The UK still has a serious shortage of housing caused by a number of social and demographic factors. Unlike other European countries, our population is expanding significantly and it is predicted to reach 70 millions by 2020 compared to 63.7 millions today. More people living in the UK means that the demand for housing will carry on increasing therefore driving up the price of property for the foreseeable future. According to the Office of National Statistics there will be an annual shortfall of housing in the UK of over 100,000 properties each year for the next decade. This could mean a 1 million housing shortfall by 2025 if current trends continue.
Demand for UK housing is outstripping supply, with UK housing listings now at an all-time low. With an average of 43 properties per estate agency, unparalleled demand is maintaining high and growing house prices. As a result, first-time buyers and a half of 18-34-year-olds no longer see buying a property as a viable next move and have accepted renting as the only realistic option for the foreseeable future while real estate prices continue to grow. With organisations such as the Royal Institute of Chartered Surveyors calling upon the government to encourage building and investment, the government has now pledged to build one million new homes by 2020.
A number of factors have combined to push up rental demand including an increase in immigration, more people living alone and rising house prices stopping first time buyer onto the ladder. This is excellent news for landlords who are finding that their Buy to Let properties are being let extremely quickly while their rental income keeps increasing.
Interest rates have been at an all time low for 6 years making borrowing increasingly cheaper. With mortgage payments currently at their lowest, and ever increasing monthly rent, landlords are enjoying significantly higher rental income making it an ideal time to invest in the property market in the UK.
In September 2016, former Chancellor of the Exchequer, George Osborne took up the role of chair of the Northern Powerhouse Partnership. The body aims to bring together businesses and local politicians to commission research, share ideas and lobby Whitehall to press ahead with devolution. Major initiatives are already underway including the High Speed 2 rail line, regeneration schemes and science and innovation projects such as the National Graphene Institute, Square Kilometre Array and National Biologics Industrial Innovation Centre. The result is job creation and economic growth in the northern region beyond London, providing a timely opportunity for investors to take advantage of emerging economic conditions.
High Speed 2 (HS2) is a planned high-speed railway in the UK linking London, Birmingham, the East Midlands, Leeds and Manchester. The project forecasted to cost £55.7 billion will be the 2nd high-speed rail line in Britain after High Speed 1 (HSl) connecting London to the Channel Tunnel. The line of the HS2 will be built in a “Y” shape, with London positioned at the bottom of the ”Y”, Birmingham at the centre, Leeds at the top right and Manchester at the top left. Work on the first phase is set to begin in 2018, with plans to reach Birmingham by 2026 and Crewe on the left leg of the “Y” by 2027. The whole network is expected to be completed by 2033. The whole network will cut down travel times immensely between some of the most sought-after British cities. On top of that, HS2 will bring new business opportunities and continued growth to the cities along its route. Forecasts expect local economies to experience a boost of over £3 million per region, making the HS2 a project that will help all of the country grow and develop further.