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The Prime Minister by all accounts has her hands full at the moment with the ongoing Brexit negotiations, which have reached a bit of an impasse with the latest round of talks being called a stalemate.

So, I suppose it would be the decent think to do and cut her some slack when it comes to the UK property markets, and the promise she made of our version of the American Dream the ‘British Dream’ after all successive governments have been making the same broken promises for over twenty years now, if not longer.

The PM has made a start on her plan to try and put the UK property market back on its feet when she pledged another £2bn to fund social housing, but let’s be honest this sounds like the familiar story of the little boy with his finger stock in the dam.

At the Conservative party conference recently the Prime Minister made a key pledge.

“I will take personal charge of the Government’s response, and make the British Dream a reality by reigniting home ownership in Britain once again,” she said, her voice holding up to deliver those crucial words.

Sounds like great news for UK property investments and the UK housing market, but how does she plan to make this all happen.

The housing crisis is one of the biggest economic problems in decades so an extra £10bn for the Help to Buy scheme and £2bn for new social housing is a good place to start.

Back at the start of the millennium the average UK property sold for £84,619, according to official statistics.

Now the average UK property sells for a staggering £226,185, an increase of 167pc.

If we look at what the average weekly wage has done during that time the figures paint a very dismal picture, rising from £307 to £505, a paltry increase of only 64pc.

With that amount of wage increase how is anybody that is not currently invested in UK property expected to do so, it is the impossible task that haunts so many UK citizens.

This meteoric rise in UK property prices has also given rise to huge rental increase which is starting to severely limiting economic mobility, hurting companies and the wider UK economy.

“The housing market issues create classic economic imbalances, which hold back the growth rate of an economy,” says economist James McCann at Aberdeen Standard Investments. “It puts constraints on the ability of our most productive cities to develop and to grow. The normal response is that an area which is highly productive grows strongly. It requires more labor and more people, wages will be higher in the area so people should move there. But if housing market imbalances are so acute and it is very expensive to move, then you don’t get that organic growth and movement between regions.”

 

Crucial, then, is the low level of construction at a time of population growth – both through migration and longer lifespans – and rising wages.

Since the 1970’s housing development by the government have been consistently falling from 300,000 homes per year, to its lowest point, just 119,150 in 2008-09. Since then the rate has risen to 174,520 in 2015-16.

Colin Lewis, the chief executive of house-builder Avant Homes, says the system of local authorities giving permission for new development is often a barrier to building. “Getting planning permission is still a tortuous and random process,”

“A big challenge to all housebuilders is the part of the planning agenda which means local authorities have to allocate land to housing development, which many have not done.”

The Government estimates that they need to build around 260,000 UK properties per year to meet growth in demand.

So the extra £2bn for social housing the Prime Minister has promised could help to build 25,000 such homes that are sorely needed.

What we can glean from all of this information is that there is absolutely zero chance of the government being able to tackle the housing crisis alone they will need all the help they can get from the private sector and UK property investors.

We have UK property developers embracing Build-to-Rent, but many small to medium UK property developers are struggling access the development finance they so badly need, this is an area that the government can do more.

Collective Investment Schemes, property funds and crowdfunding is all on the rise as more and more UK property investors turn to this type of investment strategy to help them achieve the returns they are looking for.

All of this investment vehicles are having a tremendously positive effect on all sectors of the UK property investment sectors, commercial property investment is up, investment in student housing is at record levels, and investment into collective investment schemes funding property development is seeing huge increases on a day to day basis.

Buy to let property investors are going through a rough patch at the moment as we have covered in several previous articles. The changes in tax, stamp duty and mortgage lending criteria all having a negative impact on the profits that these property investors are making.

Foreign property investors are showing that there is still global confidence in the UK property market as we have seen properties in London sold for record highs in 2017, whilst other regions in the UK are attracting foreign investment at higher levels than ever before, so overall UK property investments are still a sound investment choice for those investors looking for great returns with the minimalist of risks.

DevDosh Ltd Summary:

The UK property market sailed through choppy waters when the Brexit vote first happened and have recovered to show that UK property investment is still going strong. London has experienced a slight decrease in property prices in September but they are still in the realm of positive capital growth. Regions like Manchester, Birmingham and the South-East are all showing signs of growth in their respective property markets, so the picture as a whole for the UK property market looks pretty good.

If the government really wants to make a real impact on the UK housing crisis they must find a way to work with all sectors of the UK property investment markets so it is beneficial to all parties, and they can help to continue increased investment in UK property.

Easier access to planning permission and developer finance for development companies, more tax benefits for the individual property investor whether it be buy-to-let, build-to-rent, a property fund or crowdfunding platform will help to make more worthwhile for more people to take the plunge into UK property investment.

The PM told the European Union that the ball is in their court regarding the Brexit talks, well Theresa if your reading this, the ball is in your court when it comes to the UK housing crisis and the UK property investment market, so what are you going to do.

For property investors looking for a super-safe UK based property investment product that is asset-backed and offering a fixed annual income of 10% call DevDosh Ltd today on  tel: +44 (0) 20 7193 7797 or visit us at www.devdosh.com for more details.