The current situation regrading whether or not Brexit will take place seems to be causing some uncertainty in the property market in the United Kingdom. This seems to exerting downward pressure on property values. Price growth seems to be slowing, the British economy seems to be entering a period of uncertainty and property transactions themselves seem to be stagnant. In addition higher interest rates and the possibility of tighter rules and regulations governing both property purchase and ownership in the buy-to-let market and mortgage affordability issues are all putting a damper on the mood of property investors.
So given this situation is investing in UK property worthwhile? The question is certainly worth asking but the answer may not be as simple as many investors might wish. there are a a variety of moving parts that influence property value and the advisability of investment at any point in time – and each of these plays a part in informing the investor as to the current advisability of property investment in the United Kingdom.
So – we come back to the question – is investing in UK property worthwhile at this point in time?
According to analysts this time of uncertainty represents a sweet spot for the savvy property investor who wants to muscle in on the British property investment market. In fact many believe that there are bargains available at the moment that simply will not be there in a year or two.
It is widely accepted that property values are cyclical in nature. Many analysts believe that the U’K. is at the tail end of such as cycle and that the next cycle will see property prices showing steady growth. However – this cycle is by no means geographically monolithic in nature. In cities such as Manchester and Liverpool the new cycle is already underway and property prices are beginning their upwards trend. In places like Aberdeen and (parts of) London the old cycle is still prompting a negative trend in pricing – but one that should correct itself in the short to medium term.
There is still enormous value to be had in cities such as Glasgow and Newcastle which are still to feel the contagion / ripple effect of the enormous property value growth that London experienced in 2016. Cities such as Oxford and Cambridge benefited from London’s incredible property book approximately three years ago. In fact property prices in those cities is today 50% higher than it was only a decade ago. Property values are largely self correcting and the steady trend of property value growth over the medium and long term is assured (at least given historical data).
Even today, amidst the gloom of falling prices in the London area there are those who believe that the market in the region represents an excellent opportunity for property investors. The gap between what sellers want in London and what buyers are willing to spend is narrowing. This can only mean that the self correcting nature of the property market is coming into its own, This may be the right time for property investors to take another look at opportunities in the U.K. property market.