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Property prices in the UK are now nearly 20% higher than their pre-pandemic levels, according to recently unveiled data from House Buyer Bureau, suggesting that a further -19.3% cooling is required for UK property prices to revert to their pre-pandemic norms.The analysis delves into the existing average property price in the UK and contrasts it with the figure recorded at the beginning of the COVID-19 outbreak. This analysis seeks to determine the extent of the necessary decline in current values to achieve a state of 'normalcy' that predates the pandemic-induced surge in market prices. The analysis also goes on to draw comparisons with the market's performance during the 2008 global financial crisis.
Investment opportunities
Decrease of 19.3% just to Return to Pre=Pandemic Levels
Although discussions about a moderating housing market and declining prices, the data reveals that even after enduring months of economic and market turmoil, the current average property price of £287,546 would need to undergo a significant -19.3% decrease to return to its pre-pandemic level of £231,940 as of January 2020.
Resilient UK Property Market
This suggests that while some speculators have concerns regarding the market's resilience, the relatively minor fluctuations in prices remain insignificant when viewed against the substantial growth witnessed during the pandemic, much of which can be attributed to the subsequent Stamp Duty holiday.
Property price reductions witnessed during the recession brought about by the 2008/09 global financial crisis were nowhere near the 19.3% level.
During the onset of that recession in April 2008 (Q2 2008), the average UK property price was £183,148. By the conclusion of the technical recession (Q2 2009), a mere 14 months later, prices had fallen by -12.9% to reach an average of £159,561.
So, in order for current property prices to revert to pre-pandemic norms, the decline would need to be markedly more severe than that experienced during the global financial crisis, a period of economic turmoil widely recognised as more severe than the present circumstances.
Chris Hodgkinson, the Managing Director of House Buyer Bureau, observed, "Numerous self-proclaimed property experts have been hasty in predicting the downfall of the UK property market, offering alarmist insinuations of an impending crash. However, this hasn't been the case, and property prices would have to plummet by nearly 20% just to return to their pre-pandemic benchmark, let alone crash the market."
Invest for Cash Flow with Current Mortgage Interest Rates
The team at Regency Invest have been working hard with investors who are looking to ensure that their hard earned savings are protected from the high-levels of inflation. Our recommendation is to invest into properties with a great opportunity for strong levels of cash-flow in areas where high-growth is also expected.
conclusion
Henley Capital have a carefully selected portfolio of properties offering both, with NET rental yields up to and over 10%. Speak with one our property experts today to find out how we can help with your next property investment.
