The UK property investment landscape is strong yet varied, and the current climate means there may be additional factors to consider.
With recent research from Hamptons showing incredibly strong appetite from buy-to-let landlords in the UK housing market, it seems that, despite rising prices – or even because of them – people are keen to get onto the property investment ladder.
The UK has a famously strong housing sector for investors, which has historically been centred around London. Overseas investors, while still targeting the capital, are increasingly spreading their search across the rest of the country, too, to attain higher yields and better capital appreciation prospects.
Saif Derzi, head of SDGB Properties, has worked with specialist lender Together to expand his property portfolio in the UK. Through his experience, he has come up with some tips on how to invest in the year ahead.
1. Find the right area
While this is, of course, the most obvious point, it has never been more important to choose the right location. Areas in the north of England and the Midlands, for example, are regularly being 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 area. What are buyers and renters in that area looking for? How much are they willing to spend? Talking to an estate or letting agent is a good place to start.”
2. Seek opportunities cautiously
Getting your hands on a bargain might be appealing at first, but Derzi advises caution. Things to look for in terms of adding value include unused loft spaces, large gardens that can be sold, and empty outbuildings.
Structural issues are something to be very wary of, though, Derzi warns. “If the property does have some complex problems, that doesn’t mean you can’t proceed. It just means you need to make sure it’s factored into the price you’re paying, and your renovation budget.”
3. Keep projects close
One option for buyers seeking a property investment opportunity is to opt for something that is ready to move into, to start generating an income from day one, such as a new-build. However, for those who choose a project, buying one within easy driving distance is advised.
Derzi says: “Even if you’re employing a site manager and contractors to carry out the work, being able to regularly visit will help you ensure that everything is going to plan and is meeting your expectations.
“If you’re familiar with an area because it’s local that’s a bonus as you’ll probably have a better understanding of its amenities and most desirable streets.”
4. Choose the right type of property investment
The UK rental market is seeing huge demand right now, which doesn’t look set to taper any time soon. Many buy-to-let landlords are seeing reduced void periods and increased returns as a result, making it an ideal time to invest in this field.
However, not every investor wants to be a buy-to-let landlord, so some will prefer the buy-to-sell route. If you’re looking to buy and then sell for a profit, you generally need to purchase a property that needs work, before making the necessary renovations and putting back on the market.
Of course, there is risk involved in this process. Derzi notes: “It’s a good idea not to take on too much if this will be your first project.”
5. Find the right lender
There are a wealth of funding options available for property investors right now, with the number of specialist 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 run down and has little value, you might find it harder to get a mortgage that would cover the renovation costs. A bridging loan or development finance, only available via specialist lenders like Together, could quickly help you in this situation.”
BuyAssociation works directly with developers across the UK to help property investors find their ideal opportunity. Browse a selection of our available properties, or get in touch for more information.
