There is a strong consensus that the outlook is positive for investing in the UK, despite ongoing uncertainty surrounding Brexit negotiations.
CEO of Market Financial Solutions, Paresh Raja, said there is still uncertainty surrounding the UK’s leave from the EU. This comes as a natural concern with the scheduled exit date of March 2019 fast approaching.
However, Mr Raja goes on to say that “ambiguity has not dampened the spirits of prospective homebuyers and property investors”. This is due to real estate proving itself to be a safe and secure asset, offering stable and long-term investments.
Savills report that house prices have continued to rise in the UK, whereby prices rose 3% in the 12 months to June 2018. This is met by a general sense of positivity by landlords, particularly HMO landlords (HMO property meaning), with more than half saying they feel positive about the state of the current market.
This positive outlook is further compounded when analysing the house asking price report from Rightmove. The report indicates that asking prices will continue to grow, regardless of future uncertainty, with prices up 1.6% in London compared to the same period last year. Average asking prices are also up 3.1% over the same period.
CEO of Octopus Property, Mario Berti, agrees with this. “Despite wider market uncertainty, the returns available from owning, investing in and developing the right type of real estate continue to be favourable versus other asset classes, something that we expect to continue moving forward”.
Mr Berti goes on to provide his reasoning for this, citing the supply and demand imbalance whereby supply for property is higher than houses available, the continued health of the economy and the availability of cheap credit.
In terms of supply and demand, this has been an increasing influencer on the rise in house prices. Halifax report that due to low unemployment, low mortgage rates and a shortage of properties for sale, house prices have continued to grow at a surprisingly high rate, this being a 3.7% rise in August compared to the same month in 2017.
James Bloom, managing director of short-term lending at Masthaven echoes this positive outlook, saying that the market remains upbeat, despite the UK´s housing slowdown, with many investors still choosing to hold fire until the market conditions become clearer post Brexit.
Mr Bloom goes on to state “the short-term sector has remained buoyant and continues to perform well,” Bloom said. “We are seeing more new entrants coming into the market which is increasing competition and providing customers with an even wider choice of products.” A result of this is even more product innovation, as lenders compete in the ever-growing popular market.
When looking at foreign direct investment, this too shows no signs of slowing down. Asian investors in particular are targeting areas such as Manchester and Liverpool due to the economic rise created by new employment.
It therefore appears that investing in commercial property is a safe bet. Historically we have seen commercial property as a secure, viable investment opportunity, and it would appear this trend is set to continue through the uncertainty of Brexit.