Property Investment
April 2nd, 2010
Investing in the property market over the last few years has taken off in leaps and bounds and has proven for those who invest sensibly, property can be a worthwhile and profitable investment. More Wealth has been created through property investments than any other method of financial investment over the last thirty years, both in the U.K. and throughout the world.
In the U.K. the most popular by far is the residential Buy to Let sector. This is because investors have a wealth of advice freely available compared with say commercial investment properties. Residential property is the easiest to finance with many banks offering special Buy to Let mortgages and specialist lenders focusing on just this sector they are also easy to manage on an ongoing basis especially if you employ a good letting agent. This is also the sector most “man-in-the-street” investors can relate to, since most of us have been involved in house purchases or renting as tenants in our own lives.
The residential market in the U.K. is huge and there are properties available to suit all investor’s needs which are as varied as the properties available, this is why at Happy Homes we always purchase our investment properties to order, all our clients will undergo a consultation with one of our team to ensure we are looking for the right property, in the right area at the right price. Along with this, we also ensure that every property is fully refurbished to a high standard to avoid the need for ongoing maintenance.
Wherever you look, the media and analysts are always debating about the state of the U.K. property market, often predicting “booms” and “calamities”. It’s no secret that the market changes daily, but regardless of the hype, the underlying trend over the last thirty-five years has been upwards towards the “boom”.
Nationwide records show that U.K. property prices have increased on average by 9% a year since records began in 1973, compared with an average 7% rate of inflation over the same period. The Halifax House Price index, which was created in 1983 shows house prices have risen by 8%, to date whereas inflation ran at around just 4.5%.
Profits from investing in property can exceed those averages depending on location, rental returns and “leverage”. Some areas can “boom” while others stagnate or drop, as exemplified by Hull in the 1980’s where prices boomed by as much as 20% while prices fell nationally, As for rental returns, it perhaps goes without saying that an investor who rents out a property for £450 with outgoings of £350 and a capital growth of 4% a year, is going to prosper more than one whose outgoings are £425 in the same area. Lastly leverage, having the ability to use just a little money to buy a comparatively lucrative asset, allows investors to benefit fully from long term increased property values through borrowed funds, if used effectively. What we are trying to say here is know your area. Happy Homes have been buying and selling property in Nottingham for sometime and they know the areas where house prices are realistic and rental demand is high, they also have a vast experience in ensuring your Return on Investment is maximised.