Home buying patterns in the UK have shifted on account of the nation’s recovery from the pandemic as well as an the emergence of millennials as a prominent house buyer group in key locations
In the midst of the pandemic, and ensuing lockdowns, there was a norm established for individuals and families to seek to move out of city centres in search of green and office space for their homes. Second steppers, who could best afford the move did so, whilst international investment was muted on account of travel restrictions. As offices opened up cultural spaces are now accessible and normalcy has returned – this is now changing the trends in the UK housing market.
From an investor perspective, UK real estate owners with second homes (such as buy-to-let and foreign direct investment) have seen the value of their assets increase from £610 billion in 2010 to £1 trillion in 2019, according to The English Housing Survey. Moreover, approximately 35 per cent of British second home owners use these assets for long term investment and reliable income streams.
As a result of this long-standing performance, from a millennial (age 18 – 34) perspective, a study by property platform, Moveable, suggests 25 per cent want real estate to use for passive income. Furthermore, 50 per cent are looking to enter the property market before starting a family and 40 per cent want a home to refurbish or develop in the next year.
This comes as annual house price growth reached 9 per cent in prime regional London markets, reaching as high as 10.8 per cent in prime suburbs around the capital given the connectivity of commuter zones. In addition, Halifax research indicates that home ownership costs were 13 per cent cheaper than renting last year, equal to over £27,600 over the course of a 25-year mortgage.
The average UK house price hit a new record high of £282,753 in March, according to mortgage lender Halifax. House prices grew by 1.4% month-on-month in March – or £3,860 on average in cash terms – the biggest rise in six months, the ninth consecutive month of increases and following a 0.8% rise in February.