There are still many property investment opportunities available in the UK in 2019, according to property investment company One Touch. This is despite warnings from Mark Carney, Governor of the Bank of England, that a no-deal Brexit could send shockwaves through the property market, as it could reduce house prices by 35 per cent.
When comparing the state of the UK property market, there were effects from Brexit in London at the close of 2018. London properties with a value of £2 million were those that were most affected in the area, due to the financial commitment being so much higher for these types of properties, according to recent research from One Touch.
However, when looking at the property market in the rest of the UK, average house prices have continued to see a rise due to the strength of regional markets in the last quarter of 2018, according to One Touch.
Although the value of the pound is falling relative to other currencies, this doesn’t necessarily mean bad news for the UK property market, as this also has the positive effect of boosting investment interest from overseas buyers. This overseas investment potential can help to boost demand and stabilise UK house prices, according to One Touch.
On the industrial side of the UK property market, the threat of a no-deal Brexit has also had a positive impact on commercial property prices. As certain UK-based companies including Topps Tiles, Nestle and Rolls Royce have taken steps to reduce disruption to their supply chains, by stockpiling goods across the country, the demand for industrial property remains strong.
In particular, industrial multi-let portfolios and distribution units continued to achieve positive results in the final quarter of 2018, as volumes of these types of industrial property made up 13 per cent of all UK commercial investment activity, which translated to £3.6 billion according to recent data from commercial property firm JLL.
The areas which have the largest number of industrial warehouses in the UK are the Midlands, due to being conveniently located for easy distribution of goods across the country. At present, Amazon has 13 UK warehouses dotted between Daventry, Coalville and Milton Keynes and the region is set to receive more commercial investment activity in 2019, according to One Touch.
A new commercial development is due to be available to commercial investors in Q4 2019 at Panattoni Park, offering 1.6 million square feet of industrial and warehouse units near Northampton. Other industrial units are planned to be developed in the green belt area surrounding Coventry airport, which will also include a community park and foot and cycle paths, according to One Touch.
As commercial property developments increase in the Midlands, this will, in turn, have a positive effect on regional residential property prices, as businesses expand and seek new employees to sustain their growth. Northampton, Coventry and Leicester are all tipped to become new residential property investment hotspots according to the recent data released by Hometrack’s Cities House price index.
Since the year 2000, property prices in Leicester have increased by over 250 per cent and this area is predicted to become a new property investment hotspot in the UK in 2019. Due to its ideal location in the Midlands and just over an hour away from London, as well as the promised future £3 billion regeneration investment, Leicester will be one to watch for UK residential and commercial landlords and investors.
Warrington is another one to watch for UK property investors, located in between Liverpool and Manchester. This town has one of Amazon’s warehouses and Omega has also recently announced plans to construct speculative warehousing here, which will be 758,000 square feet. This will create new jobs and in turn boost the local residential property market in the area, according to One Touch.
Coventry witnessed a high increase in house price growth in 2018 and since the year 2000 house prices have risen over 250 per cent. There are excellent rental yields to be made in this city, which is around 5.40 per cent excluding tax and only five other UK areas come before it, according to recent data from Private Finance, reported by One Touch.
Colchester in Essex also witnessed an increase in the average house price in 2018 and the town benefits from fantastic transport links to the capital, good schools and local amenities. Colchester ranked highly for capital growth, rental price growth and rental yields, according to the recent buy-to-let research from LendInvest.
Edinburgh is also set to become a property hotspot in 2019, according to the city having recorded one of the fastest growing economies in the UK last year, which has boosted the Scottish capital’s desirability for employers and workers. Property prices in Edinburgh also rose by 7.70 per cent in 2018 according to the recent data from Hometrack.
Leytonstone in the London Borough of Waltham Forest, in the North East of the city, saw a rise in almost a third of London landlords citing it as being a property investment hotspot in 2019. Sitting on the central line in zones 3-4, it was an Olympic borough and received some regeneration investment, according to One Touch.
Leytonstone has recently seen a rise of younger people moving to the area, due to them being able to receive more space for their money and house prices have risen by 83 per cent in the past five years. Property prices in the area are relatively affordable for London, as the average property price was recorded at £462,000 according to recent research from Rightmove.
In summation, for those looking for good property investment hotspots in 2019, the Midlands, Colchester and Edinburgh all saw a boost to house prices in 2018. Although London house prices were the most affected by the Brexit uncertainty, there are still some investment opportunities to be made in 2019.