Topic: Real estate market in the UK
What’s the size of the commercial property sector in the UK?
After Germany, the UK is the biggest commercial real estate market in Europe, valued at over 1.6 trillion U.S. dollars. Commercial real estate can encompass multiple property types with a focus on financial return and renting, such as industrial, office, retail, leisure, medical, hotel, and in some cases even the privately rented residential subsector. In the UK, investments into commercial real estate peaked in 2015 but have been decreasing since. In 2020, the commercial property investment market saw the lowest value since 2012, measuring roughly 46.3 billion British pounds. Among many other factors, this fall in investment activity can be attributed to the lengthy period of Brexit negotiations and the coronavirus pandemic.
How has the residential property sector developed in recent years?
Since the coronavirus outbreak, demand on the residential property market has been strong, which has in turn affected house prices around bigger cities. The limited availability means competition among home buyers has been higher and the prices have been rising at a faster pace. In November 2021, the average house price in London reached almost 520,000 British pounds and was almost three times as high as in North East. Most households in the UK own their homes and rely on a mortgage for home financing. Comparing home ownership rates in different European countries, it can be seen that the UK ranks close to the Netherlands, Sweden, and Denmark, with 65.2 percent.
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