2022: Your Property Investment Strategy Options

As we approach the beginning of a new year, the inevitable questions around the best property investment strategies to follow in 2022 take centre stage.

With 2021 being a year of ‘watch and wait’ for many investors, it looks like 2022 will see a returned confidence in UK property as the doomsday predictions of a plummeting property market due to Covid haven’t come true.

So, with next year being the time to get firmly back on the property investment wagon, the key question is, which strategy will you be following?

When deciding which property investment strategy to follow, you first need to consider whether it fits with your lifestyle and financial goals, how diverse your property portfolio already is, and how to mitigate any risks involved. Then of course, you must realistically assess which strategy would best fit the funds you have available or look at ways of increasing your investment pot.

The UK Property Market in 2022

Leading Estate Agents are predicting that the acceleration of UK house prices will slow down during 2022 due to higher living costs, the end of the furlough scheme, higher mortgage rates and increased taxation. However, demand is likely to continue, just at a lower rate than the growth we saw throughout 2021.

Holiday Let Investments

With foreign travel restrictions imposed over the last 2 years, the ‘staycation’ has meant a boost in popularity for UK holiday lets which has attracted an increased number of property investors to this strategy. Despite international travel now being open (albeit, still cautiously), holiday makers confidence will still take a while to rebuild as Covid-19 continues to cause disruption across much of the world.

Experts are predicting that the increased demand for UK holiday lets will remain for at least the next 4-5 years, and with that increased demand, holiday let landlords are able to cash in further with boosted holiday rental prices.

Commercial to Residential Conversions

Opportunities are still rife for commercial to residential property development, as offices, retail and commercial premises stand empty in a post-covid high street. With a prolonged timeline of restrictions and the new ‘work from home’ culture, Covid has left investors with ample opportunities for repurposing and redeveloping these commercial spaces.

But for any new residential developments, developers and landlords must now consider hybrid working (as the way that people live and work has now significantly changed) and factor this into their development and cost plans.

Buy-to-Let

With some landlords choosing to exit the buy-to-let market after a stressful period through covid and unpopular landlord tax changes (such as the 3% stamp duty surcharge and removal of buy-to-let mortgage interest tax relief), the rental market has seen a boost in demand during Q3 2021 as there is an imbalance of supply and demand. It is predicted this demand will continue to rise in 2022 as trends have seen renters returning to key cities (after initially leaving them during covid).

A predicted strong employment market in 2022 along with a low supply of rental property, means that leading property platforms such as Zoopla are predicting another year of rental growth, forecasting a further 4% rise in rental prices by the end of the year.

Conclusion

It seems the focus for 2022 is to ‘cash in’ on opportunities that a post-covid world has created for property investors and developers, as a more settled year with increased market confidence is now predicted.