Is UK property still a good investment?

Andy Foote. sales director at Seven Capital

By Andy Foote, Sales Director at SevenCapital

The last 12 months have certainly been eventful for the property market. First Brexit was triggered, then came the removal of tax-relief on mortgages for higher-level taxpayers in April. Following this, in October stricter rules were introduced on lending for larger-scale investors in the buy-to-let market, and the recent Budget announcement that stamp duty has been scrapped for all first-time-buyers on properties worth up to £300,000. It’s no wonder that many an investor has paused for a moment to weigh up their UK assets. However, confidence in the property market remains, and there is still much to be gained as an investor, as long as you do the maths.

Whilst property investment in the Capital has stagnated somewhat due to sky-high prices, particularly in the residential market, considerable attention has turned to regional cities such as Birmingham, and commuter towns on the outskirts of London. These areas have in recent years welcomed an influx of investment from global corporates, into infrastructure, and into residential and commercial development, which, along with lower prices than the Capital, has increased their appeal significantly as places to both live and work.

And where popularity and demand increases, so do house prices. According to the latest Hometrack report, UK city house price inflation has increased to 6.1% across the UK, despite earlier fears of a post-Brexit drop, with Manchester and Birmingham topping the list as seeing the highest growth at 7.9% and 7.4% respectively.

This means that there is still opportunity for UK investors looking to make gains on capital growth, and likewise, with a weak pound, this offers an opportunity for ex-pats and overseas investors looking to buy property at a comparatively low rate, with some confidence that the market is still moving in the right direction.

For buy-to-let investors, whilst rules affecting access to lending have tightened and taxes have increased, the fact remains that currently there is an increasing number of people who can’t afford to buy, or may choose not to, so their market for returns through rental yields also remains strong. Again, as long as you have a good grip on your finances, the potential to gain from this type of investment is still good.

Of course, ensuring your investment is the right one is as much due to choosing the right type of property in the right area and at the right price.

Birmingham, Manchester, Liverpool and Hull are all regional cities that have recently been identified as the best places to invest. Likewise, towns along the much-anticipated Crossrail route into London, Slough in particular, are also tipped as top places to invest due to their growing popularity as a result of this major infrastructure development.

What’s key to all of this is that the UK still has a huge shortage of available, affordable housing. Demand for homes continues to increase at a much higher rate than they are being built, which means that as these cities and towns continue to grow in popularity, there will be a continued supply of tenants and buyers looking for their next place to live.

So, from an investment point of view, whilst the rules may be more stringent, and likely to become even more-so come next April, for those looking for capital growth or long-term gain from rental yields, the market remains strong.

For more information or to enquire about property investment with SevenCapital email sales@sevencapital.com or call 0121 314 3486.

For more information on SevenCapital visit www.sevencapital.com.   

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