Property Market and Investment Statistics UK (2024)

This comprehensive overview provides the most up-to-date statistics and insights on the UK Real Estate Market for 2024. 

In this comprehensive overview, I have addressed the following key questions and insights regarding the UK Real Estate Market:

• How big is the UK property market?
• What is the growth rate of commercial real estate in the UK?
• How much will the housing prices be in the UK in 2024?
• What is the future of the rental market in the UK?
• Will mortgage rates drop in 2024 in the UK?
• What factors should investors consider when choosing from investment options?
• What is the best type of property to invest in the UK?
• How do UK landlords typically fund their property investments?

Key UK Real Estate Market Insights at a Glance:

• The UK real estate market is projected to reach US$23.32 trillion by 2024.
• The UK residential market size is expected to grow from USD 360.27 billion in 2024 to USD 476.46 billion by 2029, with a CAGR of 5.75%.
• UK rental market is anticipated to grow by 21% by 2028, with a forecast of a 4.5% rise in 2024.
• 54% of investors expect interest rates to fall in 2024, while 57% cite macroeconomic indicators as key investment drivers.
•  “Generation rent” continues to expand, with a 16% growth in the 18-year-old population projected by 2030, driving demand for rental properties.
• Buy-to-let properties are favored by 24% of investors, followed by student accommodations (18%) and holiday lets (16%).
• Valued at over 1.7 trillion U.S. dollars in 2022, with capital values expected to rise by 2.5% per year.
• A 2.7% year-on-year increase as of June 2024, with average property prices at £289,824 in July 2023.

How big is the UK property market?

The UK property market is substantial for significant growth in the coming years. The overall UK Real Estate market is estimated to reach an impressive US$23.32 trillion by 2024, with the Residential Real Estate segment dominating at a projected US$19.30 trillion. 

This residential segment is expected to grow at an annual rate of 2.52% from 2024 to 2029.

More specifically, the UK Residential Real Estate Market size is estimated at USD 360.27 billion in 2024 and is forecast to reach USD 476.46 billion by 2029, growing at a Compound Annual Growth Rate (CAGR) of 5.75%.

From an investor’s perspective, the UK property market offers great investment opportunities. Its large size and steady growth show profit potential.

However, investors should watch for differences across regions, market saturation, and changes in interest rates or policies. The focus should be on choosing the best areas and property types for the best returns.

What is the growth rate of commercial real estate in the UK?

The capital values for commercial property in the UK are expected to grow by 2.5% annually.

The UK was the second-largest commercial real estate market in Europe in 2022, with a total value exceeding 1.7 trillion U.S. dollars. Investment in the sector reached nearly 65 billion euros that same year. 

Industrial and logistics real estate is anticipated to grow at an even faster rate, with a projected 4% annual increase. Despite economic challenges, moderate growth in capital values is expected to continue until 2027.

These figures reflect a stable and expanding UK commercial real estate market. The 2.5% annual increase in capital values signals steady growth, while the faster 4% rise in industrial and logistics sectors highlights a shift in market dynamics.

How much will the housing prices be in the UK in 2024?

The average UK house price reached £288,000 in June 2024. This is £8,000 more than a year ago. Prices went up by 2.7% compared to last year.

Looking ahead, the Office for Budget Responsibility (OBR) predicts more increases. They forecast a 1.2% rise in 2025, 3% in 2026, and 3.5% in 2027.

These numbers show a steady increase in housing costs. The rise isn’t huge, but it’s noticeable. People looking to buy homes may find it a bit harder. Those who already own homes might see their property value go up.

What is the future of the rental market in the UK?

The UK residential rental market is poised for significant growth, with forecasts indicating a cumulative increase of nearly 21% by 2028.

As of September 2023, the average rental yield in the UK stands at 5.03%, with the highest rental yields found in the North East at 7.2%. A 5% rise in rental prices is anticipated in 2024, while UK-wide rents are expected to increase by 3-4% annually between 2023 and 2026.

Additionally, a forecasted national rent increase of 4.5% in 2024 will contribute to an overall growth of 18.8% from 2024 to 2028. Notably, the industrial real estate sector is projected to experience the highest annual rental growth during this period.

Since 2021, rental growth has accelerated, with March 2024 marking a decade-high in annual percentage growth. Demand for rental properties is driven by factors like housing affordability and mortgage rates.  Overall, the trend indicates that the rental market is thriving, making it an attractive option for investors and landlords looking for opportunities in the coming years.

Will Mortgage Rates Drop in 2024 in the UK?

Mortgage rates in the UK are expected to decrease, with predictions suggesting they could reach around 4.75% by the end of 2024.

Notably, mortgage rates have shown a downward trend. In July 2023, the average mortgage rate was 5.79%, which fell to 5.34% in August and further declined to 5.30% in September. Furthermore, as mortgage rates decrease and inflation drops, buyer demand is starting to rise, with a reported 12% increase in inquiries for properties since the August Bank Holiday. Research firm Capital Economics suggests that rates could hit 4% by the end of 2025.

The overall trend indicates that mortgage rates are likely to continue falling, which could encourage more buyers in the property market. As rates drop, affordability improves, making it easier for people to secure loans for home purchases. This could also stimulate demand in the housing market and support the growth of the residential rental market, which is expected to rise by nearly 21% by 2028. Although the decrease may be gradual, the projected drop in rates is a positive sign for both homebuyers and investors looking to enter the market.

What is purpose-built in the UK?

Purpose-built in the UK refers to buildings designed for a specific use.

One example is purpose-built student accommodation. This is housing made just for students. It’s becoming more important as the number of young people grows. By 2030, there will be 16% more 18-year-olds in the UK. This means more students need places to live.

Another type is purpose-built rental homes. These are made to be rented out, not sold. There’s high demand for these, especially for bigger homes. Three-bedroom properties are wanted 33% more, and two-bedrooms 25% more.

Purpose-built housing helps meet specific needs. It can offer better living spaces for renters. This is important because private renters often spend more of their income on housing than others. Purpose-built homes might help make renting more comfortable and affordable for many people.

What factors should investors consider when choosing from investment options?

Investors should consider multiple factors when choosing investment options.

Macroeconomic indicators are crucial. 57% of investors say interest rates and inflation greatly influence their decisions. Currently, 54% believe interest rates will fall in 2024, while 45% think inflation will remain a challenge.

Market trends and forecasts are also important. 51% of investors closely monitor property market trends. 55% place high importance on forecasts for house prices and rents when making decisions about their portfolios.

Risk assessment has become more vital. 55% of investors say they’ve become more diligent in assessing risk over the last two years. This shows a growing focus on safety in investing.

Information sources matter too. 46% of investors use specialist property websites for analysis and opinions. 35% rely on independent financial advisors, wealth managers, or brokers for guidance.

These trends suggest that successful investing requires a mix of economic awareness, market knowledge, and expert advice. Investors are becoming more cautious and informed, using various resources to make decisions. This approach can help balance potential returns with risks in the changing investment landscape.

What is the best type of property to invest in the UK?

Buy-to-let (BTL) properties are currently the most popular type of investment in the UK, making up 24% of investor preferences.

Student accommodation comes second at 18%, followed by residential property not for letting at 17%. Other popular investment options like holiday lets, commercial real estate, and real estate investment trusts (REITs) each hold 16% of the market. Mixed-use properties and development projects attract 13% of investors each.

The popularity of buy-to-let properties suggests that rental income remains a strong driver for investors in the UK. However, alternative options like student accommodation and holiday lets are also appealing due to their potential for high returns in specific markets. 

Investors may choose the best type of property based on their individual goals, risk tolerance, and market demand, with rental properties consistently being a safe and lucrative option in a stable UK market.

What Economic Factors Contribute to the Stability of a Real Estate Investment?

Key economic factors such as employment, industry turnover, and homeownership rates all play a role in maintaining stability in the UK real estate market.

Homeownership in the UK stands at 65%, a rate similar to countries like the Netherlands, Sweden, and Denmark. Additionally, Londoners spend more than one-third of their household income on rent, highlighting the high demand for rental properties in urban areas.

In 2022, the UK real estate industry employed 545,000 people and generated over £65 billion in turnover. The commercial real estate sector alone saw an investment value of nearly €65 billion, making it the highest in Europe. 

High employment in the industry and significant turnover demonstrate ongoing activity and growth. The substantial investment in commercial real estate points to continued confidence in the market, while steady homeownership rates signal long-term stability. Investors, however, should also consider the high rental costs in cities like London, which could affect both affordability and demand for rental properties.

What are the statistics for landlords in the UK?

Most UK landlords have significant experience, with 53% having been in the market for over 11 years.
Landlords with four to ten years of experience make up 39% of the population, while those with three years or less account for only 9%. This indicates that the majority of landlords in the UK have been involved in property management for a long time.

The high percentage of experienced landlords suggests a stable and mature rental market in the UK. With over half having more than 11 years of experience, the market benefits from seasoned investors who are familiar with its dynamics. 

The smaller number of newer landlords may indicate higher barriers to entry or a cautious approach to property investment, possibly influenced by economic factors such as mortgage rates and government policies.

How do UK landlords typically fund their property investments?

In the UK, 36% of landlords own their properties outright, meaning they have no mortgage debt.

A similar percentage, 35%, own their properties through buy-to-let mortgages. Additionally, 29% of landlords have a mix of owned and mortgaged properties. This distribution indicates a diverse approach to funding property investments among landlords.

The data shows that a significant portion of UK landlords operate without mortgage debt, which can provide financial stability and reduce risk. 

However, nearly as many landlords rely on buy-to-let mortgages to finance their properties, reflecting a willingness to leverage loans for investment. The combination of outright ownership and mortgaged properties suggests a flexible investment strategy, allowing landlords to manage their cash flow while still growing their property portfolios.

Investors in the UK balance professional advice with personal research

Most investors (73%) value advice but also do their research. This shows a thoughtful approach to decision-making. Only 13% fully rely on financial advisers, while 14% believe they can make decisions based solely on online information.

For information, traditional news sources are still popular. BBC News is the top choice, used by 77% of investors. However, social media platforms are also important. Facebook (38%) and LinkedIn (32%) are more popular than some traditional news outlets like Sky News (31%) and Daily Mail (29%).

This data suggests that investors prefer a mix of expert advice and self-directed learning. They’re not just relying on one source of information. Instead, they’re using a variety of sources, from trusted news outlets to social media platforms.

The high use of social media for investment information is interesting. It shows that investors are looking for real-time updates and diverse opinions. However, it’s important to be careful with information from these sources.

Overall, successful investing seems to involve balancing professional advice, personal research, and a variety of information sources. This approach can help investors make more informed decisions in the complex world of property investment.

Data Sources:

• statista.com
• mordorintelligence.com
• gov.uk
• beechholdings.co.uk
• nrla.org.uk
• moneymarketing.co.uk
• mfsuk.com
• jll.co.uk
• prosperity-wealth.co.uk
• thetimes.com
• Paragon bank
• English Private Landlord Survey

Final words

The UK property market shows resilience and growth potential in 2024 and beyond. Key trends include rising house prices, growing rental demand, and the popularity of buy-to-let properties. 

Economic factors, such as falling mortgage rates and stable employment in the real estate sector, contribute to market stability. Investors are becoming more cautious and informed, balancing professional advice with personal research across various information sources. 

While challenges exist, including regional variations and affordability concerns in urban areas, the overall outlook for UK real estate remains positive, supported by experienced landlords and evolving investment strategies.