UK House Prices are Still Falling.
According to Zoopla’s house price index, UK house prices are still falling but the rate has slowed compared to the recent history. The rate of house price falls is currently -0.8% year-on-year. This year-on-year fall means that the UK’s average house price has now fallen to £264,400, a fall of £2,100 compared to this time last year. ‘This pretty mild rate of house price falls has been helped somewhat by the usual new year market spike’ says Stuart Marshall of Liquid Expat Mortgages. ‘It’s typical that in the new year, there’s a spike in property sales as people begin the new year with renewed focus and a drive to purchase property. This is evident in the slowed house price fall of -0.8% when compared to the previous three months, which have seen year on year falls of -1.1%, -1.4%, and -1.2%. With property prices still falling and very little competition from domestic buyers, it remains a great time for UK expat and foreign national investors to get a slice of the lucrative UK investment property market.’
Looking More Closely.
The regional picture is also incredibly interesting, with Northern regions continuing to hold strong on house prices in testament to their current desirability and strength in the housing market. This has meant that the North West, North East, Yorkshire and the Humber, Northern Ireland, and Scotland have all bucked the trend of house price falls by either remaining the same or growing. Looking at a more fine-grained picture, the best performing cities are Belfast (+4%), Glasgow (+1.5%), Edinburgh (+1.3%), Liverpool (+0.9%), Leeds (+0.6%), Newcastle (+0.5%), Sheffield (+0.4%), Manchester (+0.4%), and Cardiff (+0.1%). This is testament to the strong performance of both Northern regions and cities in recent history.
This regional variation in house price falls can be instructive to UK expat and foreign national investors about where is best to invest in property. While these properties are holding their value or appreciating, they are still much more affordable than comparable properties in many southern regions of the UK and incredibly mortgage-friendly, making them a very good prospect on which to use a specialist UK expat or foreign national mortgage product. Their resilience also speaks to their current popularity for consumers too, promising good returns for UK expat and foreign national investors.
Why are Prices Falling?
Higher mortgage rates have made it much more difficult for domestic buyers to purchase properties, which has in turn reduced the demand for property. The slower demand has meant that properties have stayed on the market for longer and there has been a greater supply of properties available, which has also contributed to price falls. ‘Because of these factors, it’s definitely a buyer’s market at the moment’ says Stuart Marshall. ‘This has meant that it’s a great time for UK expat and foreign national investors to get a lucrative UK buy-to-let property. And property portal, Zoopla, predict that prices will continue to fall in 2024. This isn’t surprising as we’re likely in a period of reset after three years of strong price growth. Even with the consistent price falls from 2023, UK housing is still between 10% and 15% overvalued at the end of 2023. It’s likely that this will continue through 2024, as prices drift lower as a result of less activity in the market. Activity is unlikely to massively pick up either, as lenders continue to stress test new borrowers at high rates, which means there will still be great opportunities available for UK expat and foreign national investors, especially those utilising specialist mortgage products.’
What Happens Next?
The situation is likely to remain the same for the foreseeable future. Mortgage rates are unlikely to change that much, and even if they do come down slightly, lender stress tests are still likely to make it very difficult to purchase property for domestic buyers and, in particular, first-time buyers. This leaves a lot of opportunity and very little competition for UK expat and foreign national investors to find the right property.
‘It’s probably one of the best times for UK expat and foreign national investors to buy a UK investment property’ says Stuart Marshall. ‘As we noted, mortgage rates are unlikely to drop much more, but competition is low from domestic buyers so house prices will still be falling a little further. According to Zoopla, the availability of homes is also up by 20%, meaning more choice for UK expat and foreign national investors. Our advice for UK expat and foreign national investors at the moment has been that if there’s a property that really appeals and ticks the boxes, move fast! It’s a good time to drive a hard bargain and get a better deal. This is especially true for investors utilising expert UK expat and foreign national mortgage brokers. There are a lot of good UK expat and foreign national mortgage products available at the moment, with some favourable rates – especially for those buying with lower LTVs. UK expat and foreign national investors are able to utilise their higher incomes and deposit amounts to negotiate a better price on properties, while UK expat and foreign national mortgage products help to spread the cost of the investment.’
Liquid Expat Mortgages
Suite 4b, Link 665 Business Centre,
Todd Hall Rd,
Phone: 0161 871 1216
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