Property Asking Prices Hit Record High! Is Now a Good Time to Buy?

The asking price on the average UK property has hit a record high of £338,462.

‍

Property Asking Prices Increase 0.3% Month-on-Month

‍

Asking prices increased by £1,091, 0.3% month-on-month in September according to RightMove.

Property prices are now 13% higher than pre-pandemic, due to the limited supply and a surge in buyer demand.

‍

Insufficient Supply of New Homes to the Market

The supply of new properties to the market remains constrained, running at 26% below 2020 levels, down 33% compared to 2018-19 levels.

This constrained supply is leading to fierce competition amongst buyers in the secondary housing market (re-sale properties). Those buyers who are better positioned, for example First Time Buyers (FTB) with a mortgage offer, buyers who have already sold and cash buyers are securing properties over those who need to sell.

‍

Property asking prices are expected to remain buoyant for the rest of 2021 with the 225,000 shortfall in the number of properties for sale.

‍

Surge in Property Buyer Demand

The surge in demand from property buyers has been as a result of many factors:

‍

• First Time Buyers (FTB) can now purchase with a 5% deposit
• Stamp Duty Holiday presenting huge savings on the cost of moving
• Reassessment of housing needs, where home is now also a place of work and study
• Green space is highly sought after whether it's a house with a garden or an apartment with a manicured communal garden
• Flexibility of work where many now do not need to travel to their place of work every day
• Insufficient levels of new build as 345,000 new homes per year needed and just 244,000 being built

‍

Is Now a Good Time to Buy a Property for Investment?

Property prices have increased over the past year and they are expected to increase up to 4.5% in the North West in 2022 (Savills).

Demand for rental property is at a 5-year high, increasing by 8% in Q2 2021 compared to Q1 2021, reaching the highest levels in five years, following the easing of the COVID restrictions and the UK economy bouncing back, with the UK economy seeing 4.8% growth in Q2; therefore, property investors are seeing strong levels of rental growth a minimal rental voids. Click here to read more.

Buying in the secondary re-sale property market may not prove the best strategy, as you will be competing with home buyers who are more emotionally invested in a property purchase and are more likely to pay over what would be an acceptable price for a property investor.

Buying off-plan new build property can provide the perfect opportunity for buy-to-let property investors to capitalise from property price growth during construction providing an excellent return on their deposit. Many off-plan properties are also sold with excellent incentives, such as discounts, stamp duty and legal fee contributions to reduce your cost of buying, which you wouldn't get with the secondary market. You can also choose the best property in a development if you buy early, as opposed to whatever property is on the market when you want to buy as you would get with the secondary market.

‍

Where Can I Invest in Property for the Highest Returns?

The North West of England, cities such as Manchester, or, Liverpool are expected to see price growth of 28% in the 5-years to 2025 (Savills) and rental growth of up to 16.5% (JLL). These cities are seeing huge levels of regeneration and inward investment, a catalyst for economic growth and increasing its local population and in-turn demand for housing.

‍

• Manchester Buy-To-Let Property Investment
• Liverpool  Buy-To-Let Property Investment

‍

‍

‍

‍

‍

‍

‍