The constant refrain of the weakening UK economy, recession and house prices in the news lately, has been like a bad case of deja vu. All that doomsaying is getting tedious—especially when dramatic headlines send readers into an unnecessary panic.
As investors, It is essential to sift wheat from chaff: to retain what’s expedient for opportune and profitable change, and discard what makes little difference to our dollars and sense (pun intended)! How? Buckle up and read on to learn more.
Higher interest rates may have softened market sentiment and impacted price growth but, this has not stopped rental rates from increasing, particularly in the UK’s growing cities where there is a severe lack of available rental supply.
Recent data puts Manchester in the UK’s top spot for rental price growth, at a whopping 20% increase, outperforming London again.
With inflation gripping the global housing market, interest rates have skyrocketed causing many to wonder if the property market would crash, but signs are indicating a buyers market. In Singapore, where home ownership is high (90%), 55% now plan to delay plans to buy a home whilst 24% are considering dropping their plans to buy a home at all. In America, there is a buyer-seller standoff because prices have become too unaffordable for the former. In Australia, where availability of rental vacancies are now at its lowest since before the pandemic, interest rates are being passed in full to home loan customers. Globally, higher living and borrowing costs are slowing demand and pushing down house prices.
As house prices adjust and the market becomes more favourable for buyers, a common impulse for investors is to hold back from investing because of fear. Understandably, the media’s constant coverage of high interest rates has further amplified fear. However, it is very possible to grow wealth in the current climate, just as in times of crisis. As we enter into the buyers market phase, here’s how and where to invest to grow wealth.
Perhaps the biggest influence on the global housing market thus far has been the hike in interest rates. By mid-June 2022, at least 45 countries had raised interest rates in a desperate bid to contain the most rapid inflation in decades. Some countries like the US, UK and Australia had raised bank rates no less than 7 times by the end of 2022, whilst Singapore had tightened its monetary policy 5 times.
Unlike 2021, which was a year of exceptional house price growth, 2022 was a year of 2 halves with growth marking the first half, and a slowdown blighting the latter half. As the spectre of interest rate hikes looms over 2023, how are housing markets impacted and what are the mistakes that investors should avoid?
[vc_row][vc_column][vc_column_text]The tussle between Manchester and Birmingham for the position of the UK’s second city is a longstanding one. What Manchester offers in Science & Technology achievements, Nobel prize winners (25 and counting!), the Oasis and as the UK’s Most Liveable City; Birmingham counters with the likes of its incredible diversity, JRR Tolkien, Duran Duran and perhaps the highest number of Michelin-starred restaurants outside the capital! Both cities have a young population, are home to the prestigious Russell Group Universities, and are growing dynamically as a result of massive regeneration in the last decade. But how do Birmingham and Manchester measure up in investment terms?
[vc_row][vc_column][vc_column_text]Last Thursday, 22 Sept, the Bank of England (BoE) raised interest rates by 0.5 percentage points, to its current 2.25%, to control high inflation. The BoE joins several other central banks around the world who have also increased their bank rates.
Yet, with the possibility of recession looming ahead, UK property investors remain bullish about the UK property market. Sounds counter-intuitive, no? Read on to learn the the Top 3 Reasons why UK property remain a sound investment in current times.
[vc_row][vc_column][vc_column_text]Investors with their fingers on the pulse understand that the best cities to invest in are built upon regeneration and urban renewal.
Europe’s fastest-growing tech city and most popular property investment destination—Manchester—has been nothing short of spectacular. This Northern city has built a reputation for creating more than its fair share of world firsts, including the first IVF baby, first split atom and graphene isolation, and where the first stored programme computer was built.
Manchester’s growth from a market town of some 10,000 people, and its rise from industrial decline to the heaving, bustling metropolis that it is today, was founded on the back of regeneration and urban renewal. Some of Europe’s most successful regenerations took place here.
[vc_row][vc_column][vc_column_text]How is the UK property market performing thus far? With pandemic fears and lockdown restrictions a thing of the past, the UK now faces rising inflation and new political upheaval with Boris Johnson stepping down as Prime Minister. How will this affect UK property investors? Read on to learn more.
[vc_row][vc_column][vc_column_text]It’s a little known fact, especially among foreigners, that Manchester, and not London, is the UK’s Most Liveable City—a common oversight, as London’s fame as a global financial and cultural hub often overshadows the Northern city.
Still, Manchester has been the UK’s rising star in liveability, affordability and overall quality of life for a decade now, overtaking London, Birmingham and Liverpool to claim the UK’s top spot in The Economist’s ‘Global Liveability Index since 2011.
Read on to know what to look out for when investing in property for steady capital growth.
CSI PROP looks at the price growth performance of the residential property market in selected key countries from 1995 – 2020. How has property investment stacked up compared to other investments like the stock market?