23 Apr, 2020

Is UK buy to let property investment dead?

Birmingham property

Millions of investors from around the world have invested in the UK buy to let property market. The proven long-term stability of the market, as well as remarkable future potential, has made buy to let the go-to option for investors.

With the current uncertainty, it is natural to review the sector and ask whether UK buy to let property is dead as an investment option. The answer is that the fundamentals which make it so attractive remain unchanged, and UK property investment remains a strong and profitable option.

The latest Rightmove Rental Tracker shows that annual growth in the UK’s key rental markets, such as the North West and the West Midlands, is doing incredibly well on an annual basis. The North West in particular – centred on the booming Manchester market – is performing far beyond expectations with annual growth of 4.9% recorded by Rightmove. This level of growth is the highest in England and comfortably outstrips that found in London.

With that in mind, the key question becomes whether the current uncertainty has affected this strong growth.

So, has it changed?

The short and long answers to this are both: “no”. Whilst there were some initial and understandable concerns and the lockdown conditions introduced an unseasonal caution into the market, the latest studies and data show that the market is already picking up again – a sure sign of underlying confidence in UK property.

The latest annual Rental Market Report from Zoopla and Hometrack reports that the last fortnight alone has seen a rebound in rental demand of 30% following the initial impact of the COVID-19 situation. Year-on-year rental growth is still up by a large amount, and the increase in demand has been uniform across all regions and tenures.

These figures clearly demonstrate that the fundamentals of the UK rental market – confidence, growing rents and high demand – are still in place, and it looks as if UK buy to let is set up to weather yet another storm, once again proving its long-term viability as an investment class.

Where should I invest in buy to let property?

Similarly, to the above, the places which were most attractive in terms of returns and long-term stability remain the same now as they were before the current uncertainty. Manchester is a perfect example of a city which property investors from around the world should be looking at with great interest.

The city experienced house price growth more than six times higher than London over the last year according to the February 2020 UK Cities House Price Index. What’s more, this does not take into account the ongoing population boom which is due to speed up in the next five years. 5,000 more people will move into the city centre every year until at least 2025 according to the latest State of the City Report from Manchester City Council – and this will push house prices up rapidly in Manchester.

It is clear to see that UK buy to let property investment remains a superb option, and it should form the cornerstone of any varied investment portfolio. If you know where to look for the best deals and highest future growth potential – Manchester – there are impressive returns on offer.

For more information about the Manchester property market, get in touch with our team today >>

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