There are many reasons why residential flats make a good investment option, and a new survey has revealed that they are the asset class investors are most interested in.
The UK property market has an extremely wide range of different investment types and sectors to get involved in. From commercial property to student accommodation, and from social housing to development and off-plan properties, each asset comes with its own pros and cons.
In a recent survey by Handelsbanken looking at property investor preferences for the 12 months ahead, almost two thirds (63%) of respondents said that they are likely to invest in residential flats, making it the most popular choice at the moment compared with other property types.
It was followed by commercial offices with 62% of the vote, and residential houses at 61.5%. What’s more the residential flats space has seen a huge surge in popularity when comparing the results with this time last year, when only 53% of respondents said that was the sector they would invest in.
A year ago, 58% were leaning towards commercial property investment instead, while residential housing was attracting 46% of investors.
The sectors that are not piquing the interest of investors at the moment are residential park homes at the bottom of the pack with 32%, followed by student housing with 49.5%m and commercial retail with 50.5%.
Andy McCabe, Handelsbanken district head, East of England said: “Our latest report highlights the true breadth and depth of investor appetite across the UK’s varied regions and property sectors.”
The perks of residential flats for investors
The UK housing market as a whole has long since been an extremely popular place to invest, and historically house prices have risen relatively continuously for decades. Ten years ago in December, the average house price in the UK was around £189,000 according to Halifax – now, it is around £100,000 more at around £289,000.
Across the various property types, from small residential flats to larger houses, there have been individual fluctuations, but overall they have followed a similar pattern.
Residential flats have tended to fall more in favour during certain conditions, and at the moment there is particular interest in them due to people looking to reduce their costs. For the property investor, a flat tends to be cheaper than a house in the same location, while for the tenant, it is cheaper to rent and cheaper to run.
It is also possible to invest in a flat in a more desirable location, due to the fact that sought after locations in city centres tend to be populated by flats. If they are located within walking distance to local amenities, transport links and places of work, they can be an ideal buy-to-let with strong tenant demand.
You may also be more likely to appeal to a wider range of tenants with a residential flat rather than a house, as the typical demographic of renters tends to be younger generations who are seeking a smaller space that they can afford, in a good location.
How to invest
At BuyAssociation, our team of consultants works closely with established and well-respected developers across the UK, helping investors to purchase residential flats and houses – including both completed properties and units, and off-plan developments – tailored to their needs.
When buying off-plan, investors can save money by securing a better price direct from the developer, compared with the final sale price once the property has been built. This can boost the final return on investment, allowing buyers to maximise their portfolios.
We can secure exclusive discounts for our clients who invest at the earliest stages of development, ensuring that our investors get the maximum benefits from their purchase.
If you’d like to find out more about our investment opportunities, or learn more about how we work, get in touch today.
