UK property prices set to boom – major report

Breen further explained that this real estate cycle is markedly different from previous ones, as rental income has not faced the same challenges. “That means the recovery for future-fit buildings should be faster – boosted by lack of high-quality supply,” she added.

Abrdn is particularly optimistic about residential, industrial, and certain retail properties, which are expected to outperform the broader property sector. Breen highlighted that residential properties are attractive due to imbalances in supply and demand, while industrial and logistics properties are benefiting from the need for modern warehousing to support global and local distribution. Retail sectors that have adapted to changes in consumer behaviour since the pandemic are also performing well.

The fact that the construction sector is suffering is also good news for home buyers and investors as less inventory is being prepared to dampen market prices. Construction output is forecast to fall by 2.9% this year, worse than the  2.2% contraction that was forecast in the previous quarter. Private housing new build and repair, maintenance and improvement (rm&i) have been the main drivers of the underperformance.  

Lenders are already starting to cut rates on mortgages, including buy-to-let. Earlier today, Foundation Home Loans introduced a new limited-edition HMO (House in Multiple Occupation) product and announced rate reductions across its ‘Buy to Let’ and ‘Solutions by Foundation’ ranges. Meanwhile, The Mortgage Lender has also cut rates on its buy-to-let offerings.

Foundation Home Loans’ ‘Buy to Let’ range now includes a new five-year fixed-rate HMO product, offering up to 75% Loan-to-Value (LTV) at an interest rate of 5.74%, with a fee of £4,995. This product requires a minimum loan amount of £200,000.