Why should you invest in UK property in 2022? As one of the most popular markets in the world, property investment in the UK remains a clear opportunity to build long-term returns.
Over the past five years, new measures introduced by the UK government have impacted the buy to let market. Conditions such as reduced tax relief available to property investors and second home buyers have made buy to let property more complicated for some. However the fundamentals of the market, such as the demand for rental property, have remained strong.
According to the Office for National Statistics, the number of households in the private rented sector in the UK increased from 2.8 million in 2007 to 4.5 million today, an increase of 1.7 million (63%) households. With the creation of a further 1.2 million new households over the next 6 years, the demand for private rented property is set to continue to grow.
We headed over to Savills to check out the winter 2021 Residential Property Forecast and how this looks for the buy to let market.
According to Savills, the north-south divide will continue to close over the next five years with house price growth across the North of England and the Midlands excelling. House values in the South and South East will continue to rise, but at a slower pace.
Projected growth looks very positive for Northern Powerhouse cities like Manchester and Liverpool with the wider North West region expected to see values climb by 4.5% in 2022 and by 18.8% in the five years to 2026.
2022-2026 (5-year cumulative)
Yorkshire & the Humber
East of England
Regional price growth in the North and Midlands is set to continue outpacing the traditional London market, while individual cities within these regions are expected to over-perform.
Buyers looking towards future demand should consider tenants affordability. With regional cities already attracting higher levels of students and young professionals than London, prime locations with younger populations, including Manchester, Liverpool, Leeds and Birmingham, offer strong rental yield growth over the next five years.