The interests of property investors switch from London to the UK regions

The unprecedented growth in property prices in London is a mixed reaction in the press and among experts. However, most experts agree that this rapid growth of the property market in London will have a positive impact on regional markets.

Moreover, it is believed that the construction industry of London, will become the locomotive, capable to lead the UK economy out of the crisis.

Indeed, London shows strong growth of home prices, but growth in other economic indicators such as growth of major economic indexes and the level of employment, which exceeded its pre-crisis highs.

And the increase in employment leads to an increase in the solvency of people, which in turn contributes to rising rents and the interest of investors “Buy-to-let”.

The volume of existing investment allows construction companies to make strategic decisions to develop new sites for the construction not only in London but in other UK regions.

The main problem of the existing real estate market in the regions of the UK – the lack of new housing, due to the fact that construction companies had the means to build for more than 4 years.

Rents in the regions are still below pre-crisis levels.

In General, the rate of growth in rental prices in the regions have not yet reached a level that investors are interested in regional markets, “Buy-to-let”.

According to the forecast of the influential Agency, the real estate market of regions will need two to three years, so supply and demand have reached equilibrium.

If we analyze the previous cycles of the property market, it can be seen that the recovery of regional markets has always lagged behind London’s. Most likely, history will repeat itself. However, due to the fact that the lack of real estate is very noticeable, and the demand for rental continues to grow, is expected to have a fairly significant rent growth before a market reaches equilibrium.

And while many foreign investors are still investing in London, part of the investment capital have focused on regions, noting in the regional real estate greater potential. First and foremost is, of course, student towns and cities with high employment in high-tech sectors, pharmaceuticals, oil industry, insurance and financial sector.

® Maxim Savitsky 29.11.2013

UK Real Estate

House in England, Swindon £ 200000

House in England . Three floors of 180 sqm £ 550000