Property is a hot topic in the UK. Open a newspaper and you’ll find it popping up in the politics, business, investment, and money advice sections. And then of course there are the special property pull-outs every week aimed at those wanting to get on the property ladder. From demands for more affordable housing, to landmark developments in the capital, the UK property market is rarely not on the front page.
United Kingdom Landscape.
And it’s not difficult to see why. The price of houses has been a source of anguish for politicians since the late 1970s, when house prices started skyrocketing on the back of a good economy. With the average house price being just £10,388 at the beginning of 1975, it had more than tripled only a decade later to £33,200. This trend has continued nearly uninterrupted since, save for two incidents. Financial turmoil in the mid 90s and late 2000s saw average house prices take a dip. However, the general trend of increasing house prices has continued unabated. Even when controlled for inflation, house prices in real terms have increased by a whopping £100,000 since the mid-70s. Currently, economists predict that house prices will increase by a massive 30% in the next five years alone.
Traditional United Kingdom Town
It’s not just residential property prices that are making waves in the UK. Despite the negative impact of the 2007 financial crises, the fledgling economic recovery has seen a massive increase in the demand for UK office space. Interest is coming from both local and overseas investors. The end of 2013 and beginning of 2014 was a period marked by record numbers of foreign investors being attracted into the UK commercial property market. In 2013 alone, two of London’s biggest ever deals took place, both of them valued at over £1.7 billion. The first deal involved the purchase of 50% of the Broadgate commercial estate in the City of London by GIC Private Limited, the Singapore sovereign wealth fund. The second was the purchase of More London, a mixed use development near Tower Bridge, by the Kuwaiti St Martins Property Group. It has also been revealed that during the first half 2014, Chinese investors were more likely to invest in commercial property in London than anywhere else. By the end of July 2014, Chinese investors alone had channelled £1.35 billion into London commercial property.
United Kingdom Countryside.
London has not been able to keep up with the demand for UK commercial property. As the demand for London office space has increased throughout 2014, that demand has spilled over into the rest of the UK. The South East has been the main benefactor of increasing investment outside of London, netting more than £8 billion in investment since the start of 2013. In the third quarter of 2014, investment in regional commercial property outstripped that invested in London for the first time since 2011. As with the residential market, demand for UK commercial property is set to increase over the coming years. A recovering economy, as well as the emergence of new industries, is fuelling demand for ever-more flexible office and commercial space.
Stonehenge - United Kingdom Landmark.