic levels, while completions are only 13% higher over the same time period. This adds up to a reduction in the number of properties available on the market despite demand growing, and helps to explain why UK house prices in 2022 are on the up.
Of those sales, first time buyers and buy to let landlords are buying faster than those classed as home movers – people already on the property ladder who are upsizing or downsizing their personal properties.
Reflecting this, the number of mortgages granted to first time buyers is 16% above the 2017-19 average according to UK Finance, and this class of buyer has maintained their majority share of the market since October. Similarly, the number of buy to let mortgages given to landlords is 50% higher than pre-pandemic levels.
Research from Paragon shows that almost one in five existing landlords plan to buy a further buy-to-let property or properties in the next year, on top of new landlords who are entering the market. Despite the end of the Stamp Duty holiday and other recent taxation changes, many landlords old and new remain confident in the continued growth in the UK property market.
Overall demand is 25% higher than this time last year says Zoopla, and the property portal has also predicted we will see a total of 1.3 million sales in total over the course of 2022.
Where are the most popular markets at this time of accelerated purchasing? The London [LINK] market is the main beneficiary. Buy to let purchases in the city increased by more than 50% over the last year, and the reason for that seems obvious: rents in the capital have increased more than 16% in 12 months according to Zoopla, and this is bound to be attractive to anyone looking at property investment in the UK.
Richard Davies, managing director of Chestertons, a leading London estate agency, said: “After many house hunters put their search on hold or changed priorities over the past two years, we have since been registering enquiries from families wanting to finally make their move a reality as well as international students, international buyers and office workers who require a pied-à-terre closer to work again.”
As always, investors and homebuyers looking at property in London which could achieve the highest capital appreciation and rental income should look for places with strong transport links, proximity to green space and easy access to local cars, restaurants and shops.
This is the ideal time to buy before demand pushes property values even higher. Buyers can give themselves the best likelihood of securing high returns by making their next property purchase today. Want to learn more about investing in UK property in 2022 and the London market? Get in touch with our team today by clicking here >>