UK property investment on the rise in a rapidly changing market

A record number of property buyers are currently chainless, indicating an increase in UK property investment as well as first-time buyer activity.

Current conditions in the UK housing market – record numbers of buyers competing over low levels of property inventory – mean chain-free purchases are more in demand than ever.

New research from Hamptons shows how this is reflected in transactions seen so far this year, with 61% of sellers accepting an offer from a buyer without a chain rather than a buyer with a property for sale. This represents an increase from an average of 59% in 2021 and 58% before Covid 2019.

Sellers are also often willing to accept a lower price from a chainless buyer, attracted by the prospect of a simpler sale. Hamptons found that, on average, sellers are currently accepting about 2.5% fewer offers from non-chain buyers.

British property investment on the rise

Hamptons notes that the increase in buyers’ ability to buy chain-free is due to a combination of first-time buyers and real estate investors.

Data shows that over the past four months, investors accounted for 14% of buyers, an increase from 12% recorded in 2021. Meanwhile, the number of first-time buyers is at an all-time high, accounting for 26% of all purchases. far this year, compared to 24% in 2021.

The increase in the number of property investment transactions in the UK is offset by a noticeable drop in homeowner sales. Many downsizers in particular sell their home before making a cash purchase. A growing number of movers are temporarily moving into rental homes to break the chain.

These numbers are backed up by recent research, also from Hamptons, showing that rental landlords have been the most active in the market since 2016. In the first three months of the year, 13.9% of properties sold were purchased by buyers. for rent owners.

Overall, owners bought 42,980 homes in Britain in the first quarter of 2022. This equates to £8.5billion worth of property, almost double the pre-Covid figure in the first quarter of 2019.

Rapidly changing market creating competition

Aneisha Beveridge, head of research at Hamptons, said: “The current pace of the market has put buyers with a home for sale at the back of the queue. In a rapidly changing market like today, more than three-quarters of sellers had multiple offers on the table to choose from.

“And since buyers without a channel tend to close faster and sales are less likely to fail, they are quickly becoming the preferred option for sellers.”

However, the picture is relatively varied across the country. The North East and London have both seen declines in the number of off-chain property deals since the start of this year. The report says there are fewer offers on the table to choose from in these areas.

However, in all other regions, there was an overall increase in non-chain real estate purchases. The West Midlands represented the highest levels, which could coincide with the region becoming an increasingly popular hotspot for UK property investment.

Worsening supply problems

While the UK property investment landscape remains healthy with a high level of appetite, Aneisha Beveridge points out that people buying without property for sale could worsen supply shortages.

She notes, “Chains play an important role in the market, helping people move up and down the housing ladder. And it’s the second and third steppers alongside the downsizers who rely on the capital raised from the sale of their home for their next purchase who find this particularly difficult.

“It also exacerbates the lack of inventory as their homes are increasingly bought by first-time buyers and investors who don’t have a property to sell.

“Basically, for every ten tomes sold so far in 2022, only three of those buyers will put a home on the market for sale, creating a chain.”