The number of UK homes being sold to first-time buyers is in a decline according to the latest market report, however this is in spite of an expected increase in the UK housing supple. This has created a unique opportunity for property investors looking to buy for the rental market as more people rent instead of buying.
The number of first-time UK home buyers entering the market fell from 29% in May to 23% in July according to the National Association of Estate Agents July Housing Market Report. This is due to UK house prices continuing to increase and expectations of rising into the future. A flood of UK homes coming on to the market has given some optimism to Real Estate agents who are hoping over the next coming months an increase in more sales completed to first-time UK resident buyers will happen.
However at the moment throughout the UK the average price for a UK home rose £3,000 in value in June, bringing the average total to £277,000 from £274,000 where it stood in May. In London the average price is even higher and stands at £513,000. The government data also shows that in June 2015, on average, first-time buyers were paying 5.1% more than they were just a year before – the UK property market is booming and the the truth of the matter is there simply aren’t enough houses to meet growing demand.
Don’t forget to read: London; Beyond Zone 1
So what does this mean for investors looking to enter the UK property market with the aim of creating alternative revenue streams for themselves? Basically now is the time to buy! With more people turning to rent as an option rather than buying, demand is increasing and is expected to increase into the future. According to an PricewaterhouseCoopers economist report more than half of 20-39 year olds will be renting in the UK by 2025.
Based on the firms analysis around half of 20 to 39-year-olds are already in the private rental sector and the firm says this will become a clear majority – unless there is a reversal in affordability and housing supply trends. Chief PwC economist, John Hawksworth, rounded-off the report by giving a pessimistic view on the renting crisis in the UK and said: “We expect housing supply shortages to persist for at least the next decade and, realistically, expect to see a continuing rise in ‘Generation Rent’ until at least 2025.”
This situation has resulted in a great opportunity for investors although a worrying future for the UK’s younger generations. Time will tell.