Residential Property

The price fluctuations in UK residential property market over the past few years serve as a reminder that asset prices, whatever there nature, are cyclical with relative price rise and falls.  The best time to buy is when the prices are low (often as a result of a depressed or stagnant market) and sell when high in a buoyant market. Although this point may appear obvious in retrospect it is not necessarily the case at the time of investment.  Investors can fall into the trap of relying on general market sentiment rather than analysing market fundamentals.

Before investing in UK residential property it is important to establish what your investment goals are. Are they principally focused on achieving high rental yields or capital growth? Although it is possible to benefit from a combination of both high rental yield and capital growth, normally one outweighs the other. 

 

Is now the right time to invest in UK property?

The UK property market, like many other global property markets, fell in value between 2007(4th Quarter) - 2009(2nd Quarter). It has since bottomed out with a steady price rises to date (see our article ‘How to profit from property bubbles’).

Excellent value currently exists in the UK property market. As prices continue to rise however, bargains become harder to obtain.  Experienced property investors, particularly cash buyers, continue to be very active at present as they know that the best property investment opportunities can often to be seized when economic uncertainty prevails in the market. 

Rental yields (incomes) ranging from 6% - 10% can currently be achieved.  Fundamental to the rental yield is the intended property purchase price.  It is important to buy property at below the market value as this aides higher rental yields. 

Investors often do not realise that the profit in made in purchase and not in the sale. In addition to gaining attractive rental yields, buying below the market value can also create instant equity in the property. Many property investors withdraw some of the equity in their property, by way of a mortgage, to fund another purchase. 

 

The outlook for UK property investment market

Investing in UK property has and will continue to provide an attractive medium to long-term investment. There is chronic undersupply of certain types of property across the UK at present which is increasing property prices.  Additionally, the higher mortgage deposits that are now required by banks is forcing many would-be buyers to continue to rent, which in turn is driving up rental yields as renters compete for accommodation. 

As a buyer’s adviser, we are able to use our client’s collective buying power to take advantage of the current market and negotiate substantial discounts to ensure that our recommended investment property is significantly below the current market value.

Call us today to speak to one of our property investment advisers who will recommend suitable property to match your financial needs.