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Low house prices could mean investment opportunities for savvy landlords

Tuesday 17 October 2017

Research from the BBC has found that house prices in more than half of English and Welsh neighbourhoods are still lower in real terms than they were 10 years ago. 

In 58% of wards, properties are selling for less today - even when factoring in inflation - than they were in 2007.
While prices in the South East and East of England may have risen, elsewhere in the country they are significantly lower. Average house prices in Wales, Yorkshire and the Humber, the North East and the North West have declined by more than 10% since 2007.

That regional divide is reflected in landlord’s investment strategies - with more southern landlords looking to buy properties up North. 

Simple Landlords Insurance’s Head of Operations, Alex Huntley, explains: “Most of our landlords invest close to home - typically within a few miles of where they live. Increasingly though, we are seeing people invest further afield, and looking for properties in growth areas or University towns - places like Hull, Newcastle, Liverpool, Leeds and Manchester. 

“While for your average homeowner the stagnation of house prices might not be great news, for property investors and landlords it means there’s opportunity out there to bag a bargain.”

According to the BBC, the average price of a house in the UK is now £226,000.

They speak to housing market analyst Neal Hudson, who says the income squeeze in many parts of the country after the financial crisis has constrained house price growth: "Some people are trapped in their current homes as they have seen no increase in their income and cannot afford to borrow more. 

“Potential first-time buyers in the private rented sector do not have a sufficient or stable income to buy their first home. The idea of committing to a 25 to 30-year mortgage when they are not sure what they are going to earn in the next year is difficult."

Alex continues: “We’re also seeing even young professional renting for longer - and again that’s got to be good news for landlords. I suppose it’s the silver lining to the housing crisis. The bigger the pool of tenants - and the better the quality of tenants - the better news for landlords and for the rental market as a whole.”
Find out more about the BBC’s findings here. 

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We want to add value to landlords with interesting news and views! Our Hub includes information and opinions on the housing market from a variety of expert sources – please just be aware it doesn’t always reflect Simple’s opinion, or the products and services we provide.