Is it a good time to invest in the UK? In light of the economic uncertainty sweeping over the UK, you might think that this is a bad time to invest in the UK property market in particular.
Many have been dissuaded from investment, with all the general uncertainty over the state of the future of the UK in Europe. On the contrary, experts have assessed the post-Brexit situation and judged the mid-cycle wobble the perfect time to take advantage! Here are a few reasons why:
Interest rates have been low for some time, driving property value as it is easier to borrow. With mortgages coming cheaper, it’s a great time to take advantage and borrow to invest. It also means better leverage on your money, as your return on investment is better in property than other forms of interest-led investment (like term deposits, etc). Make a much better return in property, which maintains its value well in the UK, as population rates continue to create demand.
This is driven by employment and wages, and the return on rental accommodation has risen significantly this year. Rents continue to rise, and along with dropping arrears and shorter average void periods, there is longer term strength and confidence in the private rental market. Demand maintains itself well in this sphere, and there are several emerging cities that are becoming increasingly worth investment, such as Brighton.
As an expat, you have the potential to gain from the weakened GBP post-Brexit. Take advantage of earnings in other currencies now being worth more in the UK, making this the perfect time to realise your investment potential in property. With record conversation rates, property prices now come at a “discount” for those who are buying from foreign shores.
Potential yield increases
Yields or returns on investment may rise as house prices fall, though it should be noted that this won’t last long. Rising prices are already starting pick up, however rental demand remains strong. Take advantage of any sign of house prices falling to maximise your potential return, as rental margins remains steadily on the increase.
Supply and demand issues
While the population continues to grow steadily, there are questions around the future of the construction industry, which already faces a skills shortage. Costs are rising, and the demand for new housing is not being met. This is likely to exacerbate if the population rate continues, making this an opportune time to capitalise on a lack of supply. Construction to meet the demand has remained quite slow and insubstantial in the rate of increased numbers requiring housing in particular; therefore there is ample time to capitalise on this fact.
Overall the UK property market shows all the signs of a positive time to invest. Inflation being low, unemployment falling and the economy continuing to grow lay out the fundamentals required for positive property investment conditions. Take advantage of the mid cycle wobble, before we move through to the next part of the 18-Year Cycle. Buy-to-rent investors are in prime position to make good returns on the property situation in the UK.