Why serious landlords are choosing now to invest in the UK

Emma Martin, 23 January 2019

You’d be forgiven for thinking that the buy to let market is experiencing a slowdown as a result of Brexit uncertainty. Scaremongering headlines are never far from the front page and as such many, more wary, investors are exercising more caution when investing, and some are choosing to hold off from buying or selling entirely until the fog has lifted regarding Brexit.

However, this certainly isn’t the picture across the board, and other more prolific landlords are finding that now is the perfect time to be investing in UK buy to let, with a low exchange rate and excellent deals to be had in markets which are on an upward curve.

The reality is that the rising demand for quality homes from a growing pool of renters is showing no signs of slowing, with 56% of renters tied into the Private Rented Sector because they can’t afford a deposit, up 4% year-on-year. With this unlikely to change any time soon and attitudes towards homeownership shifting, putting luxury renting as the more popular option, experts forecast that there will be 11.4% rental growth by 2023, with house prices expected to rise by 13.1% over the same period.

In fact, recent data from Hometrack and the Office for National Statistics demonstrates the impact of Brexit on property prices in cities and urban areas has been negligible, with Aberdeen being the only tracked city to see a reduction in average prices since the 2016 referendum. The report noted that there has been “no immediate deterioration” in either prices or market activity in the time since the initial 2016 vote.

Richard Donnell, insight director at Hometrack, said: “Two and a half years on from the Brexit vote, our analysis reveals a limited direct impact from Brexit uncertainty on the housing market thus far. Large regional cities continue to register above-average house price inflation, with the discount between asking and sales prices narrowing on rising sales volumes.”

Some cities such as Birmingham, Edinburgh and Manchester have actually experienced prices rise by an average of 15% over the two years since the vote – a sign of healthy and competitive property markets stimulated by factors like population growth. Even Central London, an area considered to be going through an extended rough patch, has seen prices increase 2% since the 2016 referendum.

All of this indicates a buoyant property market in the UK which we only expect to grow thanks to sustained demand – something which is appreciated by serious domestic investors and those overseas. Foreign investors can also take advantage of the low exchange rates right now, for example American investors could make a saving up to US$26,430 on a flat priced at £200,000 thanks to the current value of the pound compared to the annual high – meaning now is the right time to be expanding.

Guy Bradshaw, Head of Residential at United Kingdom Sotheby’s International Realty, said: “We have already seen significant interest from American buyers who are eyeing up the favourable dollar to sterling exchange rate. The economy may look weaker today, but the property market is resilient and it is forecast to bounce back by 2023. Buyers adopting a long-term outlook will be making a savvy investment by purchasing in 2019.”

The current buy to let landscape is also perfect for landlords looking to sell as there is a reduction in the amount of inexperienced buyers in the market, opening space for serious negotiation between portfolio landlords keen to trade property.

If you’re looking to expand or restructure your portfolio, get in touch with yieldit today to speak to one of our expert consultants!


Why serious landlords are choosing now to invest in the UK

Emma Martin, 23 January 2019

You’d be forgiven for thinking that the buy to let market is experiencing a slowdown as a result of Brexit uncertainty. Scaremongering headlines are never far from the front page and as such many, more wary, investors are exercising more caution when investing, and some are choosing to hold off from buying or selling entirely until the fog has lifted regarding Brexit.

However, this certainly isn’t the picture across the board, and other more prolific landlords are finding that now is the perfect time to be investing in UK buy to let, with a low exchange rate and excellent deals to be had in markets which are on an upward curve.

The reality is that the rising demand for quality homes from a growing pool of renters is showing no signs of slowing, with 56% of renters tied into the Private Rented Sector because they can’t afford a deposit, up 4% year-on-year. With this unlikely to change any time soon and attitudes towards homeownership shifting, putting luxury renting as the more popular option, experts forecast that there will be 11.4% rental growth by 2023, with house prices expected to rise by 13.1% over the same period.

In fact, recent data from Hometrack and the Office for National Statistics demonstrates the impact of Brexit on property prices in cities and urban areas has been negligible, with Aberdeen being the only tracked city to see a reduction in average prices since the 2016 referendum. The report noted that there has been “no immediate deterioration” in either prices or market activity in the time since the initial 2016 vote.

Richard Donnell, insight director at Hometrack, said: “Two and a half years on from the Brexit vote, our analysis reveals a limited direct impact from Brexit uncertainty on the housing market thus far. Large regional cities continue to register above-average house price inflation, with the discount between asking and sales prices narrowing on rising sales volumes.”

Some cities such as Birmingham, Edinburgh and Manchester have actually experienced prices rise by an average of 15% over the two years since the vote – a sign of healthy and competitive property markets stimulated by factors like population growth. Even Central London, an area considered to be going through an extended rough patch, has seen prices increase 2% since the 2016 referendum.

All of this indicates a buoyant property market in the UK which we only expect to grow thanks to sustained demand – something which is appreciated by serious domestic investors and those overseas. Foreign investors can also take advantage of the low exchange rates right now, for example American investors could make a saving up to US$26,430 on a flat priced at £200,000 thanks to the current value of the pound compared to the annual high – meaning now is the right time to be expanding.

Guy Bradshaw, Head of Residential at United Kingdom Sotheby’s International Realty, said: “We have already seen significant interest from American buyers who are eyeing up the favourable dollar to sterling exchange rate. The economy may look weaker today, but the property market is resilient and it is forecast to bounce back by 2023. Buyers adopting a long-term outlook will be making a savvy investment by purchasing in 2019.”

The current buy to let landscape is also perfect for landlords looking to sell as there is a reduction in the amount of inexperienced buyers in the market, opening space for serious negotiation between portfolio landlords keen to trade property.

If you’re looking to expand or restructure your portfolio, get in touch with yieldit today to speak to one of our expert consultants!