Are you keen to invest in residential property in the UK? Ideally you’re a UK resident and you’ve got your family home. Investing in property is a great way to build up wealth when you buy and hold property. This is a long-term strategy where the properties go up in value over the years you own them.
Property investing is not risk-free so it’s recommended to have investing goals and study the property market in your country. If you’re UK, then you’ll need to know what’s happening economically and politically there. Fluctuations in business confidence are caused by events like Brexit, and the Ukraine War.
Homeowners and prospective home buyers need to know their income stream is safe. The stability of their income and future prospects determines whether it’s a buyer’s or a seller’s market.
There’s a lot of information property investors need to know about the market and also about their own financial position and how they can fund property purchases.
Property Investing Is A Business
Additionally, property investment needs to be operated as a business i.e., it needs to be profitable. The revenue from renting properties must exceed all outgoings. The investor needs to know what the revenue (weekly rent) will be and the outgoings (mortgage interest, specific landlord insurance, maintenance, and so on) before signing the sale and purchase agreement so they know if the acquisition is a worthwhile asset that will return a profit.
The list of must-knows for a landlord goes on, including an in-depth analysis of areas of interest to invest in. Why? Well buying a property is a big ticket item and to make the numbers work i.e. for the property to return a profit, it will need to be tenanted for no less than 48 weeks of the year. Rental properties must be in sought-after locations, near transport, infrastructure, shops, entertainment, and schools to appeal to a wider target audience. Therefore vacancy is much lower and rental returns higher.
Consequently, we’ve found some of the preferred areas to invest in the UK property market. One will surprise you as it is London.
When you think of London real estate, you immediately think – expensive! Well, not everywhere, and there are many types of property to choose from, with some like units and apartments more affordable in some locations. East London has been up and coming for a few years with new developments, trendy eateries, and entertainment. Hendon and Wembley have also seen an uptick in development, drawing in many first-home buyers to its new apartments.
If you’ve got access to large amounts of funding, you may look at premium locations like Richmond. Its property has gone up 65% in the last 10 years. However, remember investing in property is a numbers game. Buy below market value, renovate to achieve the highest rental yield, and sell at the top of the market – i.e., when it’s a seller’s market.
Liverpool hasn’t always had the best reputation. However, in recent years it’s seen a lot of investment in infrastructure and development, including upgrades of notable buildings boosting the prospects of the city at large. Anyone living here is guaranteed a good quality of life, which means it’s a highly viable area to invest in the UK property market.
There’s also the case that property prices haven’t completely recovered from the heavy hits of 2008. Consequently, you can likely find a more affordable range of larger homes here for your investments, so Liverpool is certainly an area to explore here.
Manchester is rife with tenant demand, so if you’re particularly keen to become a landlord or landlady, look no further than Manchester! The city is full of things to do and also, a stimulating urban environment for the young and old alike. There’s theatre, restaurants, parks, sports arenas, and gyms; it’s all here!
There’s also great potential for transport, with links to just about everywhere in the UK. Manchester has a certain buzz stemming from a vibrant social scene, an electric culture, and a booming job market; perfect for all your smaller housing investments so the young can pile in! Moreover, some would argue it’s far more affordable than London but offers much of the same magic.
They don’t call it the UK’s second city for nothing. After all, house prices were rising fastest in the West Midlands as recently as last August, so this a fast-moving train to leap aboard. Like Manchester, there is a great deal to do here, and because it’s in the Midlands, train journeys in any direction are short and sweet.
There’s also a population growing steadily, which means there’ll be many more people looking for somewhere to call home in the next couple of decades!
However, you can get ahead of the curve and invest in Birmingham property well ahead of time. That way, you can ready yourself for the influx of new eventual tenants and more!
Property investors that invest in rental properties for the long term, make a profit. However, like any type of investment it’s not risk-free. Knowledge and experience of the best locations to invest in, plus a good grasp of what’s going on in the economy and other factors like political stability all play a role in the success of property investment.
The best places to invest in the property market in the UK tend to be the most active and stimulating cities. This is where clusters of young people gather looking to rent at affordable rates. London will always attract young adults and the university towns of Bristol and Leeds are safe locations too for the savyy investor.