… but prices continue to rise!
The latest Hometrack UK Cities Index has shown that the annual rate of house price growth in twenty of the UK’s largest cities slowed to 8.2% in August 2016. In July, growth had been at 9.5%. The average house price in the UK, as a result, was £239,400. Prices are still rising, but just not as fast at the moment.
Why Is the UK Housing Market Slowing?
People are finding it increasingly difficult to buy a home whilst the UK housing market continues to inflate quicker than earnings, particularly in the south, where many potential buyers are finding themselves completely priced out of the market. This fact is what is probably most of the reason for the slowdown in house price growth over the last couple of months.
There’s also the factor of the shock outcome of the EU Referendum, which gave lots of potential buyers reason to pause for thought. And, of course, is also in part due to the recent interest rate cut by the Bank of England.
So What’s the Good News?
Nonetheless, these disruptions to the UK housing market don’t seem to have had a lasting effect, and we’re seeing the market begin to settle down again now. This is good news that suggests an underlying strength within the residential UK housing market, which will hopefully see us optimistically into the long term.
What Does this Mean for Investors in the UK Property Market?
There is still a massive imbalance between supply and demand of properties on the market. This goes some way to explaining the continuing growth of the rental sector, and why property investors are increasingly leaning towards buy-to-let investment, including HMOs, as their investment of choice.
If residential property as an investment is still on your radar, however, then it’s still a good time to buy. There are signs that house prices are going to continue to rise, and getting in whilst there’s a chance you can afford to could pay in the longer term.
For investors in the property market wishing to take the sensible route of diversifying their portfolio, record low interest rates make the potentially higher returns of equity crowdfunding and P2P lending for Real Estate an appetising option.
So choose your weapon… all signs point to a continually promising future for the UK property market.