UK Property Investment Trends: Buy-to-Let Hotspots, Average Time on the Market and Micro-Movements

Luton “continues to hold the top spot” for buy-to-let

According to LendInvest’s most recent* Buy-to-Let Index Report, Luton holds first place in terms of rental growth and capital appreciation. As a university town, Luton’s potential to offer high yields has helped it maintain its competitive advantage.

Read the full report here.

*At the time of writing, (October 2017)

The top ten buy-to-let postcodes in the UK

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The fully mapped rankings can be seen below.

(Embedded from LendInvest)

Rightmove’s House Price Index reports highest September to October rise since 2014

Rightmove reported the highest September to October house price rise since 2014. The price of properties listed for sale are up by 1.1% on average compared to September, approximately equating to +£3,432.

Since recording the trend, Rightmove have witnessed house prices rise in October since 2001. In London, “The average price of newly marketed property has risen by 3.1% (+£18,699) compared to the previous month.”

Average time on the market is reported to be 63 days, though regional variations exist within this figure.

In terms of market differences between regions, the South is currently more “price sensitive,” though areas in the Midlands are witnessing “demand outweigh supply and high asking prices being achieved,” according to Kevin Shaw, national sales director at Leaders Estate Agents.

Market sentiment is in favour of ownership, despite rising house prices, according to Miles Shipside, Rightmove director and housing market analyst. He notes, “Whilst affordability is stretched, it is still countered by the motivation to own a home rather than rent, or the need for extra space to house a growing family.”

Read the full report here.

Micro-trends according to Savills

National averages often mask the intricate details of the UK housing market, which is why taking a closer look at “micro-trends” can shed a more accurate light on localised market sentiment. Savills’ “It’s all in the detail” report outlines 5 micro-trends in the UK residential market which may have been disguised by “broad averages.”

• In 2017, the average length of tenancy stands at 17.7 in prime London. In 2012, it was estimated to be 13.1 months. The increase is reflective of a preference for renting over buying, which appears to contradict Rightmove’s analysis. In fact, Savills’ data suggests that renting is “up from 15% in 2013 to 20% in 2017.”

• The number of super prime properties listed for rent have risen in the past year. The super prime category relates to rentals costing £4k+ per week. The change may be due to stamp duty avoidance, an increase in supply and a rising number of “global entrepreneurs who are living more transient lifestyles.”

• Corporate budgets have experienced an increase of 13% year on year. While mid-ranking hires were popular last year, corporations tend to be relocating “higher-level staff to steer decision making through the Brexit process” in London. For the residential housing market, this could explain an increasing need for homes near good schools.

• Currently, a property’s standard seems to trump its location, as tenants tend to favour high-end finishes over esteemed postcodes.

• Between 2012 and 2017, around a fifth of renters who decided to leave the capital moved to surrounding commuter zones, and Savills suggest this is unlikely to change.

Read the full report here.

By Jenna Kamal

Capital at risk

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