Despite economic uncertainty, a large proportion of UK property investors are remaining steadfast in their plans to invest in UK property. According to a new report by finance broker Finbri, 50.45% of UK property investors are planning to expand their portfolio in 2023. Out of the 1,000+ respondents, 33.37% were against investing this year, whilst 16.18% were unsure of their plans.
Property can be an avenue to strong long-term returns and a generous rental income stream. Rent prices are climbing rapidly across the country, and despite gloomy price forecasts for 2023, real estate values are set to appreciate over the next five years. This means that, for those with the means to do so, acquiring property remains a lucrative venture.
Current concerns
That’s not to say that the current economic situation isn’t a concern for many. Respondents in Finbri’s report were most worried about the cost of living, which is increasing not just in the UK, but countries around the world. Rising energy bills, construction costs and consumer prices are tightening the belts of investors, leaving them with less capital to reinvest and expand their portfolios.
The report, which was released towards the end of last year, also revealed that over 64% of UK property investors were “concerned” or “strongly concerned” about the BoE base rate rising to 3%. Of course, with the base rate currently set at 4%, this has now become a reality.
For a quarter of investors, rising interest rates would leave them unable to remortgage their buy-to-lets; 25% of respondents also said that they would have to sell their investment properties.
New vs experienced investors
It’s worth noting that 23.07% of investors with less than 5 properties said they would sell up if interest rates were to rise again. However, 67.92% of investors with more than 5 properties are set in their plans to invest in further projects this year. Unsurprisingly, then, more experienced investors are being less impacted by rising rates and are remaining steadfast in their plans to invest.
Stephen Clark, from bridging loan broker, Finbri, said:
This report shows that there’s likely to be a marked difference between the investment strategies of smaller vs. larger property investors in 2023. In essence, the smaller investors look more likely to sell and the larger ones are looking to capitalise on that opportunity.
In light of growing economic uncertainty around the world, some investors are bound to have concerns. But overall, 49.35% of UK property investors believe that now is a good time to invest in the market (42.76% of respondents disagreed whilst 7.89% said they “didn’t know”).
As some investors are forced to sell their properties, more opportunities will enter the market. This is good news for those with the means and intention to expand their portfolios this year.
Cities in the North West are offering some of the best opportunities in the UK right now. Thanks to strong house price growth and soaring demand for rental properties, Manchester has emerged as the best UK city for buy-to-let investments in 2023, based on data from Aldermore Bank’s Buy to Let City Tracker. And only next door, Liverpool is also becoming a popular investment location. Its population is growing rapidly, major regeneration projects are underway, and property prices are on the rise yet remain affordable compared to other major UK cities.
If you’re in a place to capitalise on the UK property market, get in touch to discuss available properties and projects.
Contact us today to discover our available UK properties.
