Connollys - Magazine - Page 3
purchases. Lower inflation also contributes to a more stable
economic environment, fostering growth in the property sector.
IMPACT OF INTERNATIONAL TRADE POLICIES
The recent decision by mortgage lenders, including Barclays, to
reduce rates below 4% marks the start of a potential price war,
which is positive news for the UK property market. This move is a
direct response to global economic shifts caused by Donald
Trump’s tariffs, creating increased competition among lenders. As
more institutions follow suit, mortgage rates could continue to fall,
making homeownership more accessible and attractive,
particularly for first-time buyers. Lower mortgage rates increase
affordability, allowing buyers to secure better deals and boosting
demand for both homes and investment properties, further
stabilising and stimulating the UK housing market.
RENTAL MARKET RESILIENCE
The rental market in the UK has demonstrated resilience, with
sustained demand for rental properties, especially in high-demand
cities and commuter zones. Although the cost of living has risen,
renting remains a viable option for many.
Rising rents in key areas, particularly in London and the South East,
have resulted in higher yields for landlords. This has made the rental
market more attractive for property investors, particularly those who
own properties in well-located, high-demand areas. Additionally, with
the UK labour market remaining relatively strong, many people
continue to move for work opportunities, further supporting the
ongoing demand for rental properties.
LIMITED HOUSING SUPPLY
Another factor contributing to the strength of the UK property
market is the persistent shortage of housing. According to various
reports, the UK requires hundreds of thousands of new homes each
year to meet demand, but supply continues to fall short. This
imbalance between supply and demand is one of the primary
factors driving house price stability and, in some areas, even price
growth. With planning restrictions, limited land availability, and
construction delays restricting the number of new homes being
built, properties in high-demand areas are less likely to experience
significant drops in value.
For investors, the limited supply of housing means that properties
tend to maintain their value over time, making them a relatively
secure long-term investment. In areas with strong job growth and
good infrastructure, the potential for returns through capital
appreciation remains high.
LONG-TERM INVESTMENT STABILITY
The UK property market continues to be regarded as a stable
long-term investment, with property values typically increasing over
time. While short-term fluctuations can occur, especially in
response to macroeconomic factors like interest rate changes and
inflation, the long-term trend in property prices has been one of
growth. The Bank of England’s gradual approach to lowering
interest rates, aimed at controlling inflation, also signals a longerterm view of economic stability, which helps reassure investors in
the property market.
In times of economic uncertainty, many investors turn to property
as a “safe haven” asset. This is particularly true for international
investors, who regard UK property as a reliable store of value due to
the country’s stable legal framework, transparent property rights,
and the global reputation of cities like London as financial hubs.
This makes the UK market relatively resilient in the face of
economic turbulence.
LIFESTYLE MAGAZINE
3
