UK property markets remain strong.
2016 will be remembered as a year of shock results, markedly the year that saw the US presidential election won by political outsider, businessman and TV personality Donald Trump, as well as the UK’s controversial decision to leave the European Union.
For property investors, the referendum result was initially met with uncertainty - as little was known regarding the impact the decision would have on the UK property market. However, the market has demonstrated resilience, with new data from the Royal Institution of Chartered Surveyors reporting that enquiries into UK property are once again at pre-Brexit levels.
The result has also increased overseas interest, as the fall in the pound’s value provides a perfect opportunity for foreign investment into the UK.
While the initial ambiguity following the Brexit announcement was to be expected, the fundamentals which have long made British property an attractive investment have remained constant.
The desire to own property is ingrained in British society, and this, combined with the severe housing shortage has driven property values up for generations. The price increases have also driven demand for rental accommodation among those priced out of the buyer’s market – and have also improved rental potential. It is these fundamentals that continue to underpin the strength of Britain’s property market, even in the face of uncertainty.
With new changes to tax rules being introduced in April, traditional buy-to-let property has become somewhat less attractive to many, which has driven the specialist property market with some force.
According to Knight Frank, a whopping £14.3bn is predicted to be invested in specialist real estate assets in 2016.
Growing momentum has been seen in the hotel sector, which has been driven by increasing tourism numbers in the UK. The first nine months of 2016 saw £3.1bn of investment in UK hotels, with this figure predicted to continue growing as hotel demand increases.
Healthcare investments in the UK have also been largely unaffected by the political decisions of 2016. With the market being driven by an ageing population and poor-quality existing stock, this asset class is performing well as the need for private healthcare investment increases.
The student housing sector now offers a comparatively mature alternative sector, with £5.10bn invested into the sector in 2015 (Knight Frank). As the country maintains its reputation for academic excellent and record student numbers in the 2016/17 academic year, as well as severe undersupply of suitable accommodation, student accommodation is forecast to be one of the top UK asset classes of 2017.
As 2016 draws to a close, we predict specialist UK property investments will be a lucrative and shrewd investment into 2017 and beyond.