{"id":6094073,"date":"2023-05-23T08:50:26","date_gmt":"2023-05-23T07:50:26","guid":{"rendered":"https:\/\/www.buyassociationgroup.com\/en-gb\/?p=6094073"},"modified":"2023-05-19T16:08:00","modified_gmt":"2023-05-19T15:08:00","slug":"yields-house-price","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-gb\/2023\/05\/23\/yields-house-price\/","title":{"rendered":"Focus on yields as “massive” house price growth slows"},"content":{"rendered":"

Time and again, the UK housing market has displayed unexpected resilience during turbulent times, so even as house price growth slows, investors are earning an income through their yields.\u00a0<\/strong><\/p>\n

Recent comments from David Miles, an Office for Budget Responsibility<\/a> (OBR) economist, dominated the headlines last week with what could be seen as his gloomy outlook for the UK property sector.<\/p>\n

It is no secret that the fast-paced acceleration in house prices we experienced across much of the market in the wake of Covid was going to be short-lived. While many profited from soaring house price rises, it was never seen as a sustainable pattern, and the market is now seeing a correction.<\/p>\n

In a speech at the Economic Statistics Centre of Excellence’s conference, reported by Bloomberg, Miles said: \u201cThose forces driving [house prices] up are going to be much weaker, I suspect, in the next 40 years than they have been in the past 40 years.<\/p>\n

\u201cIf anything, this unusual age of massive rises of house prices may be nearing an end.\u201d<\/p>\n

The market has certainly been rocked recently by rising inflation and interest rates, coupled with the cost of living crisis putting pressure on people’s budgets. However, with inflation expected to fall drastically by the end of this year, and mortgage rates already coming down<\/a> again, the market is once again showing its resilience.<\/p>\n

Focus on yields?<\/h4>\n

From a property investment<\/a> perspective, investing in something that is likely to see its value increase over time is an obvious plus point. This is why investing in off-plan new-builds<\/a> is particularly popular in recent years, as you tend to benefit from price rises during the construction process.<\/p>\n

However, particularly as people’s mortgage costs are likely to increase, many investors are placing a heavier focus on yields. Your annual rental yields<\/a> can make up a good portion of the income you get from your property, allowing you to hold onto it for a longer period which will eventually lead to capital gains.<\/p>\n

Some of the best yields in the country can be found in Liverpool<\/a>, which regularly ranks as a top city to invest in. Manchester is also competitive, along with many parts of Birmingham as the rental market<\/a> there has boomed over recent years.<\/p>\n

While London has seen house prices shoot up historically, it has become one of the slowest markets in the country in that respect. And with some of the highest property prices to boot, it often means rental yields are lower than in other places.<\/p>\n

Don’t “play” the market<\/h4>\n

Flipping property<\/a> is an investment strategy that has become less appealing in the current climate. This often involves buying something cheap, doing it up and selling it quickly for a higher price.<\/p>\n

But with uncertainty over house prices, along with the increased costs of labour and materials, it can be harder to make money this way. This is why adopting a long-term strategy, along with investing in a property with excellent yields, can be a preferable route right now.<\/p>\n

John Stepek sums this up in his recent Bloomsberg article: “As long as you are as confident as you can be that you would like to live in the home for a prolonged period of time, and that you aren\u2019t going to struggle to pay the mortgage, then houses are ultimately \u201cswings and roundabouts\u201d over a lifetime.<\/p>\n

“If the value of your home drops, it might bother you, but remember that the home you buy next will also see its price drop. (And the same for price rises \u2014 they\u2019re great until you realise that the next house up is now even further out of your reach than it was).<\/p>\n

“So don\u2019t try to \u201cplay\u201d the housing market. It’s a waste of time. But equally, don\u2019t be surprised if prices start to head lower again later in the year after apparently flattening over the past couple of months.”<\/p>\n

At BuyAssociation, we specialise in connecting investors with some of the most exciting property investment opportunities in high-yielding locations across the UK, with a focus on off-plan new-builds. Get in touch<\/a> for more information.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Time and again, the UK housing market has displayed unexpected resilience during turbulent times, so even as house price growth slows, investors are earning an income through their yields.\u00a0 Recent comments from David Miles, an Office for Budget Responsibility (OBR) economist, dominated the headlines last week with what could be seen as his gloomy outlook… Read more »<\/a><\/p>\n","protected":false},"author":1069,"featured_media":6027765,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[6],"tags":[103,462],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6094073"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/1069"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=6094073"}],"version-history":[{"count":5,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6094073\/revisions"}],"predecessor-version":[{"id":6094079,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6094073\/revisions\/6094079"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/6027765"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=6094073"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=6094073"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=6094073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}