There is an overall lack of housing in the UK.
It’s a problem the UK’s property market has been on the cusp of for a while and, if the last 3 months are anything to go by, the issue isn’t going to go away any time soon.
New research shows that over the summer, the amount of new properties listed for sale in the UK dropped by around 20%.
In many cases a lack of availability has led to bidding wars which have ultimately contributed to rising property prices. According to the ONS, the cost of the average property increased by 5.2% in July when compared to the previous year.
Rise of the Buy-to-let Landlord
In many areas across the UK, buy-to-let landlords have been blamed for pushing up property and rental prices by snapping up investment properties which are suitable for first-time buyers.
However the tables may have turned on residential buy-to-let landlords.
In the summer Budget, George Osborne announced changes to the taxation of private landlords in a bid to even the playing field.
Currently, private landlords are liable to pay income tax on the profits they make after they deduct the cost of letting out their properties. This included the costs of mortgage interest on their property. Under the current system, landlords can claim up to 45% tax relief.
Under the new legislation – which will be introduced over the next 4 years beginning in April 2019 – landlords will be given a tax credit of 20%.
Many landlords argue that absorbing extra costs will hider their property portfolio however, property experts believe that landlords will be able to balance the reduction of tax relief though increasing rental prices.
The Rise of the Alterative Asset
The buy-to-let market in the UK will always be a popular choice for investors however, a lack of availability has led to the rise of investment in alternative assets.
A recent report from CBRE has shown that an increasing number of investors have moved their attention towards the alternative assets this year.
A survey conducted by the company in has shown that 27% of respondents plan to purchase student property, 17% are actively interested in the healthcare sector, 17% are looking into the leisure/entertainment market and 15% are searching for opportunities in retirement living.
The UK was hailed as the most attractive location in Europe for property investment by 31% of respondents.
London-based property consultancy, Experience Invest, has seen a rise in the number of investors looking towards alternative property assets.
“Over the last few years we have witnessed a rise in investor interest in the UK’s student property. What’s more, we have had a steady influx of enquiries about off plan developments which offer investors a discounted entry onto the UK’s property ladder,” Dale Anderson, Project Manager commented.
“We expect demand for off plan assets to continue to rise, as more and more investors look for alternative assets to expand their property portfolio,” Anderson added.
Experience Invest provides investors with high yielding UK property investments in some of the best performing alternative markets such as the student property, buy-to-let, commercial and care home markets.