Cheapest borrowing in history could be major catalyst for UK property market investors

February 12, 2021

The Bank of England has caused quite a stir by putting banks on notice to prepare for negative interest rates in the next six months. The idea is designed to encourage savers to become spenders, in order to get the economy moving, as the UK deals with the economic fallout of the pandemic. 

Negative interest rates aren’t good news for savers, even compared to the already record lows that are in place right now. However, they could spell excellent news for borrowers. A variable tracker rate mortgage aligned with the base rate, for example, could be the cheapest opportunity in history to borrow money against a property asset. Investors, it’s fair to say, are sitting up and taking notice.

“This proposed move to negative interest rates will almost certainly be a major catalyst for investors to move their positions in currency and look to other asset classes for wealth protection and yield. I believe we will see a global surge in investment into the UK property market as a result.”

Matt Harper-Penman, Group Director, Fabrik Property Group

Certainly, the alternatives to property aren’t looking great right now. Crypto is, as ever, highly volatile. ISAs and bonds, meanwhile, just can’t compete in terms of the returns they offer. Precious metals remain a solid market, but a precious metal investment is a hedge rather than a yield-bearing investment that will provide an income. And while the stock market remains an option, the theatrics of the GameStop short squeeze a couple of weeks ago served to highlight how extremely unfair the playing field actually is.

“All of this points to the advantages of investing in UK property. The combination of people living longer and families living in smaller units means that demand for homes is at an all-time high. Many local authorities are falling behind their house-building targets, meaning that supply isn’t likely to catch up with demand any time soon.”

Matt Harper-Penman, Group Director, Fabrik Property Group

For investors, this can present the ideal combination of capital growth and healthy yields. Over the past year, despite the pandemic, Zoopla reports that this lack of supply resulted in a 4.3% rise in prices nationally. The firm’s December 2020 House Price Index showed that demand for homes in the first two weeks of 2021 was up by 13% on the same period in 2020. At the same time, the flow of housing stock onto the market was down by 12%, exacerbating existing supply issues. 

The Zoopla figures highlight Liverpool as leading the UK’s house price growth, with an increase of 6.3% in the year to December 2020. Manchester achieved growth of 6.0% over the same period. Both cities are in the midst of an eye-watering amount of regeneration work, as they continue to embrace new urban lifestyle and leisure standards. Developments such as The Roscoe in Liverpool and Michigan Towers in Manchester allow investors to benefit fully from those ambitious regeneration projects.

“2021 was always going to be an interesting year for the UK property market, with both the pandemic and Brexit coming into play. With the prospect of negative interest rates thrown into the mix, there’s scope for it to be an historic year indeed.”

Matt Harper-Penman, Group Director, Fabrik Property Group

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Wayne Venter

International Business Development Manager

Wayne has been in the property industry for over 17 years. He started out selling residential properties in the northern suburbs of Sandton, South Africa, for one of the bigger real estate brands, before moving to a boutique, Johannesburg-based property developer. He worked at a senior level, specialising in residential developments on the north coast of KZN and various other areas of Northern Johannesburg.

Wayne moved to selling luxury, free standing homes and apartments in Sandton, Johannesburg in 2006, having joined the Country’s leading real estate brand and within six months was leading the team. In 2008, he began to focus exclusively on the luxury apartments in central Sandton, priced from approximately R2 million to R60 million. Over the years, he has also added commercial property sales and rentals to his repertoire, as well as building his own investment property portfolio between 2011 and 2018.

By 2018, realising where the South African property market was headed, he sold out of his investment property portfolio to de-risk and went looking for a real estate company to buy into. South Africa’s property market was extremely volatile at that time, so Wayne took the initiative and moved to London to work in property in the UK.

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Edward Snell

Senior Property Consultant

I live in Spanish countryside with my wife and our 11 rescue dogs.

Originally from Bedford, I have two sons, two step children & 6 grandchildren.

I have a keen interest in property investment and over the years have built up a personal portfolio for the purposes of rental income and capital growth.

I have over 20 years’ experience in property investment, both in the UK & overseas.

My other interests include animal welfare, football, motorsports, travel and music

My personality is of an even temperament and I enjoy the cut and thrust of doing deals.
I am happy and successful in what I do & take great pleasure in providing my clients with successful outcomes.

I’m a good team player but work well as an individual.

Daniel Harburn

Property Sales Consultant

Daniel had a passion for property from a young age so he began his working life by undertaking a plumbing apprenticeship for a large well known UK developer to pursue a career in construction. After qualifying he soon realised that building relationships was a preferred skill of his due to his loyal and trusting nature.

From then on Daniel launched his career in sales where he worked his way to to a high performing sales person at a creative media company. Part of Daniels success in accumulating clients over the last 10 years is put down to his diligence in customer experience.

Daniel has a keen interest in golf and also in keeping himself fit which is essential as he and his fiancé have 4 year old twins, Jacob and Sofia who keep them both on their toes.

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