There may come a time when we’re not talking about the astonishing rise in house prices, but today is not that day, and it may not come this year or even the next.
The UK, despite rising case numbers, appears to have broken the link between cases, hospitalisations and deaths, meaning that the government appear increasingly confident that they’ll be able to lift all remaining restrictions on 19th July.
This has meant lift off for the economy, and all the indicators are that the recovery will see one of the fastest and biggest growths in UK GDP in our history.
Property, running somewhat counter to the wider economic narrative of recession and doom, had a very impressive 2020, as well as an impressive first half of 2021.
Landlords, investors, buyers and sellers have all been pleasantly surprised by how robust the market has remained over this time, and in fact it has performed way above expectation.
Certainly, we’ve seen a marked increase in enquiries from customers about buy-to-let opportunities as most landlords and investors expect the market to perform strongly over the next 12 to 18 months.
There’s now more evidence emerging to support this.
According to new data released by Nationwide, which tracks UK house prices, and reported by the BBC, house prices have risen again.
According to the report, “UK house prices rose 13.4% in the year to June, the fastest pace since November 2004, with the average house price increased to £245,432 from £216,403 in June 2020.”
Nationwide chief economist Robert Gardner said lots of people had “reassessed what they want from home” in terms of space and where they live as a result of the coronavirus lockdowns.
“The pandemic is an unusual kind of shock - it has stimulated housing market activity rather than the shock holding back the market which is normally what happens,”
This ties very much into what we’ve been saying for some time in that the pandemic has had the reverse effect of what many had expected, and what has happened before, in that it has made people prioritise their living space in a way not seen before.
This has a few knock-on effects for landlords and investors. Firstly, it means that the value of their assets is increasing at a rate not seen in decades and subsequently increasing their wealth at the same rate.
Property remains one of the safest asset investments in a world that is still in a volatile position following the pandemic.
Secondly, however, it also shuts out many first-time buyers from the market which in turn is driving demand for rental properties and therefore increasing upward pressure on rents. This means that not only are landlords seeing their asset(s) increasing in value, rental yields are also following at nearly the same pace.
This has driven a huge drive in demand for buy-to-let property from established and new investors. If you’re thinking of investing for the first time or expanding your portfolio, you’d be well advised to be quick.