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Insight & Opinion

[Infographic] What will 2016 hold for UK property investment?

Author: Gemma

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Last year the UK’s real estate sector experienced a lot of changes. In this new infographic, Experience Invest looks at what 2016 will hold for UK property investment.

Overall 2015 was a triumphant year for UK property investment. Property prices increased at a record pace, rents increased across the board and the amount of money invested in student property reached an all-time high.

The general election was a pivotal point in the year for the market. Many buyers, who were worried about the Labour party’s proposed mansion tax, held off investing until the results were confirmed.

The announcement of the Conservative majority helped bring stability to the UK’s market. After the results were in, London house prices increased by 17%.

Budget bombshell

There were two big shocks in 2015 which rocked the UK’s buy-to-let sector.

The Chancellor George Osborne announced that from April 2017, the amount of tax relief landlords can claim will be reduced from 45% to 20%.

Later on in the year, the Chancellor unveiled new plans to shake up the UK’s buy-to-let sector. As of April 2016, a new 3% stamp duty charge will be added to the existing structure in place. This higher rate of tax will be applied to buy-to-let properties and second homes. It is not yet fully understood exactly how the legislation will be applied however this will be published in March.

The government aims to promote homeownership in the UK with the new changes.

2016 and beyond…

It is yet to be seen exactly how new changes will affect the UK’s property investment market however, with the need for housing unlikely to dwindle any time soon, the demand for investment in the sector will remain strong.

Renters may feel the brunt of the government’s decision to cap landlords’ tax relief. It is thought that landlords will adjust rental prices to counterbalance any losses they will make from the changes to legislation.

New research from SpareRoom shows that 38% of landlords plan to increase rents to cover their outgoings.

It is unclear whether the Bank of England will increase interest rates from their record low in 2016. Low interest rates should continue to attract buyers to the market and, with rises anticipated to be low, many experts do not believe it will have too much of an effect on the market.

Did you enjoy Experience Invest’s 2016 UK property investment infographic? Share your thoughts below…

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