Should you Invest in the UK Property Sector?

There was a point in 2020 when many informed voices were speaking despairingly about the state of the UK housing market. The market went on to defy many of the grimmest predictions, and enjoy a fairly respectable year – thanks in part to measures put in place by the Chancellor to stimulate demand, including a stamp duty holiday.

So, is this going to persist into 2021? How should investors behave, and what factors are going to affect the state of things?

Recent Expert Predictions

Saunderson House is home to many of the most reputable experts in wealth management London has to offer. They cite the instruction to work from home as depressing the demand for office space, at least in the short term. They also acknowledge that the picture is grimmer than it was twelve months earlier. However, they also state that: “property remains an income-generating asset class, as the majority of the return for an investor comes from rental payments by an asset’s tenants.”

Why Should you Invest?

There are many reasons that, despite the recession, now is a good time to invest. The lack of supply is driving demand up, meaning that homes are selling faster and prices are rising. According to Savills’ five-year forecast, the price of the average UK home is set to grow by 15% by 2024. Interest rates are at a historic low of 0.1%, and SDLT is reduced until March.

What about Brexit?

It wasn’t so long ago that Brexit was being discussed constantly – but it’s taken something of a backseat compared to the impact of the virus. With the EU and the UK having agreed an eleventh-hour trade agreement, it’s unlikely that the impact of the departure will even register, when compared to the impact of the pandemic. Should Brexit cause a noticeable uptick in unemployment, we should see the growth in house prices slow down – but this is difficult to foresee.

Investment Tips

If you’re intent on investing in property in the UK, then you’ll need to first do your homework. You’re taking a financial risk, and perhaps a significant one – and it’s your responsibility to ensure that it’s fully researched.

Make sure that you’ve accounted for every fee, including those of solicitors, estate agents, surveyors, and the land registry. From March, Stamp Duty may be a concern one again – so make sure that you’ve factored that in when forming your investment strategy.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.