With spring approaching, there is currently no sign that annual house price growth will to return to single digits in the UK. Indeed, most industry analysts agree that it may take more than a few more months for prices to plateau as supply builds and demand is fulfilled.
Nationwide reported annual growth of 12.6% in February, up from 11.2% in January, proving that the disparity is still sufficiently large to keep property prices high. Surprisingly, gains were most significant in Wales, where prices rose 13% in the year to December, to £204,835.
The lowest annual growth was recorded in London, where prices increased 5.5% in the same time to £521,146. Despite the lower rate of growth, the capital city remains by and far the most expensive region in the U.K. in which to buy a home.
Although the number of new prospective buyers was 50% higher than the five-year average in February, Knight Frank’s data revealed that sales instructions were down by 5%.
The stamp duty holiday clearly played its own part in creating the current imbalance, with supply noticeably tailing off from July 2021, when the full holiday tax relief came to an end.
Should you wait until Spring to invest in property?
Since then, property portfolio re-stocking by the sector has been largely erratic. This has not been helped by the fact owners have held back due to a shortage of purchase options- they themselves have been ‘grid-locked’ in the buying chain.
The property sector is hoping that the arrival of spring will accelerate the process. However, meanwhile, there still remains a large amount of pent-up demand in the system. This has been boosted by the relaxation of Covid restrictions in the UK and the ongoing re-evaluation of how and where people live.
The savvy investor of course knows that spring could mark the return of more recognisable and predictable conditions in the UK housing market and many are snapping up the bargains before prices reach a level where the ROI will not be worth it.
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