Investment in UK property set to expand in 2023 with London satellite towns a key focus

Created: 24 Jan 2023

Investment in UK property is set to expand in 2023, with London satellite towns being a key focus for larger property investors.

Market conditions are ripe for expansive property investment over the course of 2023 as landlords and institutional players with larger real estate portfolios capitalise on falling house prices, rising rents, and stabilising mortgage rates. Investors are snapping up properties in desirable satellite town locations that can command high rental yields, whilst still offering affordability and convenience.

Property prices are forecast to drop by 5-10 per cent in 2023, providing investors with the opportunity to purchase properties at lower costs. As the economy improves, prices are expected to rise 2 per cent in 2024 and 4 per cent in 2026. This capital appreciation will be particularly strong in London and its satellite towns, where low stock levels and low supply of new instructions (down 8 per cent year-on-year) are driving scarcity and record rents.

Experienced investors, with over 5 investment properties, plan to invest further in 2023 according to data from bridging finance broker Finbri which found 50.45 per cent of the over 1,000 property investors polled are looking to further expand their portfolios this year. According to Home.co.uk’s Asking Price Index, the average rental yield in the UK is 4.71 per cent, varying from location to location and going over 5.2 per cent with some opportunities.

Smaller private landlords are facing significant challenges due to recent tax, legislative, and economic changes, leading to a likely increase in sales from smaller investors. This presents an opportunity for larger investors to capitalize on the market.

Furthermore, the median price of a flat remains 15 per cent lower than in 2016, providing room for upward pricing. London property is also offering a significant discount to foreign investors when priced in US dollars, and rental yields are improving rapidly.

“For the best investment opportunities, it is important to look outside of the big cities – for the last four years we have consistently seen that it’s the satellite towns where the best investment buys are available – Bootle, not Liverpool, and Washington, not Sunderland, for example”. Anne-Marie Humphreys Property Forecaster, part of One & Only Pro, a property investment platform that identifies properties with the biggest future gains and highest yields.

https://propertyinvestorpost.com/the-north-dominates-best-investment-areas/

References

Investment in UK property is set to expand in 2023, with London satellite towns being a key focus for larger property investors.

https://propertyinvestorpost.com/the-north-dominates-best-investment-areas/

References