Annually, asking prices have increased by 1.1% across the country, with the highest rises of more than 4% being recorded in the West Midlands and Wales. The growth in asking prices reflects the continually increasing interest in property – more people than ever want to move house, and the competition pushes values up.
With that in mind, it is perhaps no surprise that further research released in May by Strutt & Parker expects average house price rises of at least 18% in the next five years. People aren’t going to suddenly stop wanting to purchase their own home, meaning that demand will continue to increase.
However, if we return to the Rightmove research, it is clear that the growth in asking prices has had an unexpected, yet unsurprising, side effect. The number of sales agreed by estate agents so far in 2018 is 5.4% lower than the same period in 2017 across the UK – it is hard to imagine this has nothing to do with rising asking prices.
So, what does this mean for the discerning buy-to-let investor? Quite simply, it is good news for any landlord, regardless of the size of their portfolio.
If asking prices continue to rise, and fewer and fewer people can afford them, then there is only one place which can provide accommodation en masse – the private rented sector. At the end of the day, it does not matter how much people wish to purchase their own home or how much time they spend on Rightmove; if asking prices continue to inflate then the pool of people who can afford to buy will only shrink.
From the perspective of landlords, this means that people will be renting for longer and demand for the best rental properties will grow concurrently. It is always a smart move to invest in your property in order to make it more attractive, but as the number of renters increases it becomes even more vital. A relatively small amount of money invested in a home could ensure that it is rented out at a high price for years to come.
After all, reliable research from industry bodies such as Knight Frank concludes that anywhere between a quarter and a third of the population will be renting by 2021. Despite reports about how tough some landlords are finding it, this is in fact a fantastic time to invest in UK buy-to-let.
Looking for your next investment? Have a look at Great Central, our latest development in Sheffield, one of the UK’s strongest rental markets.