Stats do not tell the whole story

However, the tendency to look at the performance of the property market at a national level – most notably the various monthly UK house price indices – is problematic. National statistics do not provide a complete picture; certain areas of the market will have underperformed or overperformed in the last year.

Taking a look at the latest data from the Office for National Statistics, for instance, one can observe that England has the highest average house price, at £306,000, followed by Wales, at £213,000, Scotland, at £187,000, and Northern Ireland, at £172,000.

As such, despite Northern Ireland enjoying the most growth (5%) in the past 12 months, house values in England remain far above the rest of the UK.

Investors in the BTL space have arguably experienced more growth than anyone else in the last year

Looking on a regional level, it is clear again that some are performing far better than others. Property investors in the North East, for example, have seen their investments grow in value the most, at 5.5%, while investors in London enjoyed an annual growth rate of just 2.4% between April 2022 and April 2023.

At face value, therefore, one might suggest that property investments in the capital could be considered as losers of the last 12 months. But with London boasting a significantly higher average property value (£533,687) than the rest of the country, it would be hard to label investments in the capital as underperformers because they still boast strong potential for growth.

Alongside the different countries and regions of the UK market, there have been winners and losers among the different property types in the last year.

According to Land Registry data, detached houses have experienced the most growth in value (5.1%), while flats and maisonettes have grown in value at a much more conservative rate (3%), suggesting that they are the respective winners and losers when it comes to property type.

However, with the ‘race for space’ apparently coming to an end, flats and maisonettes could return to more substantial growth as people return to urban areas and push up demand. As the property market recovers following the recent slowdown, this will be an intriguing trend to follow.

Buy-to-let growth

Elsewhere, investors in the buy-to-let (BTL) space have arguably experienced more growth than anyone else in the last year, with rental prices jumping 5% in the 12 months to May 2023 on the back of high demand from first-time buyers pressing pause and some amateur landlords leaving the market due to rising mortgage rates. As a result, rental yields in the UK have increased by 4.71% in the last 12 months, suggesting that BTL investments are performing more solidly than the media would often make out.

Conversely, commercial property investors have had a more difficult year. With returns dipping by 9% across 2022, these investors can be considered as losers compared with their BTL counterparts.

However, this trend could reverse if the economy – and, therefore, demand for office and warehouse space – recovers in the coming months.

While the UK property market has faced challenges over the last 12 months, certain sectors, regions and property types have performed better than others. And with house prices stabilising, those that have outperformed the rest of the market could perform particularly well once the challenges of the last year recede.

Paresh Raja is chief executive of Market Financial Solutions