New Covid variants and Russia’s invasion of Ukraine have both led to challenges for the property market. The Covid variant created a lack of materials and a restriction on the number of workers permitted on construction sites. While, the Ukraine crisis has interrupted supply chains significantly, driving up construction prices and forcing developers to postpone projects due to difficulties obtaining critical supplies at reasonable prices.
According to Savills, UK home delivery levels have fallen for the third consecutive quarter, and the number of authorised construction sites in the UK has decreased by 25% since 2019. This will have an influence on the housing market, as supply cannot keep up with demand. A projected sustained rise in UK real estate prices is indeed a result of the shortfall of available housing.
Since the end of the first lockdown in summer 2020, property demand has indeed been strong. Mortgage companies have been approving more applications than before the pandemic, and property prices have kept going up. This phenomenon is not exceptional to the UK. Demand for housing has pushed prices up in most markets and has led to cities across the world experiencing unaffordability problems. According to The Guardian, over the last ten years “there has been a colossal global real estate boom that has doubled the value of residential property to $350tn (£268tn) – four times the size of annual world output”.
As supply struggles to keep up with demand, house prices and rental growth is likely to continue. Despite the already experienced growth in rents and prices, real estate investments continue to be a viable and profitable option. CI-Property is here to assist you in getting started with your investment and uncover good deals that will provide you with consistent returns.