The property market’s fundamentals will remain positive in 2018 despite 2017 being a mixed bag for the UK residential market. House prices increased by 4.5% in the year to October, according to ONS, and HMRC revealed that the rate of residential transactions is 7.1% higher than a year ago.
Even though the London market became quiet, cities such as Manchester, Liverpool, Leeds, and Birmingham performed extremely well over the year and offered capital growth to its investors. This performance is predicted to be sustained, with Leeds being predicted a 25% capital growth and 6% in yields over the next five years.
One of UK’S hotspots for property investment is Birmingham due to its student population, growing local economy, and high returns on property investment. The long term growth in the regions looks extremely positive as more and more businesses relocate their operations outside of London.
Hamish Pound, Head of Investment at IP Global, believes that the Brexit negotiations will not affect the market and its strong fundamentals. Even though there is a lot of political noise around this issue, the residential market has always managed to thrive and overcome challenges.
The Government will not risk causing instability by taking foolish decisions that can damage the health of both the housing market and the wider economy. If anything, policymakers will most probably try and stimulate activity in the housing market rather than stopping it altogether.
“While investing in the UK residential property market won’t necessarily be plain sailing in 2018, I believe that intelligent investors who take a measured approach to their portfolios will not be disappointed. The economic outlook might cloud, but short-term volatility will not alter the fundamental imbalance between supply and demand in the market,” concluded Hamish Pound.