2020 was a year dominated by COVID-19. But, propped up by various government incentives, the UK housing market remained resilient and resistant to the tumultuous effects of the pandemic. With Zoopla predicting that house prices will grow again by 5% through the early part of the year, there is one question that many potential investors are asking – ‘Where should I invest in 2021?’
The Rental Landscape in 2021.
The change in what features renters look for in a property has been a hot topic of discussion at the Liquid Expat Mortgages office. Over the course of 2020, it’s been clear that a new range of consumer preferences have emerged in the housing market. One aspect of the ‘new normal’ to which we’re all adjusting is the way that people live and work – namely, people are spending far more time in their homes. Accordingly, both home buyers and renters are looking for more spacious properties. Increasingly, people are looking for properties with a spare room from which they can work while at home. Another change is a growing desire for outside space like gardens. This change in preference is also prevalent in the rental sector. Savills report that 79% of rental agents are reporting an increased demand for workspace at home.
The desire for more spacious homes and outdoor space correlates with another change in preference – an increased willingness to look further afield for property. Without a need to commute to work (usually in a city centre), consumers are more willing to live further away from their workplaces and benefit from the increased space and improved lifestyle that suburban homes have to offer. This is supported by International Estate Agent, Hampton’s, finding that demand for renting in a city is down 23% across the UK.
Where to Invest as a UK Expat in 2021.
We’ll get the thoughts of Stuart Marshall, CEO of Liquid Expat Mortgages, about the continued success of UK property and potential investment locations in the UK for 2021. ‘The level of enquiries from UK expats and foreign nationals looking to buy in the UK has been increasing steadily. Enquiry value was higher in the first seven months of 2019 than for the whole of 2018. That has continued to increase throughout 2020 and, so far, has spilled over into 2021. Many overseas residents consider UK property good value resulting in continued high levels of applications from UK expats and foreign nationals.’
‘Over the years, we’ve seen Liverpool grow as an investment location in both popularity and profitability’ says Stuart Marshall. ‘More and more, Liverpool is a go-to destination, attracting many businesses and maintaining a thriving student population. This growing reputation as a destination city has contributed to a 181% rise in Liverpool’s population [as reported by the Office of National Statistics]’. The rise in population obviously means that more and more people in Liverpool need housing and this extreme rise in demand has contributed to rising rents and high rental yields – which are both key features for potential investors.
‘Despite its growing reputation as an investment hotspot and a fantastic place to live, Liverpool is still very much a growing city’ continues Stuart Marshall. ‘This means there’s plenty of opportunity to pick up a reasonably priced property with a great possibility of high capital growth (Savills, one of the world’s leading property agents, predicts a 24% rise in house prices in the North West by 2024 – an amount much higher than the UK average of just over 15%). And, with an average yield of 5% and an average rental price growth of 2.65%, Liverpool is a great choice for investment in 2021 and beyond.’
‘Manchester is the perfect storm for a UK expat investor or foreign national looking to purchase on a buy-to-let basis’ says Stuart Marshall. ‘The city has a vibrant student scene and is home to world renowned universities like the University of Manchester, which boasts the highest number of students at any university in the country. Students are also staying in Manchester after they graduate with growing infrastructure and job opportunities there to support this graduate population. For example, one of the key growth areas within Manchester, Media City in Salford, is consistently attracting young professionals. This steady influx of skilled workers is helping to maintain high average rents and growing house prices in the city and its nearby areas. The average house price in Manchester is £193,681 and average rental income is £1,141, making Manchester a lucrative investment location (especially when you consider that house prices rose at twice the rate as flats in 2020).’
‘In the same way that Liverpool’s increasing population has led to a huge surge in rental demand, Cardiff is starting to see the same transformation’ advises Stuart. ‘The population is substantial (at 1.1 million), but predicted to grow by a further 20% by 2035. As a result of this latent demand, there are many developments currently under construction, offering excellent investment opportunities for buy-to-let investors looking towards the future. Cardiff has the UK’s largest waterfront development, with a projected £500 million coastal development which is sure to contribute to demand and a further increase in prices. Even without Cardiff’s projected growth, it remains an attractive investment prospect with average rental yields of 6% and a 240% rise in house prices over the last 20 years.’
Disclaimer: Please note that Liquid Expat Mortgages has no direct control over the timescales relating to either the processing of mortgage applications or mortgage offers being issued by lenders. Liquid Expat Mortgages has no control of the legal process and CANNOT accept any responsibility nor liability should your application not be processed prior to current Stamp Duty Land Tax rules expiring on 31st March 2021 or any extension of that date.
Liquid Expat Mortgages
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