Many challenges were raised last year. Although the UK has entered another blockade, the real estate market remains resilient and has proven to be one of the industries not affected by evolving economic and political decisions.
Here are some reasons for optimism about real estate in the coming year:
On December 24, the United Kingdom and the European Union reached a Brexit trade agreement, sanctions the country’s higher degree of political direction and economic certainty. Since the deal has been concluded, many people believe that Brexit is unlikely to affect the real estate market in the short term, nor will it affect the market as originally expected. In addition to the good news surrounding the trade agreement, the launch of the Covid-19 vaccine may affect the UK housing market and build confidence in the industry in the coming year. So far, the distribution has been very successful, and 1.3 million people in the UK are currently vaccinated. With a firm commitment to restoring normalcy in the near future, the positive outlook has truly strengthened the confidence of the industry, and this confidence is a key factor driving real estate demand.
The popular stamp duty holiday is a key factor driving the success of the real estate market in 2020. As the deadline approaches, people have resolved concerns about a short-term market slowdown. However, as the country enters the third blockade, calls for an extension of the stamp duty period are increasing. Expansion will likely maintain market activity and demand and provide further savings for home buyers and investors. In Rightmove’s latest house price index, forecasts indicate that regardless of Brexit, Covid-19 or the stamp duty deadline on March 31, house prices will rise by 4% this year. All in all, this strongly indicates that demand for real estate will remain high, and it provides a deep understanding of how home buyers continue to prioritize their living needs due to the challenges facing the UK economy and job market.
First Time Investors in 2021
Although market confidence is still high, this is a good opportunity for first-time investors to start their portfolio. In order to obtain maximum returns and ensure long-term financial stability, the key goal is to stick to a strategy and consider it for a long time. First, you must consider what you want to achieve through real estate investment, whether it is capital growth, rental income or both. Capital growth refers to the increase in the value of your rental property over time. It is measured by the difference between the market value and its purchase price. The rental yield is obtained by dividing the rental income by the total investment. A good yield is about 5-8%. The rate of return of this number can ensure that investors get a considerable return on investment.
Secondly, site selection is the key, and it remains the most important factor driving the profit of real estate investors. Major features such as transportation hubs, green spaces and urban culture are still convenient facilities for tenants who wish to rent a house. It is expected that Birmingham, Manchester and Liverpool will become the three hot spots for real estate investment in 2021, and will generate the highest rental income and price growth in the next 5 years. The attractiveness and attractiveness of these northern cities has grown significantly, and they are a key player in the process of Britain’s recovery. Third, prepare to review your financial situation. As an investor, whether you are a cash buyer or purchasing mortgages on demand, you need to consider the available budget and the main source of funds. You also need to consider the payment time at the beginning of the investment journey to ensure that the development is completed in the best condition.
Finally, in order to thrive in the real estate market, understanding the industry is essential. At Alesco, we focus on investment opportunities tailored to our clients and continue to provide support to new and existing investors.
If you are interested in investing, please contact our team immediately to learn more about the opportunities available to M: +44 7985 475 966.