UK Property Investment

Property investment has been viewed as a route to financial security. The number of property programmes on television has reflected and then helped to create more interest in UK property investment. Now, however, with interest rates of the rise and the price of property still on the increase, has the UK property investment market run out of steam?

The aim of UK property investment is to make money above and beyond that which you could make it using your money in other ways. There is a speculative element that gives a certain amount of risk. Although you might make money, there is a possibility you might lose some too.

UK property investment is based on a sound footing. Everyone is familiar with property, as we all live in it. Property is tangible in a way that stocks and shares are not, and you can have some influence on a property’s value by putting your own mark on it.

There are a number of opportunities in UK property investment, with the range expanding and taking in some new ideas in recent years. Such ideas range from buying a wreck cheaply, doing it up and selling it on at profit to investing commercial property such as a shop, office or warehouse and renting it out. There are also opportunities to become a buy-to-let landlord, or buy a second home or holiday cottage and rent it out part of the year.

Another option for UK property investment is to buy a property before it’s built – off-plan on a development. The objective is to get a brand new property at a discount, and then rent it out or sell it on when the development is finished.

Other property investment options include buying a hotel or a bed & breakfast, downsizing and pocketing the difference, buying as cheaply as possible at auction.

Whatever way you decide to get into UK property investment, you must be sure of why you are doing it, what you hope to achieve and in what timescale. UK property investment is a business and you should be aware of the risks involved.

Recent reports have shown that rental yields have fallen in the UK. England’s rental yields fell from 5.82% in quarter one 2007 to 5.42% in quarter two. Although also falling, Scotland’s yields did not slip as far, going from 5.99% in quarter one to 5.85% in quarter two. It was in London where the biggest fall came, from 5.96% in quarter one to 5.38% in quarter two. Falling yields have probably been due to increasing house prices with increases in rent not matching; this is especially true in London where house prices have continued to soar with rents being left behind. It is not a sign of a weakening buy-to-let market as lettings agencies have seen growth. It is likely that landlords will slowly increase rents to bring them back into line with property values and rental yields will therefore pick up as a result.

UK property investment is about buying the right place at the right time. Consider affordability for people renting or when you sell on. Consider new builds in the area. Understand what regeneration is taking place. Look at historical and future long term growth. Find property in the right location – convenience, infrastructure, transport.

For UK property investment you have to ask yourself whether those places that have recently experienced property price rises will continue to see them in the future. Are such rises sustainable? The questions of affordability and regeneration help.

Choosing to invest in the right location should mean that there is plenty of mileage left in the UK property investment market. Ask the right questions and understand the answers. Don’t be swayed by personal feelings – this is a business investment you are making.