UK Property Asking Price Increase

UK property asking price increase

19 Apr 2019

Property Prices in the UK

London real estate is considered safe for long-term growth, although Brexit caused stagnation, and the transactions were down in the last three years as the UK prepared to exit from the EU. However, the market witnessed positive growth in the last weeks. The asking price of houses increased for British homes in the first week of April compared to last year, where clear signs of recovery and bottoming out could be seen. 

At least a 1.1 per cent monthly rise in asking price was reported by Rightmove. The property market data show the price decline stopped in the early months of 2019, and now the market has stabilised, encouraging buyers to take action.

Buyers are relieved that the impact of Brexit will be less than expected, and many want to benefit from the current static rates and low fixed-rate mortgages. Buyers are also motivated by the rise in rents in the cities like London, where rents rose 3.7 per cent in March to 1,737 pounds a month (Hampton's data). The rent in the capital is at least 2.3 times higher than in other regions.

Since 2016, the price grew double-digit by 16 per cent in Birmingham. In Manchester and Leicester, price growth was 15 per cent, mainly due to an increase in the inflow of investment towards regeneration projects, house building, transportation, and infrastructure development. Nevertheless, the price is low in comparison to the capital.

The domestic and foreign investments remained strong; in January 2019. The residential properties were 1.3 per cent higher than a year before.

New Home Construction Remains Slow

In 2018 summer, the Prime minister assured of 300,000 new home constructions that will be available by the middle of the decade as progress has been made in this area through multi-billion funding and planning reforms. Still, the progress remains slow even after the construction of 220,000 new homes in 2017-2018.

A recent study by Litchfield states that 50 per cent of the local authorities may fail the home building test, and only 44.1 per cent are expected to meet the new home plan demands.

Further, overseas investment in UK properties continues to grow where the investors from UAE and South Asia see such properties as more attractive in terms of growth and rental earnings. The shift of investors to regions like Dublin, Paris, Portugal, Spain and other territories in the last few years was mainly due to the Brexit uncertainty.

On average, Paris's growth rate was 6.2 per cent, while the higher-end properties remained attractive and lesser priced. Dublin offers a high-end London neighbourhood at a reasonable cost.

Not just the residential and commercial markets, the real estate healthcare investments were up 13 per cent as per the recently recorded transactions (reported by Healthcare Capital Markets 2019) that found the total value of the transaction was £1.49 billion in the last year. In addition, the overseas investments grew 20 per cent, almost equivalent to 2013 rates and 70 per cent of the investment was made from abroad.

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