Why invest in UK Property in 2022?
In this article we shine a light on some of the reasons why you should invest in UK property in 2022. Additionally, we highlight a few things to consider before taking that next step. For example, do you have enough capital? Or have you considered the time involved in investing, if you are looking to invest on your own?
Invest in UK property: House Price Growth
As you will already know, most industries have experienced a very difficult couple of years due to the global pandemic. However, the UK housing market has been an exception to the rule. Evidently, over the past 12 months UK investing has increased rapidly. Moreover, looking into 2022, it’s only set to grow further. According to Savills, over the next 5 years, UK property is expected to grow by 21.5%.
Buyer Confidence Drives Activity for UK Investing
Buyer and Seller confidence is one the biggest factors that shape the housing market in any country. Although there are many external forces affecting the market, this confidence has remained high over the past 6 months. Interestingly, 75% of active buyers across the United Kingdom were confident they would purchase a property in the next three months. Furthermore, sellers were 81% confident that they could sell a property in the next three months.
Those interested in investing in UK property would do well to consider how this level of demand is impacting supply and what that could mean for prices going forward.
Property Investment in the UK Driven by Undersupply
One of the most important things to consider when investing in UK property is the supply and demand.
With Buy-to-Let in the UK worth over £1 trillion, research estimates that there will be more people renting in the UK than people who own a home by 2039. This represents nearly 125 million households in the private rented sector, which is set to grow even more. This goes to show why investing in UK property is so advantageous right now and moving into 2022.
UK Population is Rapidly Increasing
From 2018 all the way to mid 2028, the UK population is set to increase from 66.4 million to 69.4 million. That is an increase of 3.0 million or 4.5% in just a matter of 10 years. This rapid increase in population will further increase demand for housing, making property itself more valuable.
Moreover, England has seen the biggest increase in population out of all the countries within the United Kingdom. England’s growth is 5.0% compared with 3.7% in Northern Ireland , 2.7% for Wales and 1.8% in Scotland.
First Steps to Invest in UK Property
Now that we have outlined why you should invest in UK property in 2022, here are a few things to consider before taking that next step.
What is your budget for investing in UK property? Overall, you need enough money for a deposit to begin your journey up the property ladder. As Bankrate puts it, “In almost all cases, you will need a deposit of at least 5% of the property price. But the average house deposit for a first-time buyer in the UK is around 15%. The bigger the deposit, the lower your mortgage interest rate and the smaller your monthly repayments.”
As with any form of investment, there are a couple of routes you can take. The first is to be extremely active, this involves buying a property yourself, maintaining its upkeep as well as managing the tenants. Secondly, property investors can pay someone a passive to acquire and manage the properties for them. This has the benefit of saving the investor a lot of time. Usually, it’s done by investors who have a full-time job and want to increase their portfolio or make more money on the side.
Property investment, like any other form of investment, does come with some risks. One of these risks is having a lot of your investments (or money) tied up in the physical property. Even the extremely wealthy have on average around 21% of their capital tied in the property.
Invest in UK property in 2022 with Closefield Property
As mentioned above, the UK is one of the most secure and stable property markets around the world. However, if not done correctly then property investment can become very costly and lead to a lot of headaches. Due to this, it’s very important to work with professional consultants with a proven track record in the property industry.
At Closefield Property, we leverage the knowledge, connections and resources that we’ve built over the years to help our clients benefit from property investment. If you are looking to enter the property investment market or to simply grow your property portfolio, book a call with us today.