One of the major questions that investors face is what they should put their money into in order to achieve the maximum possible returns. The most common conundrum is whether property or stocks and shares are the most favourable option.
These are the two most well-known and accessible types of investment, and both have attractive characteristics which will appeal to different types of investors. Here, we will explain both and point out the positives and negatives.
The UK property investment market is known around the world as an opportunity that is both profitable and stable. For many, property is a safe bet that offers the prospect of long-term returns in a simple format.
When you purchase a property to rent out, you are doing so with the potential to earn two streams of income: capital appreciation and rental income. The former is the profit you make over the initial purchase price when you sell the property down the line; the latter is the steady monthly income you receive from tenants paying rent.
This dual income stream is a major advantage of property investment – and the best part is that the ongoing supply and demand issue (known as the ‘housing crisis’ by many) means that there is little prospect of a slowdown in growth, and therefore profit, anytime soon.
The UK Government estimates that as many as 345,000 homes are needed each year in the UK. However, the reality is that we are only building approximately 240,000 a year. That means that every 12 months sees the available supply drop even further, ensuring that demand, house prices and rents continue to increase.
With this in mind, it is no surprise to see Savills predict that the average UK house price is set to increase a further 21.1% by 2025. Some areas such as the North West (28.8%) and the West Midlands (24.0%) will exceed that and see even more impressive growth – making property in Manchester and Birmingham even more desirable as an investment than ever before.
This combination of profitability and stability is extremely rare and makes UK investment property a very strong choice for investors looking at reliable, long-term profits. This profitability can be magnified by investing off-plan and purchasing a property at a below-market rate which will instantly have earned significant capital appreciation upon completion.
For more information about investing off-plan in the UK, get in touch with our team today by clicking here.
Stocks and shares
Investing in stocks and shares is an altogether more volatile prospect than property. While the potential rewards are high, the chances that you will get that reward are both unreliable and much lower. It is rare that you will be able to find a stock that grows enormously without taking a large risk.
The two income streams available when investing in stocks and shares are capital gains (when you sell your shares) and dividends (which are when you receive a portion of a company’s profits relative to how many shares you have). Despite sharing this superficial similarity to property investment, investing in stocks and shares has some features which are quite different.
A point in favour of stocks and shares is that a range of mobile phone apps and other small companies are now making it easier than ever to invest – though it should be noted that using a service like eToro or Acorns is unlikely to net you the big payouts.
Likewise, it is possible to enter the world of stocks and shares at a much lower entry point than property. Buying a bundle of shares is not as expensive as buying a property. However, again it is worth noting that unless you are buying in bulk – and therefore putting a large amount of money in – it is highly unlikely that you will be able to make the enormous returns that are the main potential benefit of this type of investment.
The third point to bear in mind about investing in stocks and shares is that they are nowhere near as reliable as investing in property. Whereas the property market is stable and demand is increasing year-on-year, the stock market is vulnerable to factors outside of your control.
The most obvious recent example is the Covid-19 crisis. Whereas property continued to grow throughout it, and demand grew more than ever, it is estimated that more than £191bn was wiped off the FTSE 100 at the beginning of the crisis. Furthermore, many are predicting a tough period ahead for the stock market thanks to a global economy that remains uncertain – in stark contrast to the UK property market which common consensus agrees will continue to grow.
Both the property market and the stocks and shares have their benefits but, overall, property investment is the way forward for most investors thanks to its reliability and the strong growth ahead of us.
For more information about investing in UK property, get in touch today and speak to our expert team by clicking here.
In uncertain times it is natural to look for secure, stable ways to grow your money that don’t carry the same high risk as the stock market. For those looking to build and profit in a sensible manner, two of the most intriguing options are putting your money into a savings account or buying property.
Using a savings account – i.e. investing with a bank – is a tried and tested investment method that is both predictable and reassuring. The many benefits of doing this include its ease, and the fact that many savings accounts allow you to access your money whenever and wherever you wish.
There are exceptions such as locked ISAs which will not allow you to access your funds without meeting certain conditions, but on the whole, putting your money into a bank means that you can save for the future at the same time as having access to your money.
Another notable benefit of putting your money in a bank is that it is one of the safest ways of investing and looking after your funds. Under the Financial Services Compensation Scheme, if a UK bank or building society that you save with goes bust, you are guaranteed to get back up to £85,000 of your savings.
However, this does not mean it is risk-free, and the main danger of saving with the bank is that interest rates are so low they are barely keeping up with inflation, if at all. When it is noteworthy that a bank is offering a savings rate of 2%, it is a sign that this could be a major problem. While your money won’t go anywhere, its value is gradually being eroded if it is sat in a savings account as inflation goes up, and you will be falling behind.
Furthermore, the Bank of England base rate is at 0.1% and set to remain so for the foreseeable future. Until that changes, it is unlikely that higher savings account rates will emerge – and even if they do, it is unlikely that they will go much higher.
Compare and contrast this to UK property investment which offers many of the same benefits as putting your money in the bank, but with a whole range of additional positives.
Much like savings accounts, UK property is a reliable investment option with a strong pedigree. Bricks and mortar is your classic tangible asset, and the ongoing supply issues in the UK (the ‘housing crisis’) ensure that your asset will be in demand for the long term. The UK simply is not building enough homes, and with the rate of housebuilding increasing by just 1% a year, this shows no signs of changing.
This is far below what is needed to meet demand. The UK Government estimates that as many as 345,000 homes are needed each year in the UK – approximately 100,000 more than are being built every 12 months. As the gap between supply and demand widens, house prices continue to increase along with the capital gains that bring for investors.
The latest house price growth data illustrate the scale of demand and the money to be made by investing in UK property.
New figures from search engine giant Zoopla show that the average UK house price reached a record high of £235,000 in August 2021. This represents a growth of 6.1% over 2021 to date and is double the rate of growth seen in August 2020.
When we focus in a bit, certain markets come into sharper relief as good bets for investors. Leading the way is Liverpool, with the city seeing 9.8% growth over 2021 so far, with Manchester not far behind on 8.1%. This backs up recent analysis from Savills which upgraded the residential forecast in the North West of England and predicted another 28.8% of growth in the region by 2025.
Furthermore, the same Zoopla report shows that sales are being agreed at the fastest pace for at least five years and that the average home now sells within 30 days. It is clear to see that demand for housing is through the roof in the UK, and until supply catches up this situation will continue.
Right now, it is undeniable that investing in property makes more sense than putting your money in the bank. The UK property market is a reliable long-term bet for investors, and the returns on offer are hugely more impressive than a traditional savings account.
What’s more, all indications are that this state of affairs will continue far into the future and reward those who invest in UK property for many years to come.
Looking for advice on the best places to invest in property? Contact our team today and find out about our latest opportunities as well as Opulent’s market-leading investment strategies by clicking here.
Securing your children’s future is one of the most important things any parent can do. One of the best ways to do that is by investing and creating a nest egg for them. The purpose of the investment may vary – the profits could be for university fees, a deposit for their first home or anything else – but the method and overall goal remains the same.
Investing in order to achieve any of the above is by nature a long-term process, and that makes property the perfect option. High returns, impressive stability and a long-term outlook are what characterises this class of investment. By building a property portfolio you can give your children invaluable insurance against whatever may come in the future.
Here are just some of the things to consider when investing in property to build a better future for your children:
Have a solid, long-term plan
More than any other type of investment, having a long-term plan is vital if you are investing in order to secure your children’s future in years or decades to come. Many property investors get into the market with the intention of capturing short-term capital appreciation and then exiting again once they have received their income.
If you are trying to secure your children’s future through property investment, this tactic cannot be the only aspect of your strategy. Instead, we would urge you to focus on more than only capital appreciation – instead, make sure that you pay a lot of attention to rental yields as well.
Your rental yield is the passive, monthly income that you will receive from a tenant in your property. Unlike capital appreciation, rental income is a steady, long-term source of funds that will allow you to pay off any mortgages you have and build up a nest egg – the ideal solution for your investment goals.
At Opulent, we specialise in helping you develop multi-year investment strategies which are bespoke and suited to your specific needs. Find out more about how we can help you by getting in touch today >>
Look for a property market where the fundamentals are sound
If you are investing for the long term and want the best chance of stable, secure profits for many years to come, it pays to find the markets where the underlying fundamentals are in your favour and likely to remain that way far into the future.
This means that you should look for places where there is a huge imbalance between supply and demand – this creates competition and demand which will keep pushing house prices upwards, and at the very least will maintain them at high levels to protect their value. For this reason, buying UK investment property is a smart move for anyone who wants to build a portfolio and secure their children’s future.
The UK Government estimates that as many as 345,000 new homes are required in the UK every year on top of the existing housing stock as the bare minimum to meet demand. In reality, an average of just 240,000 homes are being built each year, which means that the gap between supply and demand continues to increase every 12 months. Furthermore, it is estimated that the pace of building is only increasing at 1% a year – ensuring that the present situation which is so favourable to investors has no end in sight.
It is this sort of consideration that should be at the forefront of your mind as it creates the conditions that your plan needs in order to succeed.
Gift the property to your children at the appropriate time
In order to not load your children with Inheritance Tax – which will normally be set at 40% of the value of the asset – you should involve them in the property investment process at an early time you deem to be right.
By gifting your property as a Gift Without Reservation, which means that you cannot benefit from the property after it is gifted, you can set up what is called a Potentially Exempt Transfer (PET). This means that if you survive for seven years after the gift, no Inheritance Tax is payable on the property at all, ensuring that you can pass the majority of the value of your asset onto your children.
There will be Capital Gains Tax and Stamp Duty concerns if you use this method, but overall it is a good way of passing on your assets to your children in a way that avoids a large tax bill. An independent financial advisor can offer advice that suits your particular circumstances, and we would advise seeking one out if you are unsure.
Investment is one of the best ways to provide a better future for your children, and UK property is perfectly suited to the kind of long-term plan that this goal requires. By investing in the UK property market, you can help your children through university, gift them a deposit for their first home and so much more.
For advice and information on a long-term property investment strategy, get in touch with our experts today who will be more than happy to help you plan >>
The UK is the world’s number one property investment market. Investors from around the world have enjoyed for many years the combination of high short- and long-term returns and a level of security that simply cannot be found anywhere else in the world.
Whether you are looking to build a portfolio that will provide a secure income for many years, or are looking for more immediate capital appreciation, investing in UK property is the solution for you. To assist, we have put together a list of some of the most important things overseas investors need to know about investing in the UK.
Get the right location
The UK has a huge range of property market locations which all have their own characteristics. This is undoubtedly a strength of investing in the UK as it means that whatever your investment goals are, you will be able to find a property to suit.
Examples of regional variations include entry prices, rental yields and capital appreciation prospects – but we recommend you don’t get bogged down. If you follow the basic rules of investment then you will find the right location for you naturally.
The key, as always, is to work out where people are going and buy ahead of them – thereby making the most out of future demand and the fastest-rising house prices and rents. For example, the London Commuter Belt is a far better bet than Central London at the moment due to a population demographic change that is underway – the rise in home or remote working means that more people than ever are leaving the capital and moving to the outskirts which are more affordable and offer a different lifestyle. As such, Commuter Belt hotspots like Chatham, Uxbridge and Ashford are good bets for overseas property investors.
Can I get a mortgage in the UK as an overseas investor?
While many overseas investors prefer a cash purchase, there is also a huge range of mortgage products available which you can access even if you do not reside in the UK. While you are likely to need a larger than a standard deposit, it is possible to get mortgages fairly easily and this can allow you to grow your portfolio faster than if you rely purely on cash purchases.
The documentation you will need to proceed with a mortgage in the UK as an overseas buyer include:
Proof of funds
Proof of creditworthiness
Anti-money laundering documentation
A final thing to note is that mortgages for overseas buyers are generally not available on properties under the value of £150,000 – however, the average UK property price is now more than £267,000 according to Halifax, and it is unlikely that you will be able to find a premium investment property in the best markets for less than the £150,000 threshold.
As with all mortgages, if you are unsure we would always recommend talking to an independent mortgage advisor. Our team can put you in touch with an expert – if you require one, please get in touch today by clicking here.
Make sure you understand the property buying process
The first step when buying a property in the UK is to pay a holding deposit to secure your reservation. This will normally be approximately £5,000 and the developer or agent will not be able to guarantee your purchase until this is paid.
Following this, you will undertake the exchange of contracts. This process will normally need to be completed within 28 days of reservation and will involve the appointment of a solicitor who will confirm that the purchase is correct and that you can proceed safely. It is worth noting that if you are purchasing off-plan – before the property has been completed – then this exchange of contracts will normally require a further staged payment, the size of which varies. If you are buying an off-plan property, make sure that you are aware of the payment plan stages.
The stages of exchange are as follows:
The selling agent’s solicitors will send a contract to your solicitor
You will then be able to ask questions, and your solicitor will raise any queries with the selling agent
When you are satisfied, you will sign the contract and pay any monies due on exchange
Following this, the purchase becomes legally binding
As an overseas buyer, you will need to provide your solicitor with some information at this stage, including:
Proof of address
Proof of funds
Following this, you will have to pay the remaining funds at the appropriate time. For example, if you are buying off-plan then you may have a 10-day deadline following the completion of the property and the handover of keys. Ensure that you are clear on the details of this before proceeding with your initial reservation.
We recommend that you consult with an independent financial advisor if you are unsure at any point or require additional advice before reserving a property.
What are the tax considerations for overseas property investors in the UK?
As an investor in UK property, you will have to pay tax at various points in the process. The most notable ones are:
Income Tax – This is a compulsory tax paid on all of the rental returns you make from a property based in the UK. The rate goes from a basic 20% to a maximum of 45% depending on how much income to receive through the Non-Resident Landlord Scheme (see more below). If you do not reside in the UK, you will have to pay income tax at the rate in your home country.
Stamp Duty – Stamp Duty Land Tax is a compulsory tax payable on all properties over £125,000. The amount of tax depends on the value of the property and increases on a sliding scale. As a foreign investor, you will be required to pay a 3% Stamp Duty surcharge on your purchase, though it is worth noting that this additional 3% is likely to be wiped out within a year by your profits.
Capital Gains – This is a compulsory tax paid on the sale of your property and is based on how much profit you make over the original sales price.
We recommend that you consult with an independent financial advisor if you are unsure at any point or require additional advice regarding taxation.
Non-Resident Landlord Scheme
The Non-Resident Landlord Scheme is how HMRC collects taxable income from landlords who spend most of their year (more than six months) living overseas. If you qualify for the scheme, you are required to sign up for it.
Being part of the scheme means that landlords can receive their full rent without an immediate deduction of basic rate income tax. You are still obliged to pay this tax, but if you are signed up to the scheme you can do so through a self-assessment at a later date.
If you are not part of the Non-Resident Landlord Scheme, you will have the basic rate of income tax (20%) deducted immediately from your rent.
For more information about the Non-Resident Landlord Scheme, click here.
The above is our list of the most important things that overseas landlords need to know before investing in UK property. For more information about becoming an overseas investor, contact our team today by clicking here and we will be more than happy to advise you on the best investment strategies >>
As we approach the final quarter of 2021, it is a good time to reflect on a challenging year and begin to look ahead at 2022. The market has changed in many ways over the last 18 months, leaving investors to wonder where the best UK hotspots for property investment in 2022 can be found. A leading candidate is the London Commuter Belt which is benefitting from a whole range of circumstances which make it one of the UK’s strongest buy to let property markets.
One of the most significant population trends in the UK is the so-called “London exodus”, where people have been swapping life in the capital for alternatives elsewhere. It has been underway for several years now, and the Coronavirus pandemic appears to have accelerated the trend, to the point where a report from PricewaterhouseCoopers has predicted that London’s population could decrease by as much as 300,000 in the coming years.
The latest reports from local experts in London show that almost 50,000 people left London in the first half of 2021. The reports go on to show that the vast majority of these people (92%) did not go far, ending up in London Commuter Belt towns. A major driver of this exodus is the rise of hybrid working. As that intensifies, we expect to see this trend continue, and the population of Commuter Belt towns increase concurrently.
However, it has become apparent that there simply are not enough homes in the Commuter Belt to satisfy all these new arrivals. 87% of Commuter Belt agents surveyed by Savills report that their available stock has decreased in recent months – an unprecedented number, especially given the existing undersupply issues in the Commuter Belt. This is going to have a major impact on the property and investment market.
Rents in the Commuter Belt have already hit their highest levels of annual growth since 2007, according to the latest quarterly residential analysis from Savills. Q2 2021 saw rental growth of 2.5% in the Commuter Belt, which resulted in huge annual rental growth of 7.2% in the year up to July 2021 – a figure which is unmatched elsewhere in the country.
This rental growth likely has two main causes. The first is the rise of hybrid working during the Coronavirus pandemic which forced many companies to rethink their working practices and allow more home working. This has lessened the demand for Central London property and made living in places like the Commuter Belt more viable.
The second factor is the growing group described as “accidental renters”, a term which refers to those who are looking to buy but have not been able to due to the overall lack of stock in the most desirable areas, and many of them have landed in the Commuter Belt. Until stock levels increase, we can expect to see these “accidental renters” become more permanent figures on the Commuter Belt rental landscape.
Jessica Tomlinson, Research Analyst at Savills, said: “Across the commuter belt, we’ve also begun to see a change in priorities with people seeking to be closer to transport links and lifestyle amenities in town and city centres, in contrast to the flight to country properties in village and rural locations seen throughout last year”
This lack of supply is also set to push house prices up in the London Commuter Belt. When Savills upgraded its residential forecasts earlier this year, it initially looked like very good news for the Prime London market which is now predicted to see house price growth of 14.6% over the next five years.
However, it is even better news for the Commuter Belt where the forecasts are predicting growth as high as 21.6% over the same time period. It seems clear that it is not just high rental returns that investors can expect in the Commuter Belt – it is also strong capital appreciation.
“Buyer commitment to moving remains strong and longer-term adaptations to home working will benefit London’s wider commuter zone,” said Frances Clacy, Associate Director at Savills.
When looking to invest in UK property in 2022 it is vital to research current market trends and be aware that they are likely to have changed over the past year. The rise of the Commuter Belt as an alternative to London is one of these trends, and buying property in the London Commuter Belt is likely to be a very good investment in 2022.
To buy London Commuter Belt property and find out more about our available opportunities, get in touch with our team today for more information.
Stamp Duty Land Tax (SDLT) is a tax levied when you purchase a residential property in the UK over a certain value. The amount you pay is defined by the overall value of the property and is calculated based on increasing portions of that overall price.
During the initial phases of the Coronavirus pandemic, a Stamp Duty holiday was introduced by the government to stimulate demand and give the housing market a welcome boost. This holiday took the form of a temporary reform to Stamp Duty rates and saved buyers £15,000 on a purchase which goes up to the tax-free limit. This gave buyers confidence and supported the growth of the market even through the most challenging of times.
In the period up to the 30th June 2021, buyers would pay no Stamp Duty at all on property valued up to £500,000. This is now being tapered off with steadily reducing tax relief rates until the end of September, when Stamp Duty will return to pre-pandemic levels.
Until 1st October, the Stamp Duty rates due on UK property are as follows:
Property or lease premium or transfer value
Up to £250,000
The next £675,000 (the portion from £250,001 to £925,000)
The next £575,000 (the portion from £925,001 to £1.5 million)
The remaining amount (the portion above £1.5 million)
For example, if in August 2021 you buy a house for £275,000, the SDLT you owe will be calculated as follows:
0% on the first £250,000 = £0
5% on the remaining £25,000 = £1,250
Total SDLT = £1,250
The same purchase after the holiday ends will cost the buyer £3,750 in Stamp Duty costs once the rates return to normal:
0% on the first £125,000 = £0
2% on the next £125,000 = £2,500
5% on the remaining £25,000 = £1,250
Total SDLT = £3,750
Additionally, buy to let investors face an additional Stamp Duty levy of 3% on top of the regular rate when they purchase an additional property to let out to a tenant. With this in mind, what does this mean for investors in the future when the Stamp Duty holiday ends?
The short answer is: investors should not be put off by a small rise in Stamp Duty.
By focussing on a slightly increased initial cost, investors will miss the far more significant returns that are on offer. As mentioned previously, the Stamp Duty holiday was put in place to give people confidence and increase demand for housing – and it worked exactly as intended.
That increased demand is the key point to bear in mind, as a spike in demand means that house prices are going up and the capital appreciation on offer is increasing. A quick look at the statistics confirms this.
According to the Office for National Statistics and the Land Registry, as reported by the BBC, the average UK house price increased by 10.2% over the year first year that the Stamp Duty holiday was in place – the fastest annual rate of growth for 14 years. Needless to say, that rise in property prices is more than enough to counteract any additional Stamp Duty fees incurred when the tax rate returns to its pre-pandemic level.
But will this growth continue? Again, the news for investors is positive. All indications are that the UK residential market will continue to boom in the coming years thanks to a lack of available supply, low interest rates and schemes like Help to Buy which are designed to further boost demand.
Consequently, Savills has upgraded its forecasts for the coming years as of August 2021 and is now predicting even higher levels of growth than it had previously. The firm projects the UK’s prime housing markets will grow 9.0% in 2021 and 21.5% by 2025, reflecting a year of robust house price growth.
The Stamp Duty holiday played a major role in ensuring the continued health of a thriving property market. As the tax relief programme is gradually wound down, with the return to pre-pandemic rates in October 2021, it means that investors will return to paying slightly more up front, but in a favourable housing market where the overall profits have grown enormously – and are set to continue doing so in the years to come.
Buy to let investment is a medium- to long-term prospect at its best, and investors should be encouraged by the effects of the Stamp Duty holiday on their portfolios. This is an ideal time to invest in UK property and our team are ready and waiting to advise and assist you in your next investment – get in touch today to find out more about our outstanding buy to let opportunities in the UK’s most profitable markets >> https://www.opulentinvest.com/contact-us/
Over the last 18 months, the UK housing market has performed more strongly than ever in spite of the Coronavirus pandemic. This was due in part thanks to a Stamp Duty Land Tax (SDLT) holiday announced by the Treasury which was introduced in June 2020.
During this holiday period, buyers were exempt from paying Stamp Duty on properties up to the value of £500,000 and could save up to £15,000 on their purchase. The scheme is now tapering off and will end entirely in September, with the savings on offer gradually declining up to that time. From 1st October 2021, the nil-rate price band for SDLT will return to properties worth £125,001 and under.
The SDLT holiday significantly boosted demand at a difficult time for the housing market, maintaining the growth we had seen in previous years. In fact, as the holiday went on, the savings in SDLT increased demand significantly and actually increased the pace of house price growth even further.
So, what does the housing market look like now we are in the final stages of the SDLT holiday, and what is the outlook over the rest of 2021?
The run-up to the end of June 2021 – when the most significant drop off in available SDLT savings occurred – saw a rush for new properties as many people tried to get their purchases over the line before that date. This led to a small decline in completions in July as there was a pause for breath. However, this appeared to have little impact on house price growth in the UK.
While it is true that new figures from Halifax showed that year-on-year house price growth fell by 1.3% in July, it must be borne in mind that this was a fall from the historically high levels caused by the bottleneck ahead of the June cut-off date for the biggest SDLT savings. The average UK house price is still 7.4% higher than it was a year ago – and this level of growth is still extremely high.
Russell Galley, Managing Director of Halifax, said: "This easing was somewhat expected, given the strength of price inflation seen last summer, as the market began its recovery from the first lockdown and with activity supported by the start of the stamp duty holiday."
Supporting this, he notes that the number of available homes for sale has decreased and that this will spur demand further once again in coming months: "This general lack of supply should help to support prices in the near-term, as will the exceptionally low cost of borrowing and continued strong customer demand."
It is this lack of supply that is continuing to fuel sky-high demand and will push prices upwards further throughout 2021, into 2022 and beyond.
The latest figures from Zoopla offer serious encouragement, noting that demand is currently twice as high as it typically is at this time of year, and sales agreed are 22% above the annual average from recent years. For example, demand for new properties in the London commuter belt has increased by 86% compared to the 2017-19 levels. This is likely due to the increase in hybrid working and will put a premium on new build developments near London, making this the ideal time to invest in the London commuter belt.
Simon Rubinsohn, Chief Economist at the Royal Institution of Chartered Surveyors, confirmed this, stating: "Although the tapering in stamp duty is beginning to have some impact on RICS activity indicators, the overall tone to the market remains firm with the metrics capturing price expectations showing few signs of wavering.”
With the SDLT holiday ending, this is an ideal time to invest in property and take advantage of the upcoming growth that is projected for 2021 and 2022 as demand grows.
Get in touch with our team today for more information about our high return investment opportunities >> https://www.opulentinvest.com/contact-us/
What impact did Brexit really have on the UK property market?
It has been more than five years since the referendum on the UK’s membership of the European Union (EU) and the concerns about Brexit have rarely left the news in that time. Even today, no one can be completely certain about what the long-term effects will be. UK residential property is one sector which has been the subject of particularly intense scrutiny, with many wondering what effect Brexit will have on the market.
People were justifiably concerned about house prices falling in the run up to the referendum – not least the Chancellor of the time, George Osborne, who warned the nation that voting to leave the EU could send house prices tumbling by as much as 18%.
The theory was that nobody knew what they were voting for, and that the uncertainty and many unknowns would lead to a catastrophe as people simply stopped spending money on big ticket items like property. The terms of any future deal were not even vaguely defined at that point, and hard times were seen on the horizon.
The National Association of Estate Agents was one such voice predicting difficulties ahead, with its Managing Director Mark Hayward stating in 2016: “As a result of the vote for a Brexit, we expect international investors to look a lot harder at the UK as a potential market to buy in and this will have a knock-on effect on the house building sector, as investments may be delayed or put off completely”.
However, these fears would turn out to be unfounded. Indeed, the UK property market has only gone from strength-to-strength since the Brexit process began and there is no sign of the good times slowing down in the future.
Figures from the Office for National Statistics demonstrate in black and white how the market has grown in the last five years. The government body reported that the average UK house price was £212,887 in June 2016, the month of the referendum. By May 2021 (the latest figures available), the average UK house price had risen to £255,000.
While the initial concerns about economic insecurity causing a fall in house prices were valid at the time, it is clear with hindsight that it was this very uncertainty which made UK property more appealing than ever before.
Property is seen as a safe port in a storm, a tangible investment that is more likely to hold its value in the long-term than alternatives like stocks and shares. During periods of economic transition, there is no safer bet than property – a fact which is true for both homeowners and buy to let investors.
At the same time, the UK’s imbalance between supply and demand has continued to become more severe. Every year, the deficit between the number of homes needed and the number actually built grows by a further 100,000 homes according to the latest government figures. The National Housing Federation has stated that at least 340,000 new homes are needed a year until 2031, but current rates of housebuilding get nowhere near that figure.
That creates a huge level of demand which is pushing house prices up and has contributed to UK property becoming an even more appealing prospect in an uncertain post-Brexit economy. Combine that with a historically low interest rate of 0.1% from the Bank of England and you get a reliable, appreciating asset in an economic environment where you can borrow cheaply.
The cumulative positive effects of Brexit on the housing market are set to continue into the future as well. The latest Residential Forecast from Savills shows that further house price inflation of 21.5% is expected across the UK by 2025, with regions such as the North West expecting growth as high as 28% over that same period. Why not take a look at our Manchester properties.
The UK property market has defied Brexit uncertainty and continued to flourish, with conditions perfect for even more growth in the future. Get in touch with our team today for more information about our high-yielding UK property opportunities.
Investment Properties in the UK are aggressively marketed for sale across many different outlets. However, you need to know where to look and what to look for to find a successful investment property for sale.
Finding Investment property for sale and checking them includes a checklist and a plan. It is also important to spend some time evaluating both the negative and positive aspects of an investment property before you leave with your hard-earned cash. Invest In Buy To Let is quite sure that any property that passes their stringent standards will overcome the test of time and hence, be proved to be good investments after due diligence on any opportunity they obtain.
Investment property for sale is often viewed by others as a property in need of renovation. However, Investment In Buy To Let points out that by buying right, a buyer will make a greater amount of money compared to a refurbishment project. The inference is that if you're ever looking for a saleable investment property, simply contact Invest In Buy To Let.
Invest In Buy To Let recommend focussing emphasis on the word "investment" when looking for investment property for sale. We urge buyers to be owners, not landlords. As an investor means you can scale up as a landlord takes on a new full-time job of property and problems management.
Criteria that define a successful investment property for sale are based on how trouble-free the investment in the property is, how much hands you would be on, how much return you can earn on that investment and the risk factors involved.
The best advice we can give is to leave it to the experts of investment properties in the UK to find the right investment opportunities for you. Follow your plan once the opportunity is within your grasp, but you don’t need to take endless time to search for the best deal. Purchasing any property in the UK usually is a safe deal, according to the investors.
By far the best way to consistently build wealth and attain financial freedom is through real estate investments. As opposed to some risky ventures like stocks, futures or options, investing in real estate is a far safer investment choice, provided you are equipped with the correct strategies to help expand your wealth. While it's easy to get lost in the overabundant options of real estate investment, decisions should rest on prevailing market conditions which are ever changing.
Set out clear goals
Before you start doing research for your first property investment, be clear about what outcome you are expecting from your investment in the UK. Once goals are clearly defined then it becomes simpler to align each investment toward accomplishing them. Goal setting facilitates the ability to wisely choose the type of property to invest in, the manner in which to finance it and management of the real estate investments.
Gain adequate knowledge
Self-education is another major element of building up wealth in real estate. Investors need to take time to educate themselves about real estate. Increasing your knowledge base will not only boost your confidence but it also serves to equip you to suitably adapt to shifting circumstances in the industry. With enough up-to-date knowledge, in time investors can get far ahead of their competitors.
Avoid haphazard Real Estate Investments
Those who are first starting out in real estate are like to feel overwhelmed by the range of options that the industry offers for making money.
It’s advisable to learn the ropes by starting small. The ideal way to approach it would be to choose one strategy at a time and remain focused on it. Once you have more experience in the field and have mastered multiple strategies it will be easier for you to diversify.
Invest in Properties with Potential for High Appreciation
Real estate appreciation refers to the phenomenon when an investment property rises in value. When you find investment property for sale that has a high potential for appreciation, then you will be able to charge higher rent while still drawing in many tenants. It would also prove highly profitable for those investors who decide to sell.
Investing in growing markets is an ideal way to make sure that an investment property appreciates. A few top growth indicators would be population growth, future development plans in the area and the job market potential of the area.
Despite the capital-intensive nature of real estate investments, investors do not need to utilize their own money. Using leverage is a well known strategy while purchasing investment property. Securing leverage simply entails borrowing capital, for instance, mortgage loans, to fund your investment and then covering loan payments in installments. Essentially, your tenant occupying the property you have invested in will be indirectly paying down the loan for you.
When it comes to property investment, beginner investors are the ones who make the most mistakes. This occurs as they have not yet gained the experience to circumvent such pitfalls. Often mistakes that are made early on result in investors discontinuing further investments and losing out on building their wealth.
Undefined investment objectives
You would need to be particular before you start investing. Understand precisely why you are making an investment, and the time range of the investment. Some important questions to be asked:
Do I want to gain income benefits now or in the future?
Do I prefer a cheaper option like student investment property?
Do I intend on selling properties before I retire?
Do I want to try and build a property portfolio to support me after retirement?
Performing incorrect due diligence
In circumstances where due diligence is done improperly, it is likely that you may have paid the wrong price or even bought the wrong property.
Before you make your property investment, you should do research on where to invest and what type of property to buy. After that you would need to figure out the cash flow and be secure that the property you have invested in will gain you expected returns.
Receiving low financing
Using a mortgage to fund investment in property allows you to invest with borrowed money. Ideally it serves to immensely boost your returns and yield on your initial deposit (capital investment). Nonetheless, if you receive improper financing you may not see returns on your investment.
It is advisable to use an experienced property investment company as they would be knowledgeable about the market and help you dodge crippling financing pitfalls.
Inferior financial management
If you have invested in property you will be drawing income from rent and incurring expenses in the form of mortgage, repairs, investment property management charges, maintenance and so on. In some cases you may incur taxes as well. If your property investment finances are managed incorrectly you may be faced with subsidizing your mortgage from your personal funds. You should always anticipate your cash flow and keep aside some reserve or emergency capital.
The advantages of investing in property are plentiful. Investment in Property when done right is a lucrative means of building your equity and wealth. Here are some compelling reasons why you should go ahead and invest in property.
You are In Charge
Whether it’s deciding the specific property you want to invest in or the way in which the property is managed right up to which tenant to rent to and the amount of rent you want to charge, as a property investor, you hold all the cards.
A number of investors choose to have a highly active role and manage their assets themselves. With full-time jobs occupying their time, other investors depend on investment companies to handle their assets. These companies look after various aspects, from narrowing down on prime property to picking the right tenants and managing the routine repairs and maintenance.
A Source of Income
Property investments gain you returns in the form of cash flow and capital appreciation. While cash flow is the revenue you generate monthly in terms of rent, capital appreciation is the increase in your property’s value itself. If you work toward appreciating the value of your property over time as well as invest prudently, you can safely expect a comfortable monthly income.
It acts as Leverage
Investment in Property gives you the advantage of securing leverage, a mortgage or a loan which in turn allows you to boost your original investment. Take an investment in shares, for instance, it would be unlikely that banks would give you a loan to expand your investment.
Safeguard from Inflation
Investment in Property is a highly desirable way of keeping yourself protected against inflation. When inflation is high your property value and income from rent would see a considerable increase. Your cash flow will go up in proportion to the cost of living.
Enhance the Value of the Investment
Unlike stocks, futures or options, once you invest capital into your property you see a significant increase in value of your investment. With a little creativity and wise spending you could receive significantly more than you invested.
Expand Equity and Wealth
You keep increasing your equity as and when you pay down your property mortgage. This forms an asset that gets added to your net worth. As your equity keeps expanding you gain higher leverage to invest in additional properties, which results in a higher amount of cash flow and overall wealth.
So, once you’ve looked through investment property for sale and have done thorough research you can be well on your way to investing in prime property that will reap you above average returns for years to come.