Is UK property still attractive for investors?

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The worldwide property market seems to move at lightning fast pace that sometimes markets which were in vogue yesterday seem to fall by the wayside. While there is no doubt that the UK property market has been something of a magnet for both domestic and international investors of late, is it still as attractive for investors going forward?

There are a number of factors to consider when looking at the UK property market many of which suggest there could be significant long-term growth to come.

Rising population

Immigration and the UK population are never far from the headlines and the fact that the population keeps increasing year-on-year underpins demand for UK property. There may well be a few tweaks in the future with underused council properties, where bedrooms lie dormant, likely to be used more efficiently. However, the fact that the UK population will continue to rise for some time to come is a major positive sign for the market.

It is also worth noting that while David Cameron is looking to rewrite the U.K.’s agreement with the European Union, freedom of movement within Europe is likely to continue for some time to come.

Lack of new build properties

The lack of new build properties in the UK is a very interesting subject because while there is no doubt current figures are anywhere up to 100,000 short of those required, there are literally hundreds of thousands of properties lying dormant. The problem seems to be a lack of new build properties in affluent areas of the country which obviously attract more people because of the employment opportunities. Whether future governments and local authorities will be able to reduce pressure on property hotspots by moving public services elsewhere remains to be seen.

Attractive rental yields

Rental yields across the UK vary significantly from relatively low single digits for “in demand” areas of the country to double-digit rental yields in some of the less affluent areas. This variation in rental yield, as well as quality of properties, offers something for everybody. It is also inevitable, at some point in the future, that investors will divert their attention away from the more expensive affluent areas towards the “value end of the market”. We have seen this to a certain degree in some parts of the country but much of this will be dictated by employment opportunities in the future.

Stable economy

While the UK economy comes in for criticism from time to time it is worth comparing and contrasting against the European economy which has been struggling since 2008. In many ways this is another backbone to the UK property market and with the UK refusing to take on the Euro (a troubled currency) this is yet another feather in the cap of the UK property market.

Conclusion

There are many different factors to take into consideration regarding the UK property market with the vast majority extremely positive. At this moment in time it is difficult to see any long-term change in the upward movement of UK property prices especially when you bear in mind the growing population and lack of new builds not to mention attractive rental yields and a stable economy. If you take a step back and look at the UK from a distance, does it not compare very favourably against European and international counterparts?

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