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UK is the place to buy property to rent out 2012 looks like the year when a number of market trends are coming together to make investing in UK buy to let a great option.
Firstly, the economic squeeze is pushing more and more UK people into renting rather than buying property. In fact, the country seems to be headed towards the rest of Europe where renting is far more common.
Secondly, more repossessed properties are being sold by Banks, offering the opportunity to snap up a bargain. Not easy in the UK where there is a large investor community and property is considered a traditional safe haven.
And lastly, huge population pressure. The latest UK population figures released in October 2011 make for startling reading. The UK's "Offical" population is now 62.3 million and is set to continue to rise sharply. Here’s what the BBC said on 26th October, 2011:
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The population of the UK is on course to reach 70 million over the next 16 years, official figures suggest.
The Office for National Statistics (ONS) said the UK's population is set to rise from 62.3 million in 2010 to 67.2 million by 2020 and 73.2 million by 2035.
It says just over two-thirds of the projected increase from 2010 to 2035 is either directly or indirectly due to migration.
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And this is only recording those who fill in a census form. The real figure will be higher. Making the UK one of the most crowded countries on earth. This is great for property prices and letting.
Add to this the very strict planning rules in the UK and there’s a recipe for acute shortage of accommodation that is likely to only get worse.
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No wonder The Express newspaper's front page on 1st November, 2011, stated:
HOUSE prices soared by almost £2,000 last month as the property market defied gloomy predictions with a welcome recovery.
And Peter Rollings, chief executive of estate agent Marsh & Parsons, said: "The housing market has defied the economic gloom in recent months.
"Low interest rates have been pivotal in bolstering home values, while the re-emergence of 90 per cent loan-to-value mortgages has helped offset buyers concerns somewhat about the direction of the wider economy.
Peter Rollings, chief executive of estate agent Marsh & Parsons, said:
"With rents at record highs across much of the country, buying a home makes excellent financial sense to those who can secure mortgage finance.
"Long-term investors and homeowners have seen the greatest financial benefits of buying property."
He added: "Even accounting for the housing market down-turn, the average homeowner has seen their home increase in value by 75 per cent in the past 10 years.
"As long as the UK's population growth outstrips the supply of new homes, demand for property will mean homeowners will see strong long-term capital appreciation, and investment in bricks and mortar will remain a sound bet."
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The time to buy is now
Don't pay much attention to the doomsters who say property isn't the place to be right now, with wobbles in the Euro zone etc.... what's wrong with buying a low priced product that is desperately needed by more and more people? And note the word "needed". People need a roof over their head, particularly in cold and wet UK. It's not a matter of discretion, but something they have to have like food.
Profits come from backing the big trends. Not trying to gamble on short term fluctuations.
Recent reports have highlighted how rental demand in the UK is booming. There's just not enough accommodation to meet demand. This situation isn't likely to change in the foreseeable future, making buy to let in the UK a solid investment.
Finance
A big plus point about investing in the UK is the possibility of finance. It's a very international market with a lot of foreign property owners and lender's tend to be more used to providing finance for non residents. Up to 70% of the purchase price may be financed. This greatly boosts return on capital spent. Please contact us for more information.
Rental assurance
We recommend experienced property managers and it's likely your tenants won't pose a problem. However, for extra peace of mind we recommend rental insurance, whenever this is available. This means that if the tenant doesn't pay – no problem, the rent is covered. This policy also covers legal costs in the unlikely event a legal dispute, such as seeking eviction. Costs about £90 to £225 a year, depending on property value. For total peace of mind it’s well worth considering.
Contact us now to invest in this strong European property market. |
05/17/2011