Five Reasons to Invest in Property in the UK

The past twelve months have been more than a little precarious for the property market, which has led many investors to take a step back from the industry. However, in 2024, with renewed demand, a lack of high-quality properties, and a growing population, there has never been a better time to invest in property in the UK.

Still not sure if now’s the right time to branch out into the UK property market? Read on to discover five reasons why now’s the perfect time to buy a property in the UK. Plus, find the answers to any questions you may have about investing in the UK property market in the FAQ section at the end of the article. 

1. The residential property market is strong

In the last three decades, the UK property market has consistently outperformed other investment options, and this doesn’t look like it’s going to change anytime soon. This resilient market is the result of a combination of factors:

  • A growing population, which fuels the need for housing, increases property prices, and rental values. 

  • A limited housing supply, which puts pressure on property prices and rental values. 

  • A rising demand for rental properties, resulting in higher investor rental yields. 

2. The buy-to-let market worth is rising 

The buy-to-let market is worth over £1 trillion in the UK, and research indicates that renters will outnumber homeowners by 2039. This is driven predominantly by an increase in house prices and the growing popularity of the flexibility of renting over owning a home. 

If you would like to find out more about investing in a buy-to-let property or multiple properties in the UK, check out this “how to build a buy-to-let portfolio guide”, which will tell you everything that you need to know. 

3. Significant investment in infrastructure 

The UK continues to invest in infrastructure such as HS2 and optic fibre broadband, which will continue to add value to areas outside of the capital. According to recent reports, public and private sectors in the UK have spent a combined £55 billion a year on infrastructure in the past decade, and this shows no signs of slowing down. 

By 2024/25, the UK government plans to invest £164 billion in infrastructure, with £700–775 billion planned and projected over the next ten years. 

4. Long-term growth 

The UK property market is historically stable and has proven itself to be a reliable and steady investment option for investors who want to see long-term growth. Its annual growth rate over the last two decades has outpaced inflation, and it appears to be immune to severe fluctuations. 

In terms of potential rental income from buy-to-let properties, you can expect high yields and ongoing demand, especially when you purchase a property in a major city such as Manchester, Bristol, Bath, or London. 

5. Value of the pound 

As an investor who’s looking at different currencies, the pound sterling offers the chance to hold a physical asset within a well-established currency. Compared to other markets, the pound is strong and currently ranks as the fourth most-traded currency in the world. 

It’s important to remember that fluctuations in currency exchange rates can both boost and reduce your investment returns, so make sure you consider this when buying a property in the UK or in any other country. 

FAQS: Investing in UK property market 

What taxes do I have to pay if I buy a residential or commercial property in the UK?

When you buy a property in the UK, you’ll be required to pay the following taxes:

  • Stamp duty land tax 

  • Annual tax on enveloped dwellings (for companies who own properties over £500k)

  • Capital gains tax 

  • Council tax 

  • Rental income tax 

It’s worth knowing that the UK tax code does grant certain tax exemptions for specific groups of property owners, so this is something you may want to look into further. 

Do I need insurance if I purchase a property in the UK?

If you take out a mortgage to buy a property in the UK, you’re legally required to have insurance. However, if not, it’s up to you whether you want to take out any insurance policies such as home and contents insurance. 

How do I make a profit from the purchase of real estate in the UK?

To maximize your chance of making a profit from purchasing real estate in the UK, you can purchase a high-potential off-plan property, purchase a property in an area where demand is high, or focus your efforts on buy-to-let residential and commercial properties.