Buyers Looking to Purchase in Cheaper Areas in UK Property Market
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Cheaper Areas Becoming More Popular in the UK Housing Market
While the UK property market has enjoyed a confident start to 2024, the fact remains that many buy-to-let investors, homebuyers and tenants are looking to reduce their household costs. This is thanks to the current cost-of-living crisis, which brought about high inflation and a raised Bank of England Base Rate.
Recent research echoes this sentiment, showing that a significant number of people have seen a decline in their disposable income and are looking to potentially buy or rent properties in less expensive areas.
Today, we look at that research in more detail and look at potential alternatives to more costly areas for buy-to-let property investment.
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Why Are People Looking to Buy Property in Cheaper Areas?
Recent research by the Pepper Money Specialist Lending Study revealed that 28% of individuals have contemplated relocating to a different area to alleviate housing expenses amid the cost-of-living challenges.
Additionally, 19% of respondents have entertained the idea of downsizing due to the ongoing financial strain.
The study indicates that 68% of participants have experienced a reduction in their disposable income over the past year, attributing it to the cost-of-living crisis, with 31% reporting a significant decrease. The most significant financial impacts on households have been observed in the form of escalating food bills (92%), followed by increased energy bills (86%) and higher travel costs (38%).
Paul Adams, Sales Director at Pepper Money, said: “Faced with such a significant ongoing squeeze on their finances, millions of households are looking for ways to cut costs.
“Our study found the desire to do this is so significant for such a large proportion of people that 28% of all respondents say they have considered moving out of their area to somewhere cheaper, whilst 19% have thought about downsizing to reduce their housing costs.
“Whether customers are looking to move, downsize, or reduce their borrowing costs, brokers have a huge opportunity to help their customers to best manage the current economic environment and continue working towards the goals they want to achieve in their lives.”
Find Out More: Expand your property investment knowledge further with our guides on the safest property investments and the best retirement places in the UK.
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Where Can Buyers Find Better-Value Properties?
If you are looking to purchase property as a buy-to-let investor, you’ll want to ensure you choose an area that offers reasonable house prices and attractive rental yields and helps tenants save money on their bills.
For instance, buy-to-let investors have noted that city centre apartments are becoming a more lucrative investment avenue due to more people returning to office work. These properties would satisfy people’s desires to downsize and help them save on their energy bills, particularly if they move into a new-build apartment. For that reason, investors may want to look to cities with good economies and job opportunities, such as Liverpool, Manchester or even Glasgow.
Not only are these places good for work, they are highly desirable places to live and have below-average property prices. For example, properties in Liverpool cost around £177,000 on average, according to the HM Land Registry UK House Price Index. In comparison, the national average property price in the UK is around £290,000.
In addition, Liverpool is also subject to substantial regeneration in central areas like the Baltic Triangle, the Knowledge Quarter and the upcoming Northern Quarter. This is an essential factor to consider when buying a UK rental property. Savills points to Liverpool and the North West region as an area on the rise, forecasting returns of 9.2% in the North West buy-to-let region.
Discover More: For more buy-to-let regional advice, check out some of our handy area guides, including:
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