Identifying opportunities across the country
The question, of course, is what corners of the market offer the best investment potential. From asset type to location, there are plenty of important factors to consider.
As ever, when viewed by region, the projected growth in the market varies significantly in different parts of the country.
In the North East, for instance, Savills data shows prices are expected to fall by 1.5 per cent in 2024, followed by a return to growth (+4.5 per cent) in 2025, and even strong growth in both 2026 (5.5 per cent) and 2027 (+7 per cent).
So, investing in a property in that region in 2024 could potentially yield investors a compounded capital return of up to 21.4 per cent by 2028.
On the BTL front, investors looking to boost their portfolios this year should look to the areas that promise the most growth in rental yields.
In 2023, for example, Ceredigion in Wales experienced a 3.8 per cent rise in yields to become the best area for rental yields in the country at 10.8 per cent – almost 1 per cent higher than Gateshead in second place.
Across the board, the Royal Institution of Chartered Surveyors is projecting that average rents will grow by 5 per cent across the UK over the next five years. However, some pockets of the market will outperform the rest of the market.
Knight Frank data reveals prices in prime outer London, for instance, are set to rise by 8 per cent in 2024, so there are some areas that could provide landlords with a speedier return on investment than others in the months ahead in particular.
As with recent years, BTL investors will be weighing up their own costs against rental returns to ensure they can secure healthy yields.
Financial options will proliferate, but true value comes from the overall service
As I have already touched on, lenders are seemingly readying themselves for the influx in demand that the continued recovery of the economy (and housing market) will likely bring. This will mean competitive rates and new products.
Indeed, as the market evolves, we will likely see increased competition among lenders, putting borrowers in a strong position. Brokers will subsequently be faced with myriad choices when sourcing loans for their clients.
However, I think it is crucial to recognise that the value of a financial product lies not just in its rates, but also in the flexibility and overall service provided by its lender – after all, each investment scenario is unique.
Therefore, finding a lender that understands the unique needs of every individual they lend to will make a significant difference as the market recovers throughout the year.
