The property investment landscape in the UK is strong but varied, and the current climate means there may be additional factors to consider.
With recent research from Hamptons showing an incredibly strong appetite from owners buying to rent in the UK housing market, it seems that despite rising prices – or even because of them – people are keen to move up on the scale of real estate investment.
The UK has a well-known housing sector for investors, which has always been centered around London. Foreign investors, while still targeting capital, are increasingly extending their search to the rest of the country, too, for higher returns and better prospects for capital appreciation.
Saif Derzi, head of SDGB Properties, has worked with specialist lender Together to expand his property portfolio in the UK. Through his experience, he found some advice on how to invest in the coming year.
1. Find the right place
Although this is, of course, the most obvious point, choosing the right location has never been more important. Areas in the North of England and the Midlands, for example, are regularly ranked considerably higher than many parts of London and the South in terms of investability.
Derzi says, “Do your research to find out exactly what the market is like in your chosen region. What are buyers and tenants looking for in this region? How much are they willing to spend? Talking to a real estate or rental agent is a good place to start. »
2. Look for opportunities carefully
Getting your hands on a bargain can be appealing at first, but Derzi advises caution. Things to look for in terms of added value include unused loft space, large gardens that can be sold, and empty outbuildings.
Structural problems are something to be wary of, however, warns Derzi. “If the property has complex issues, that doesn’t mean you can’t continue. It just means that you need to make sure this is factored into the price you pay and your renovation budget.
3. Keep projects close
One option for buyers looking for a real estate investment opportunity is to go for something that is move-in ready, to start generating income from day one, such as a new build. However, for those who choose a project, it is advisable to buy one within a short drive.
Derzi says, “Even if you employ a site manager and contractors to carry out the work, being able to make regular visits will help ensure that everything is going according to plan and meeting your expectations.
“If you know a neighborhood because it’s local, that’s a bonus because you’ll likely have a better understanding of its amenities and the most popular streets.”
4. Choose the right type of real estate investment
The UK rental market is experiencing huge demand at the moment, which is not expected to diminish any time soon. Many rental owners are seeing their empty periods reduced and their returns increased, making this a great time to invest in this area.
However, not all investors want to be buy-to-let landlords, so some will prefer the buy-to-sell route. If you want to buy and then resell for a profit, you usually have to buy a property that needs work, before doing the necessary renovations and putting it back on the market.
Of course, this process involves risks. Derzi notes: “IIt’s a good idea not to take on too much if this is your first project.
5. Find the right lender
There are a multitude of financing options available to property investors at the moment, with the number of specialty lenders and those offering buy-to-let mortgage deals on the rise. Some options include bridging loans, for example, which Derzi explains:
“Often, if a property is dilapidated and has little value, it can be more difficult to obtain a mortgage loan which would cover the costs of renovation. A bridging loan or development finance, only available through specialist lenders like Wholecould quickly help you in this situation.
BuyAssociation works directly with developers across the UK to help property investors find their perfect opportunity. Browse a selection of our available properties or contact us for more information.