Buy-to-let investments remain a sound business, despite changes to mortgage relief, stamp duty and new regulations. Investing in bricks and mortar is still more reliable than the volatile stocks and shares market. Although yields may not be as strong as a few years ago, property prices continue to rise, which makes it a good long-term investment. New research shows that house prices in the UK are set to rise by 2.5% each year for the next two years. Furthermore, it is forecast that prices will rise overall by 18% cumulatively, over the next five years to 2022.

Analysis by Strutt & Parker estate agents shows the figure for the prime central London region is much lower, however. It is estimated that this year’s figures could be between -5% and 0% this year. However, the cumulative growth for the next five years is forecast to be a healthy 23%. Strutt & Parker director of research, Vanessa Hale, said that it is difficult to forecast the market with certainty from 2019. This is because political and economic conditions remain unclear, particularly with the ongoing Brexit negotiations. However, the estate agent does expect the market to bounce back and return to growth once the situation is more stable in the UK.

The National House Price Index shows that UK property prices rose 2.5% in the year up to the first quarter of 2018. The growth, year on year, to Q1 shows the best performers were in Northern Ireland at a healthy 7.9%, Wales at 6% and the West Midlands at 4.8%. London had the weakest growth for the quarter at -1.1%, Overall in the UK, total transactions are similar to this time last year, except in central London where they are lower than in 2017. Forecasters predict that central London letting prices will remain flat this year, but return to growth next year.

According to Hometrack, Edinburgh is the fastest-growing city as far as property prices are concerned, with an average price of £218,600 and annual growth of 7.7%. Cities in the north of England and the Midlands also increased by more than 6% in the year to January 2018. These include Manchester, Birmingham, Leicester and Liverpool. Hometrack research director, Richard Donnell, believes cities like Manchester and Birmingham could see rises of between 20% and 30% in the next four years, which make them attractive places to invest.

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