A Positive Outlook for Property Investment

Amid every crisis lies opportunity, and this rings especially true for the UK property market. Investors have been placed ‘on hold’ as the coronavirus pandemic saw a halt on property markets across the world.

UK Property Market Resumes

The property market has now re-opened, and recovery is well underway, particularly for the buy to let market. Soaring demand for rentals is now being seen across the UK as tenants are eager to move post lockdown. The rising demand for rental properties, together with a shortage of supply is excellent news for investors who may see more substantial rental yields going into the second half of 2020.

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Surging rental demand, together with all-time low-interest rates, make the current climate very favourable for investors who are returning to the market in force. Further support for the property market could come in the form of stamp duty holidays, with many advocating for scrapping the surcharge to stimulate the economy post lockdown.

North West Property Market Booms

There have been stand out areas in the UK where tenant demand is soaring. RightMove has revealed the top-performing areas by region. The North West makes the list with demand now 21% higher than it was for May 2019. The North West region also boasts the highest year-to-year increase in demand for sales.

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This increased demand continues to be seen post lockdown with people relocating to areas of the country with better value housing. Demand for areas with higher property prices, such as London, is still in decline.

Interest rates and the Current Lending Market

It has now been one month since the Government announced in mid-May that the property market could be re-opened. Since then, the mortgage market has seen some notable changes. Lenders have been more conservative in their practices with higher LTV (Loan to value) mortgages being put on the back burner. While this has been bad news for some, including first-time homebuyers, it has been good news for others.

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Investors with access to more significant deposits are taking advantage of all-time low rates and more competitive products returning to the market. The latest data on the buy-to-let (BTL) market shows that the number of products in the sector increasing, with 280 more BTL products available now than there were at the start of May.

Could we see a Stamp Duty Holiday?

The Royal Institution of Chartered Surveyors (RICS) has called for a stamp duty holiday, which has been used in previous downturns to kickstart the property market. The current stamp duty threshold for residential property is £125,000, increasing to 12 per cent on the portion of any property valued of £1.5m. The surcharge for second home buyers starts at 3 per cent, making a potential stamp duty holiday most welcomed by investors and those at the higher value end of the market. While a stamp duty holiday may be a useful tool to stimulate the property market post-COVID-19, increasing public debt levels may mean that Government will wait and see how the market performs on its own.

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Contact Us

If you’ve been considering a property investment, the North West has considerable opportunity, and The Heaton Group will have a wide array of developments to suit all requirements.

To speak to us regarding your next investment, please email us on info@heatongroup.co.uk or call 01942 251945

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