However, the UK also has a substantial commercial property market
With global stock markets in turmoil, many investors are turning to property as a less volatile investment option.
For practical purposes, the question is not whether property is still able to produce good returns, it is which sectors of the property market produce the best returns. Therefore, investors could Buy Residential property UK as it may offer potential good returns.
When people talk about the UK property market, they often mean the UK’s residential property market. In fact, investors often specifically mean the UK’s residential buy-to-let property market. This is understandable as it is such a large sector.
It is, however, important to note that the UK also has a substantial commercial property market. Both sectors are underpinned by strong fundamentals.
It’s common knowledge that the UK has a massive shortage of high-quality residential property. Population growth is one reason for this. There are, however, many others.
Most of this hinges on the fact that much of the UK’s housing stock reflects bygone lifestyles and long-surpassed building standards.
There will probably always be a desire for genuine period properties and other buildings with character. A lot of the UK’s housing stock is, however, simply older properties in need of some degree of improvement. It is likely to be quite some time before this is addressed. Even when it is, lifestyle renters will almost certainly ensure continued demand.
Investors should be prepared for the government to continue to tighten regulation in the residential buy-to-let market. This means that there will probably be a greater need for administration. On the plus side, it also means that rogue landlords are more likely to be shaken out of the market, thus improving conditions for everyone.
Purpose-built student accommodation continues to be a major feature of the commercial-property investment landscape. At present, there’s no sign of this market becoming oversaturated. If anything, further growth is needed.
Investors looking for a similar alternative may, however, prefer to look at residential care homes.
City hotels could be due to make a significant comeback. This is essentially due to local authorities in cities becoming far stricter about short-term rentals. Holiday lets in rural areas, by contrast, are still forging ahead. This may change if the flight from the cities continues. If, so, however, investors have an obvious (and potentially profitable) exit strategy.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.