Based on research by the Ministry of Housing, Communities, and Local Government, immigration has caused prices to rise by 21% in the UK. According to available sources, 239,000 people moved to Britain in 2021, and the total share of migrants represents nearly 15% of the total population.
The increased interest in the region and the next wave of migrants in one way or another impact the real estate market of the country, which has a rather limited level of realty offers. In addition, global economic transformations and fluctuations do not pass without a trace. How will all this influence real estate?
So, what consequences of migration processes will the property market face?
Growth of utility tariffs
Britain is an island nation with limited property supply, and demographic growth, inflation, and high demand for housing become a consequence of ever-higher market prices. Simon Zutshi, a property investor, says that the first thing property owners will feel is the high cost of utility services. A shortage of energy carriers, an increase in the cost of energy, and with them utility bills will double. This will drive up rental costs in the UK.
Inflation and living standards
The prospect of inflation, the rise in prices for goods and services, and as a result, reduced solvency will be another tangible consequence for the market, says Karen Noye, mortgage expert at Quilter. According to her, we should forget about low mortgage rates, instead, those who took out a mortgage with a fixed rate are lucky.
High demand for housing
According to state research, the annual space deficit is 100,000 flats. The activity of developers is decreasing, and the cost of construction and materials continues to rise. Consequently, the number of offers on the real estate market fell by almost 10%, and demand increased by 16% compared to last year.
Investments in real estate
According to experts, real estate investors will benefit from inflation and rising prices. Prices for buying and rental prices for square meters will continue to rise, and owners of residential, commercial, and industrial real estate will receive an additional profit.
According to entrepreneur and investor Dmitry Leus, now is the best time to start investing spare funds in real estate, since this market will continue to grow despite the economic and social crises which are already expected this year. Low-cost housing, worth up to £350,000 in a few years, can yield up to 25% of the profit, both from renting and selling.
He also advises investors who don’t have large savings to combine with partners and finance the construction of small residential buildings with several flats, or to join state programs for the construction of social housing, where there is a high guarantee of return on investment payback.