Investing in UK property can be lucrative if approached strategically.
In 2024, the market is anticipated to witness unique trends across different investment strategies, especially in Buy-to-Let (BTL), Houses of Multiple Occupation (HMOs), and Serviced Accommodation sectors. Below, we outline key insights and top strategies for investors looking to capitalise on these market segments in 2024.
Buy-to-Let (BTL):
The North West region is forecasted to be a high-performing area for BTL investments. This region, along with London industrial and retail warehouses, is expected to experience annual investment returns between 8.5% and 9.2% from 2024-2028.
After the turbulence in the mortgage markets and regulatory changes in 2023, a stabilisation is anticipated in 2024, making buy-to-let investments more appealing.
Houses of Multiple Occupation (HMOs):
Given the high demand and lower supply in the UK housing market, HMOs continue to be an attractive option for investors, particularly in areas with a young population, like Birmingham and Derby.
Investors need to be up to speed with the changing regulatory environment that governs HMOs, including licensing requirements and standards.
Serviced Accommodation (SA)
We expect the SA market to continue to thrive as domestic tourism remains strong. This is evidenced by the resilience of the holiday park market in recent years.
Cumbria and Pembrokeshire have seen over 50% increase in interest. Yorkshire, Norfolk, Suffolk, and Dorset have experienced more modest rises, indicating that these locations have either maintained or enhanced their appeal as holiday destinations. Ayreshire experienced a 90% year-on-year increase in interest, and Kent saw an 81% increase.
Cornwall remains a popular destination, with a 57% rise in search demand year-on-year, translating to nearly 79,000 additional searches compared to the previous year. Despite facing challenges like higher costs and difficulty in finding availability during peak summer months, Cornwall still dominates in terms of search volume for holiday parks, particularly in June 2023.
SAs can be a way to diversify property portfolios, especially for investors looking to tap into short-term rental markets in high-demand areas.
General Trends:
Technological Adoption
The increasing use of technology in property management and rentals, like digital platforms for managing BTL properties or marketing SAs, is likely to continue.
Investors should carefully consider these trends while aligning their strategies with their investment goals, risk tolerance, and the UK property market environment. Regularly updated market research and expert advice are crucial in navigating these trends effectively.
To learn more about how the team here at Sourced can support your property investment journey in 2024 – you can download our latest prospectus here
