Property prices in the UK are at an all time high with prices up 4% in March, with the highest levels of price growth in Manchester at 6.5% and Liverpool at 6.3%.
The level of property available for sale has 30% less in April this year compared to the same period in 2017-2019 as the high volume of property sales is eroding the supply, making it even more difficult for first-time buyers to get a foot on the property ladder.
The number of renters exiting the rental market by purchasing their first home has dropped as many are delaying large financial commitments during the pandemic and others have seen their savings deplete as a result of decreasing income during the past year.
Renting a property is the only option for a lot of people with an average deposit of £57,000 for first-time buyers, which has resulted in rental prices increases of up to 19.3% in the UK over the past 5-years (RightMove).
Affordability is not the only reason for the increase in households living in private rented accommodation in the UK as the proportion of UK renters has doubled in 20 years according to the English Housing Survey.
Home ownership has for a long time been important in the UK, with renting being more commonplace across Europe, especially countries such as Germany where 48.1% of households renting their home according to Statista, in contrast to 20% (ONS).
Renting is now seen as a positive choice as opposed to a compromise on buying their own home as the survey revealed that 84% of renters were satisfied with their accommodation and 72% were satisfied with their landlords.
Renters are given flexibility by renting, if they aren’t happy with the area, their job requires them to move around, or, break up of a relationship, children adding to the family, they aren’t committed for more than 12-months.
The cost of moving in nowhere near as high as if they had to sell their property and buy a new one, with costs including Stamp Duty Land Tax, legal fees for their sale, legal fees for their purchase, agent sales fees, removal costs, repairs to the new property and the list goes on. According to Barclays, the average cost to move home in the UK is £8,885.
Working from home has become the new normal, providing flexibility of locations where you can live if you do not have to travel in to an office every day. Renting allows tenants to move more easily and not be tied down to one particular area, so renting and working from home are a great pairing.
Renters typically rent for 1-2 years, with 30% of tenants planning to rent for this period whilst they familiarise themselves with a new area before committing to buying.
21% of renters plan to always rent, with 15% wanting to rent as it provides them with the freedom to move without the large expense.
Due to the COVID pandemic and uncertainty over jobs, many renters are delaying their decision to move on and remaining in rented accommodation. As the way that we use our homes has also changed, many are choosing to find a new property as their lease comes to an end and find accommodation better suited to their new way of living.
Supply of properties to rent is not keeping up with demand, with a 5% decrease in available properties in Q1 2021 versus Q1 2020, providing an opportunity for individual buy-to-let investors as more renters remain in the sector.
Significant growth in cities including Manchester, Birmingham, Liverpool and Leeds is forecast by industry experts JLL:
Property prices in the North West are also forecast to increase by a massive 28.8% by 2025; therefore, Manchester and Liverpool are a primary focus for buy-to-let property investors:
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