Real Estate Expert: Anna Clare Harper, Investment Advisor, asserts that Labour will not achieve the target of constructing 1.5 million homes.
Property chat is a common topic in the UK. Everyone's got an opinion on where house prices are headed, the next red-hot real estate market, or the perfect spot for new homes. But to truly understand the market, it's essential to hear from the pros who breathe property every day.
Each month, we'll be quizzing an expert on all the hot real estate topics, including mortgage rates, buy-to-let, and housebuilding. We'll even dive into their personal experiences, such as their mortgage and best and worst investments.
This time, we spoke to Anna Clare Harper, the CEO of GreenResi, a sustainable investment firm. Anna is a well-known property investment expert who hosts The Return property and investment podcast (with 350,000 downloads) and has written three books on property investing.
She began investing in real estate while working her first office job, and today, she boasts her own buy-to-let portfolio. At GreenResi, she advises property investors who manage over 70,000 homes on sustainability matters.
In the Hot Seat
Anna Clare Harper: Property Investment Guru
Anna Clare Harper is a property investment expert and the CEO of GreenResi, a sustainable investment advisory firm. She is the host of the popular podcast, The Return, which focuses on property and investment. With three published books on property investing, she's an authority on all things real estate. She began investing in property while still working a regular job and now manages her own buy-to-let portfolio. At GreenResi, she advises property investors who collectively manage over 70,000 homes on sustainability matters.
The Interview
What's the Outlook for House Prices in the Next 12 Months?
Anna believes house prices will likely rise by an average of 2.5% in the next year, although this could vary depending on the location. Overall, she predicts that inflation-adjusted prices will remain stable. The reason? Increased demand, sparked by shrinking household sizes and population growth, coupled with a limited supply of homes. Unless there is a drastic increase in forced sales, homeowners will hold out for strong prices, keeping average house prices high.
What About Prices Over the Next Decade?
Across the next decade, Anna expects house prices to rise by around 2.5% annually in nominal terms. This growth is driven by population growth and shrinking household sizes. The Office for National Statistics predicts that there will be 1.6 million more households in England over the next ten years. Increased immigration, currently at 728,000 per year as of June 2024, will add to the demand for housing, further straining the already limited supply. In simpler terms, we're not building homes quickly enough to keep up with demand.
What Threatens House Prices the Most?
According to Anna, policy and tax are the biggest threats to house prices. While there's no political advantage in implementing measures that intentionally lower house prices, policies and taxes do have a subtle, indirect impact. A notable example is the abolition of non-dom status, which might affect foreign investor demand.
What Will Mortgage Rates be in 12 Months?
Mortgage rates are projected to drop slightly over the next year as inflation cools and base rate expectations decrease. Anna anticipates that the most competitive five-year fixed rates will be around 3.5% this time next year. Although rates are predicted to fall, they won't revisit the ultra-low levels seen in the recent past.
Which Mortgage Do You Have on Your Home?
Anna has a five-year fixed-rate mortgage on her home, which she secured in December 2024. She chose a five-year term for peace of mind, despite the marginal difference in cost compared to shorter-term products. The mortgage is a repayment type, offered by her lender as the only option.
What's the Most Urgent Property Crisis?
Overregulation is the most pressing property crisis, according to Anna. While measures to improve the quality and safety of homes for vulnerable residents are commendable, the resulting rules and regulations have made it harder and more expensive for developers and property investors to build new homes or upgrade existing ones. Simplifying and aligning regulations to meet a broader range of needs—including the need to build new and upgrade existing homes quickly—is crucial for creating more affordable, high-quality, energy-efficient homes.
Can Labour Achieve Its Target of Building 1.5 Million Homes by 2029?
Anna is skeptical that Labour will meet its goal of building 1.5 million homes by 2029. While the target is politically savvy, it requires significant investment and capacity, such as enough skilled tradespeople, to be realistic.
Is Buy-to-Let a Good or Bad Investment Today?
The suitability of buy-to-let as an investment depends on individual goals, Anna says. While borrowing costs and compliance have increased, making buy-to-let less passive than in the past, residential property remains a stable long-term investment offering income and capital growth. For hands-on investors, direct property investment can provide an appealing risk-reward relationship. However, for passive investors seeking income, investing in diversified funds or Real Estate Income Trusts might be a better option due to the increased complexities of buy-to-let.
Are Landlords Being Unfairly Targeted?
Landlords are often viewed negatively, alongside property developers and estate agents, but many property investors have genuine intentions and see their portfolios as businesses, Anna notes. Recent regulations have been designed to discourage individual, less-regulated investors in favor of professional property investors who are more easily controlled. This trend has led some older landlords to reconsider whether they want to continue in the business.
Where Would You Invest in Property for the Next Decade?
For capital growth, Anna recommends locations with strong inward investment, such as Cambridge and its outskirts. Cambridge's world-class research, global employers, and upcoming infrastructure improvements create a favorable setting for long-term capital growth. Surrounding areas like Ely, Waterbeach, and Cambourne offer lower entry prices, making them attractive to buyers seeking homes near well-connected transportation hubs.
Which Location Would You Avoid?
Personally, Anna is cautious about prime London locations that offer poor yields and are heavily influenced by taxes and regulations affecting international investors rather than long-term demand from residents.
Will Prime Central London Prices Ever Reach Pre-2014 Levels Again?
Although it won't recover quickly, the ongoing appeal of Prime Central London remains due to its stability, making a complete write-off unlikely. Although the era of rapid growth fueled by low interest rates is over, London remains an international city with strong demand and limited supply.
If You Were Chancellor of the Exchequer, How Would You Help First-Time Buyers?
Focus on supply, rather than demand, Anna suggests. Addressing constraints such as unlocking more land, reforming planning, and investing in training for apprenticeship programs would make building easier. More building would also stimulate local economies.
Do You Have Any Negotiation Tips for Buyers Making Offers to Estate Agents?
Keep emotions in check. In the UK, there are always more than 500,000 homes on the market, so don't become fixated on a single property. Continue viewing other properties and maintain a willingness to walk away. This strategy gives you negotiating power and a firm stance with the seller.
What's the Best Advice You Can Give to Someone Looking to Get on the Property Ladder?
Avoid skimping on professional fees. For example, hiring the cheapest conveyancing solicitor could potentially lead to higher costs down the line. Choosing the wrong solicitor based on an agent's recommendation could result in a stressful and lengthy process. Take the time to find a solicitor you trust, even if it means incurring slightly higher fees upfront.
What's Your Best Ever Property Investment?
One of Anna's favorite property investments was 21 flats in Warrington. This project, purchased for a private investor by the company Anna was working for, boasted a 9% yield from day one. The location, which is equidistant between Manchester and Liverpool and benefits from strong infrastructure, jobs growth, and relatively low entry prices, appealed to both seasoned and international investors.
What's Your Biggest Property Investment Regret?
An early project involved barn conversions, new builds, and extensions on a single site. Managing multiple projects on a single site was too complex, teaching Anna to minimize complexity unless the returns are exceptional. The project ultimately broke even, but it served as a valuable lesson.
What Would You Do if You Inherited £100,000 Today?
Today, Anna would split the £100,000 between property investment, low-fee diversified ETFs within a stocks and shares ISA, and her business for high-risk, high-reward opportunities.
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HOW THIS IS MONEY CAN HELP
- Looking for a new mortgage? Check out the best rates here
- Anna Clare Harper, the CEO of GreenResi and a property investment expert, believes house prices will likely increase by an average of 2.5% in the next year.
- Across the next decade, Anna expects house prices to rise by around 2.5% annually in nominal terms, driven by population growth and shrinking household sizes.
- According to Anna, policy and tax are the biggest threats to house prices, with the abolition of non-dom status potentially affecting foreign investor demand.
- Mortgage rates are projected to drop slightly over the next year, with the most competitive five-year fixed rates expected to be around 3.5%.
- Anna has a five-year fixed-rate mortgage on her home, which she secured in December 2024. She chose a five-year term for peace of mind.
- Overregulation is the most pressing property crisis, making it harder and more expensive for developers and property investors to build new homes or upgrade existing ones.
- For capital growth, Anna recommends locations with strong inward investment, such as Cambridge and its outskirts, where she sees potential in surrounding areas like Ely, Waterbeach, and Cambourne.
- If Anna were Chancellor of the Exchequer, she would focus on addressing supply constraints, such as unlocking more land, reforming planning, and investing in training for apprenticeship programs to make building easier and stimulate local economies.
