Gazumped Britain: UK Property Buyers Pipped to the Post
Over the course of 2017, it is anticipated that UK property investment will exceed £50 billion – spurred in no small part by a rising volume of foreign capital from international investors, and increasing domestic demand. Looking ahead, real estate service provider Savills predicts that average UK house prices will increase by 2% in 2018 and 5.5% in 2019 to a total of 13% by the end of 2021.
Despite these positive growth forecasts, prospective and seasoned property investors in the UK are being disadvantaged by a flawed and protracted high street loan system that is increasingly at odds with the fast-paced dynamism of the nation’s renowned real estate market. For Britain’s asset rich, our recent research revealed the acute disconnect between wealth and banking credit scores, demonstrating that the wealthiest echelons of society still face difficulties when trying to secure a mortgage, second mortgage, or loan.
Delving specifically into this point, we have launched a timely new report – Gazumped Britain: UK Property Buyers Pipped to the Post. Having surveyed a nationally representative sample of over 2,000 UK adults, this report uncovers the key reasons why investors are commonly inhibited in their attempts to purchase a property at the critical closing stages, as well as the broader challenges this poses for the future of Britain’s property investors.
The findings from this research were enlightening. The survey revealed that 15% of adults in London – the equivalent of more than 1 million people in the capital – have lost out on a property purchase to a rival buyer despite having an offer accepted. This is three times higher than the figure of 5% from the UK as a whole. Across the country, over 1.5 million people revealed that they had lost out on their “dream home” because a property purchase fell through after an offer on the house had been accepted. Our research has also showed that millennials experience greater problems in accessing finance in a timely manner and losing out to rival bidders than the older generations – 1.18 million millennials said they had lost out to another buyer after having an offer accepted.
Our study revealed that an inability to access finance from traditional lenders in a fast and efficient manner is causing many investors to miss out on real estate opportunities. The long-term implications this poses for property investors is particularly concerning, with real estate contributing over £94 billion to the UK economy. The statistics show that as mortgage lenders implement greater regulation, getting finance promptly will continue to be an increasingly common challenge. This is one of the main reasons the bridging industry has significantly risen in popularity among property buyers and investors over recent years – in such a competitive industry, speed is everything and alternative lending options such as bridging provide the flexibility required to meet the demands of the fast-paced market.
For a full summary of the results, download Gazumped Britain: UK Property Buyers Pipped to the Post.