There is a genuinely positive consensus surrounding the UK economy at the moment, probably the most positive it’s been since pre-pandemic times. We’re edging closer and closer to a return to normality, the sun’s out and the economy is booming once again. The last week alone has been full of overwhelmingly positive news, especially in regard to the UK property market. From rising house prices to stamp duty savings, the last week in particular has been a promising one for property investors – so with that in mind we thought we’d take a look at some of the week’s highlights!
House prices rising:
The week got off to a brilliant start as Halifax released their latest House Price Index. The report found that house prices soared to a new record high in May of this year, rising by 1.3% compared to the month prior and a massive 9.5% annually. This impressive growth is the largest annual increase in seven years, once again showcasing the property market’s excellent performance throughout the last 12 months.
Russell Galley, Managing Director, Halifax had this to say regarding the impressive performance: “Heading into the traditionally busy summer period, market activity continues to be boosted by the government’s stamp duty holiday, with prospective buyers racing to complete purchases in time to benefit from the maximum tax break ahead of June’s deadline, after which there will be a phased return to full rates. For some homebuyers, lockdown restrictions have also resulted in an unexpected build-up of savings, which can now be deployed to fund bigger deposits for bigger properties, potentially pushing property prices even higher.
“Whilst these effects will be temporary, the current strength in house prices also points to a deeper and long-lasting change as buyer preferences shift in anticipation of new, post-pandemic lifestyles – as greater demand for larger properties with more space might warrant an increased willingness to spend a higher proportion of income on housing.
In addition to the record-breaking rising house prices, sustained rental demand has resulted in regional rents climbing by 4.0% over the course of the last 12 months. The data from Homelet found that every single region, bar London, saw a rise in year-on-year rental prices, resulting in a 6.4% increase on the average UK rental price when excluding the capital.
Looking at the rising rents on a regional basis, the East of England saw the most significant growth in the last 12 months – rising by 8.5%, whilst Scotland saw the highest month-on-month growth of 2.6%. The East Midlands didn’t fair quite as well as other regions, seeing a 0.7% dip in rental prices when compared to last month.
Buy-to-let hotspots revealed:
Rising house prices and rents are no doubt music to a buy-to-let investors ears, and the news of both coincided with an insightful new report on the UK property market, carried out by Thirlmere Deacon. The report takes a look at the top ten locations in the UK for property investment, highlighting the North West as the prime buy-to-let hotspots.
Places like the North West, as well as the North East, continue to offer an excellent investment location according to the report, offering a perfect mix of strong yields and excellent capital appreciation.
Director of Thirlmere Deacon, Stuart Williams, had this to say on the report’s findings: “Many of the Northern Powerhouse towns and cities are enjoying strong economic growth, rising property prices and a surge in interest from property investors. Take Sheffield for an example, located just across the Peak District National Park from Manchester, which, similarly to its northern neighbours, is creating large numbers of jobs, renewing its urban centre and setting itself some very ambitious targets for the coming years.”
Stamp duty savings:
Our final piece of positive news from this week is the revelation that over half a million people purchasing property are set to benefit from the stamp duty holiday extension. The research, carried out by GetAgent.co.uk, found that the extension of the stamp duty holiday is predicted to save homebuyers a massive £3.4bn.
The stamp duty holiday was just one of the incentives introduced by the Government in the hope of stimulating the market following the pandemic, and the effects of it have been evident for all to see. In the period between 1st January 2020 and 7th July 2020, prior to the stamp duty holiday, an estimated 1,370 homes sold for every one of the 189 days during this period. In the period since the stamp duty holiday came into play, this number has increased to a rate of 1,508 homes sold per day.
This plethora of positive property news further highlights just how well the market has coped with the last 12-18 months of uncertainty, further showcasing the potential of the UK’s leading investment class. If you’re interested in investing in property, why not take a look at Knight Knox’s available investment opportunities? Specialising in both residential and student property, Knight Knox are pioneers in providing high yielding, fully managed properties designed for both tenants to live in and investors to own – get in touch today here!