The latest data from lender Halifax indicates that average house prices in the UK have risen by 5.1% over the last 12 months. The average UK house price is now at £219,949 and Halifax expect that prices will keep on rising due to the continuing growing demand and undersupply issues.
OBR house price predictions
In the recent budget, Chancellor Philip Hammond highlighted the new OBR house price predictions which forecast that UK house prices will increase by 4% over the course of 2017 and will consecutively rise by this percentage over the next couple of years. By 2021, the OBR expect house prices to rise by 6% which means that a house bought today for £200,000 could be worth over £250,000 by the end of 2021.
With regards to lettings, the latest monthly report from RICS (Royal Institute of Chartered Surveyors) has indicated that the demand for tenancies has grown for the third consecutive month with 15% more agents reporting an increase in rental enquiries. With fewer rental properties on the market and demand on the increase, RICS fully expect rents to increase.
Over the next five years, rents are expected to rise by 4.4% which means that by 2022, average monthly rents in the UK will hit over £1,000 for the first time.
Length of tenancy is also on the rise. The English Housing Survey has reported that the average tenancy in the PRS sector is just over 4 years. Over 60% of tenants have been in their property for more than 3 years and there is a general mood in the market that tenants are looking for longer tenancies. In fact, the RLA (Residential Landlord Association) have reported that 40% of tenants would like to rent a property for at least 10 years. All this spells good news for buy-to-let investors looking for stable tenants and regular incomes.
ExpatsIn light of the Brexit vote and the fall in the value of sterling, expat investors have also been showing significant interest in UK property. Some mortgage lenders have seen applications more than double from overseas property investors, many of which are UK expats, since the vote to leave the EU.