When it comes to investments, the property market in the UK is becoming more appealing to investors, who see the potential in it. With certain UK cities offering some of the best rental yields and most attractive prospects when it comes to capital growth, investing in property, whether student or residential, can definitely be worthwhile. Take a look at these things you should know and consider before taking the next step towards investing in property in the UK.
Research the best locations
Whilst UK property can provide a lucrative and fulfilling venture, not every city in the UK is able to offer the same prospects. It is important to spend some time researching which cities and towns have the best yields, demand, prices and capital appreciation.
In 2018, Northern Powerhouse cities Liverpool and Manchester have quickly made a name for themselves as hotspots for property investment. These cities have some of the highest rental yields in the country, with Liverpool averaging 5%, whilst Manchester boasts highs of 5.5% on average. Properties in these cities are a lot more affordable on average than in Southern cities like London. A house in Liverpool, for example, costs £130,67 on average, compared to a hefty £484,173 in London. RW Invest is one property company that understands the potential behind Liverpool and Manchester compared to London, with a range of brilliant investment opportunities with yields as high as 8% and 9%.
Not only are the rental yields and costs better up North, but there’s also lots of potential for capital growth, with a number of regeneration projects in store. The Northern Powerhouse is an initiative that aims to boost the economy of the key cities of the North by improving things like quality of life, transport, and education. In Liverpool, plenty of regeneration plans are in store, such as a proposed £5.5 billion transformation of the Liverpool waterfront, whilst Manchester will see the development of a new neighbourhood ‘St John’s’. These projects will not only bring new interest to these cities, but they’ll also create multiple new jobs, housing, and attractions for those living in the city.
Decide on your property type
Once you’ve decided which area you’d like to invest in, you’ll need to think about the target market you wish to attract with your property type. Student property is a popular investment in the UK, with the purpose-built student accommodation market having an estimated worth of £45.8 billion. One of the reasons student property is so appealing for investors is the demand behind it, with student populations in cities like Manchester and Liverpool surpassing the existing accommodation available. Manchester and Liverpool have a combined student population of around 155,000 students, whilst the whole of the UK welcomes a large number of overseas students, bringing in around 450,000 international students as a whole during the academic year of 2016/17.
Residential properties are another popular option when investing in the UK, with city centre apartments, in particular, being highly in demand with young professionals in major cities. Students and young professionals alike are keen to rent properties with high-end, luxury designs that are based in convenient locations, close by to their place of work and the city’s attractions and nightlife.
Understand the legal and financial issues
If you’ve never invested in UK property before, it’s a good idea to spend some time getting clued up on the financial and legal issues involved. It might be worth hiring a solicitor to discuss everything involved with a buy-to-let investment and get help with certain areas such as the creation of a good tenancy agreement. Financial issues you should know about include the potential stamp duty tax you’ll need to pay, along with any details relating to your buy-to-let mortgage.
