Property Investment – Where Will Investors Be Targeting in 2019

Property growth in 2018 was a mixed bag, with London seeing a general fall in demand, contrastingly areas such as Manchester and Canterbury saw surprisingly high growth.

Forecasts would suggest that the North and Midland regions of England are likely to see the strongest, continued growth going into 2019.

Sparked by recent data, higher rental yields could be obtained in these regions. When taking into account the uncertainty of the economy going into 2019, it is predicted that investors will play it safe and continue to invest in these relatively secure regions over the next five years.

The report suggests that we have moved into the “second part” of the current housing cycle, whereby markets in the North and Midlands are outperforming those of London and the South.

The result of this is that we will expect to see increased emphasis on investors targeting rental returns from their residential developments. This is also expected to be paired with a shift from corporate to private investment. Capital growth has fallen from 40% to 30%, with rental income growing to 70%.

Within the buy-to-let sector, we are expecting to see a rise in larger institutions entering the scene. Buy-to-let mortgages grew by just over 1% to the year ending September 2018. Contrastingly the number of build-to-rent units completed or in progress rose by a staggering 30%.

In recent years, individual landlords made up the majority of investors in the rental sector. However, purpose-built properties with a view to rent the properties has been a rapidly increasing strategy, and an important part of the way the property market in 2019 is set to be shifting towards. This is largely due to the rise in younger people having less money and importantly a different attitude to purchasing property. Renting is increasingly becoming a lifestyle choice, allowing them more flexibility in life.

Over 50% of adults under the age of 40 are reported to be renting privately owned property by 2025 – with one third of those predicted to never buy a home. This offers property investors ample opportunity to target this ever-growing market.