Top Reasons Why Foreign Investors Should Invest in the UK

The UK has long been a honey pot for overseas investors looking for great returns on property and more - here’s why foreign investors should look to the UK.

The UK economy is one of the strongest in the world, and although the looming prospect of Brexit is predicted to shake things up, the country is still achieving new heights with 2019 marking a record-breaking wage growth and retains its status as the most popular European country for foreign investment, holding more than both France and Germany combined.

The UK has a steadily growing population; currently at just under 67 million, there has been a year on year increase since the last census in 2011, when the official number was estimated to be 63,182,000, and this means more and more residences are needed to accommodate a rise in new households.

The Housing Shortage

Despite the continuous population increase, there are quite simply not enough houses in the UK, and it is projected that over the next two decades, more than a quarter of a million new households will be formed every year. This means that around 250,000 new homes will need to become available to meet the growing demand, yet new housing is not keeping up…

There is also an overwhelming demand for rental houses, with a prediction that ⅕ of the population will be renting their home in the next five years, as buying properties has become more expensive and competitive. All in all, this is a tricky situation for the British government, but a fantastic opportunity for foreign investors.

Expect a High Yield

The UK is known for its high yielding property investment models. This means that having the money to invest in the UK property market, especially in major cities such as London, Manchester and Leeds, means you can be fairly certain you’ll get good returns on a buy-to-let property.

With the potential turbulence of Brexit lurking on the horizon, it’s understandable that some investors may want to wait out the storm. However, getting in now opens up the opportunity for price negotiation, enabling you to get a good deal on a buy-to-let property.

Due to the pre-financial crisis actions of British banks, who lent out huge amounts of money in the form of mortgages, an increase in population and demand, the value of the average UK property today is more than three times that of what it was in 1997. Ignore Brexit for one moment and recognise this phenomenal statistic.

The Bottom Line

Investing in a UK property can be daunting and downright confusing, but at the core of the property market sits one undeniable fact: people love the UK. It’s a safe and stable in terms of government, society and culture, and in the long term this consistency can weather any economic storm that Brexit throws up.

To ensure you get the best deal (and save yourself a lot of time), use a reputable property investment company when investing abroad. Choosing professional assistance gives you instant access to local knowledge and expertise, and gives you an overview of all your options according to your future plans and budget.


Top 5 Highest Yielding Cities for Residential Property Investment

Whether you’re buying to let, renovating for a resale, or looking for a second home, here are 5 of the current most profitable cities for investing in property.

Investing in property is one of the best ways to generate long term income, and secure your money for future years to come. Where you choose to invest plays a vital role in determining the success of your venture, so it’s important that you do plenty of research before commencing your property hunt.

To make things easier, we’ve compiled a guide to five of the most profitable UK cities for investing in residential property, so whatever your goals, budget size or timeline, you’ll start things off on the right foot by looking in these areas.

We’ll cover the factors that have made these locations increasingly desirable, as well as the average Return On Investment (ROI) you can expect from each city as an investor.

1. Greater Manchester

After London, Greater Manchester is the highest yielding area for property investment, and this doesn’t just apply to the city centre any more. Offering an average ROI of 6% annually through renting, a rich cultural scene, good job prospects and a population on the rise (it is expected to reach 2,730,076 by 2020, showing 0.74% annual increase), there are several non-central areas that offer lots of opportunity.

2. Sheffield

Sheffield has a population of around 1.5 million strong, and it’s growing. It also has some of the most affordable property prices in the country, and with recent developments making it an increasingly popular and more affluent area, there are plenty of opportunities for investors after a bargain buy. While these properties are unlikely to bring great yield just yet, the low prices mean you can hang on to them for the future, and the current ROI investment score of a whopping 22.7%.

3. Leeds

Another Northern city that’s surrounded by a real buzz at the moment, Leeds has the second fastest growing population (Manchester has the first), and subsequently residential properties are in high demand. Huge developments are currently underway to modernise the city, and returns on investment are expected to soar over the coming decade.

4. Bath

With its gorgeous architecture and rich social and historical scene, it’s easy to see why Bath is an eternally popular place to live, and therefore a great place to invest if you’ve got the cash for a Southern property. With an annual 12.7% average ROI score, you’ll be able to make decent cash out of renting and selling on.

5. Derby

One of the biggest property booms is taking place in Derby, with the average ROI for investors currently at 18%. In the past decade, £4 billion of development cash have been pumped into Derby, and it remains the industrial hub of the North with its historical association with Rolls Royce and Toyota. Derby has showcased some of the most impressive economic growth of any UK city in recent years - so why not get involved in the action?

There are great opportunities for property development all over the UK. However, it’s important to remember that, wherever you choose to invest, there is no guarantee of yielding a profit, even if you do purchase in one of these cities. Do plenty of research before committing to a project, especially if you’re not familiar with the area in which you’re buying. Speak to an independent advisor to ensure your money is being well spent, and good luck!


Property vs Other Investments

For those eager to invest their money into a solid enterprise, property is a fantastic option - here we compare it to the benefits of other investment avenues.

Property is one of the most secure and profitable areas in which to invest your money, but don’t take our word for it: in this article, we’ll look at how property compares to other investment avenues so you can make the right decision for your finances.

Whether you’ve got the funds to invest in a classic townhouse as a second home, you’re interested in a contemporary city apartment so you can buy-to-let, or you’re eager to get involved in a fixer upper project with the hopes of selling it on for a profit, it’s important to consider all your options before handing over the cash.

We’ll compare property with other popular investment options to give you a clear overview of where best to put your money.

Other Worthwhile Investments: Your Options

So, you’ve decided to start investing your money? That’s great news - if you choose the right option to suit your life, you will gain valuable assets that could generate a supplementary or even main income one day.

There are lots of options to choose from, and it can be a daunting prospect, especially if you’re a first time investor. The avenues include: stocks and shares, peer to peer lending, angel investing, ISAs and pensions - here’s how these options measure up against property.

● Stocks and shares: if we’re talking about time, returns on stocks and shares will give greater returns with an ROI of 10% annually, however they are a more volatile and risky avenue, prone to big changes that are out of your control, compared with the fairly stable world of property investment
● Peer to peer lending: although considered relatively low risk, the returns on P2P are limited in comparison with property.
● Angel investing: a good option for startups who need a boost, but quite often you need connections to get it going, and the terms are often ambiguous.
● ISAs and pensions: these are both easy to manage and offer reliable payback, but they are also tied to each and every economic change that comes their way.

Why Property Is the Most Stable Investment

Property investment is in a category of its own, and is your best option for acquiring long term wealth. This is due to several reasons:
● As well as offering a lot of potential for capital growth, property can be rented out and used to generate an income from tenants, offering around 10% payback
● You don’t need to be an experienced investor to get involved and easily access records for information on the market
● Despite Brexit, the UK property market is still on the rise, and has been for decades - over the past 30 years, the average house price has quadrupled from £50,000 to £250,000
● Unlike other types of investment, a property is something you can see and visit, which makes it more dynamic and engaging.

The forecast for the UK property market is set to stand steadfast throughout the years to come, and technological innovations transforming the way properties are built and run, this is as exciting a time as any to grab your slice of the pie.


London vs Rest of the UK

We take a closer look at how London compares to the rest of the UK in terms of property investment returns on investment, house prices and other economic factors.

London is in a category of its own in pretty much every regard. When compared to the rest of the UK, it trumps every other city in terms of population, racial and linguistic diversity, economic size and public transport. However, it is also the place with the most prolific drug use, biggest wage disparity and highest living cost in the UK.

Whatever your opinion of the capital, it is a bustling city with big opportunities for property investors. For those who want to get into the London property scene, or are perhaps curious about investing in other cities, we’ve created a quick guide to London vs other major cities in the UK in terms of economic performance and other stats. Read on to find out how the Big Smoke measures up.

Population Demographics

One of the most visited cities in the world, London is by a mile the most populous city in the UK, with the current number of residents estimated to be just under 9 million in 2019, representing an escalated growth rate of 1.76% compared to 7 years ago, and 6 million more than the UK’s Second cities of Manchester and Birmingham, each of which is home to fewer than 3 million people.

To put it another way, around 13% of all the UK’s residents live in London, although the area it covers accounts for less than 1% of all the country’s land.

House Prices

What with the rising population and the fact that the banks essentially made new money before the 2008 financial crisis, houses are in high demand in London - and they’re on average more expensive than in any other city in the UK. As a result of this, London is the only city in the UK where more people rent their homes than own them.

As of June 2019, the average price of a house in London was £457,000; to put that into perspective, in Northern Ireland it was £135,000. The average house price in the UK is £230,292.

Return on Investments

With a population increase that shows no sign of slowing down and house prices through the roof, it’s no surprise that more and more people are turning to rental properties to find somewhere affordable to live. This is great news for property investors: once you own the property, you can expect to gain a reasonable, long term income from renting it out.

The exact ROI of renting out a property you own depends on the desirability of the area in which you buy, but tends to yield at a steady rate of between 3.5 and 4.5% annually.

If you’re interested in property investment in London, get in touch with one of our friendly team today for a consultation on where to begin, and which project might suit your requirements.


3 Top Tax Benefits from Property Investment

Directly buying a property can transform your financial situation, and give you returns for potentially years to come. Whether you’re purchasing so that you can live in it yourself as a second home, buying a holiday house that you let some of the year, or getting involved in a buy-to-let scheme, property is a stable and secure way to invest your money.

As an independent owner, you have to pay 45% tax on all income you get from the property. Compared with other investment types, property offers particularly great tax benefits, and there are several loopholes that first time investors should know about too.

Besides generating income from renting out or selling a house, there are various tax benefits to consider when getting involved in the property market - here are the main three:

1. Deduct Expenses

If you’re in charge of a residential property, there are certain expenses that can be deducted from all your profits generated by the house (from selling or renting it out). The included expenses include any fees paid to the letting agent or accountants, legal expenses, insurance, utilities and Council Tax. The full list of what counts as an expense can be found on the direct gov page on renting out a property.

2. Dual Ownership

If you’re the owner of a rental property, you’re entitled to up to £1000 tax-free allowance on income from rentals. If you own a property with someone else, you are both entitled to this £1000 allowance, which can save you an average of £300 in tax payments. If you’re considering property investment, finding someone reliable to invest jointly is a good move.

3. Hold Property Under a Ltd Company

You’re entitled to up to £11,850 tax-free personal allowance from rental profits. If you’re an individual, you’ll have to pay the full 45% tax (not to mention additional taxes in the form of Stamp Duty, Land and Buildings Transaction and Land Transaction taxes); if you purchase a property through a Limited company, you could end up paying less tax. If you’re a landlord who has four or more properties to let out, you will likely save money by purchasing through a ltd. company, but there are other factors to consider such as time spent doing business admin.

Doing plenty of research into property-related taxes could save your hundreds of pounds. Make sure you correctly deduct all your expenses before calculating your profit from rental, so as not to accidentally file for too high a rental income tax return.

Consider buying a property with another person to maximise your tax-free allowance (and share the financial responsibilities in general), through the benefits of joint ownership laws.

And finally, if you’re serious about cutting your taxes and are in charge of four or more properties, setting up your own limited company could be the best way to do that.

Whatever your decision regarding property and taxes, you can get all the assistance you need with the help of a professional property investment company. Get in touch today to arrange a consultation.


Why is London Filled with Empty Homes?

London is one of the most desirable locations on the planet, so why are there so many empty properties in the UK capital? We take a closer look at the facts.

 

London is the largest economic centre on the planet, is home to more than 8.5 million people, and has an average property price of more than £617k, yet many of its properties are currently sitting unoccupied.

 

As of late 2018, it was estimated the number of empty houses in London to be 20,237, which seems bizarre given that the demand is stronger than ever and the population continues to rise, predicted to exceed 9 million by 2020.

 

So, just why aren’t these houses being lived in? We take a closer look at the reasons for this strange phenomenon that seems so at odds with the bustling, crowded and economically booming capital.

 

A Surplus of Luxury Apartments

 

To the chagrin of the ordinary working Londoner, a large slice of the empty homes in the capital are in the high end, luxury penthouse / apartment category.

 

Developers, both from the UK and abroad, see opportunity in inexpensive land, buy up and pump their remaining budget into creating luxurious, highly profitable residences. The problem is that the demand for these types of properties isn’t nearly as high as the demand for regular, ordinary places to set up home.

 

Working families and young people are unable to afford these sprawling multi million pound apartments, and they’re not really designed for such clientele anyway.

 

On top of this, 1 in 5 of these luxury homeowners is from overseas, meaning that they’re less likely to spend extended periods of time in the capital. Many apartments have also been also bought as second homes, and their owners spend the majority of their time elsewhere.

 

Derelict & Abandoned Buildings

 

There are several empty homes in London that have simply fallen by the wayside, and with no funding to get them back to being suitable for living in, they remain empty for sometimes years at a time. This often happens as a result of over-enthusiastic developers.

 

They may have been bought in the 1990s, when London properties sold for less than quarter of the current average asking price, and over the years development and maintenance costs skyrocketed to the point where these developers couldn’t afford to take the risk on fixing them up.

 

There are countless warehouses, schools, unfinished constructions, even entire blocks of flats that are sitting derelict and abandoned, with their owner just waiting for the price to rise enough to make a profitable sell. Meanwhile, London is now a place where inhabitants are forced to fit their whole lives into as little as 13 square metres, and renters are now outnumbering homeowners… It doesn’t make much sense, does it?

 

What we need is innovative, imaginative and human-focused property development from contractors with a conscience. If you’re passionate about transforming London’s property landscape, get in touch today to arrange an informal consultation.

 


Prefabricated Vs Bespoke Designs

Making the choice between prefabricated and bespoke designs for your property can be challenging - check out the pros and cons of each to make an informed decision. Whether you want to expand on an existing property business, invest in a new venture, or build a second home, the early stages of decision-making opens up two design avenues that you can go down: prefabricated and bespoke. In this article, we’ll take a look at these two types of building and explore the pros and cons of each.

 

Prefabricated Buildings

 

Prefabricated (‘prefab’) designs, or ‘modular homes’ as they are often referred to, are essentially designed and pre-made away from the intended build site. They tend to be built in separate sections and floors that can be easily transported and then assembled quickly on-site.

 

For some people the idea of prefabricated house designs harks back to the prefab houses on wheels of the 1920s, but this trend has continued over the decades and is still going strong today, with technological innovations helping to give prefabs more streamlined, efficient designs than ever before.

 

If you’re interested in developing your property empire with prefabrication designs, it’s good to be aware of their benefits and drawbacks:

 

Pros:

  • Efficient use of time and labour
  • Reduces waste and environmental damage compared with conventional builds
  • Cost-effective
  • Remote construction means less dependency on weather
  • Easy to modify later on
  • Improved insulation and acoustics

 

Cons:

  • Aesthetic amendments are limited
  • Durability tends to be reduced
  • Transportation logistics can be a challenge
  • More homogenous designs
  • Fire and safety can be slightly more of an issue

 

 

 

Bespoke Buildings

 

Bespoke, specialist designs make it possible for contractors to create the exact building they need to fit their specific requirements. Control every element of the building, from the initial blueprints right through to the internal colour scheme, and make the property you envisioned from the start come to life.

 

Customised homes are not a new phenomenon; designers and contractors alike have enjoyed the flexibility bespoke builds give them, enabling them to express their personal tastes and create a space that is tailored for a specific lifestyle.

 

Having total control over every element of your property’s design is, for many contractors, the best way to go, but bespoke design has its drawbacks as well - check out our pros and cons for a full overview.

 

Pros:

  • Space and dimensions tailored to specific needs
  • More efficient timewise vs conventional construction
  • All-in-one price - easier to budget
  • Seamlessly incorporate with existing structures
  • Lots of eco-friendly solutions available
  • Quality and durability guarantee

 

Cons:

  • Expensive - high initial cost
  • Easy to go over budget
  • Time-consuming
  • Certain features may be missed / not included
  • At the mercy of fluctuating costs and supply

 

 

As you can see, both prefabricated and bespoke designs offer a range of both advantages and disadvantages - whether you’re a contractor or property developer, the choice is entirely down to your personal situation. Need advice on making your property venture a success? Speak to a reputable advisor to ensure you’re making the right decision for you.


Breakdown of Section 21

Section 21 is the official notice of eviction - here we’ll provide an overview and breakdown of everything the notice covers for both landlords and tenants. As a landlord or tenant, it’s important to know the principles of a legal eviction. The eviction process begins with the Section 21 notice, which is a notice issued to tenants who are under an AST (assured shorthold tenancy). Section 21 differs slightly from Section 8: the former is used to evict tenants who have come to the end of their contract; the latter is when tenants have actually breached the terms of the contract.

 

When to Issue Section 21

 

There are two situations in which Section 21 is applicable:

  • When a fixed period tenancy contract reaches its end
  • At some point during a periodic (i.e.no fixed period) tenancy

 

In certain situations, Section 21 is not valid if:

  • The tenancy only began within the past 4 months
  • The fixed period of time outlined in the tenancy agreement hasn’t reached its end yet (barring any additional clauses that negate this)
  • The property in question is ‘a house in multiple occupation’ (known as HMO) and without an official council-issued license
  • The tenancy began post-2007 and the landlord has failed to keep the deposits in a protection scheme
  • The tenancy began post-October 2015 and no Form 6A (another name for Section 21) or equivalent letter has been issued
  • The local council has plans for the property to improve or do emergency maintenance work on it (if either or both of these is true, a notice will be issued by the council)
  • The landlord owes fees / deposits to the tenant
  • Correct guides and certificates haven’t been issued to the tenant (see full list on the Section 21 government page)

 

Notice to Give Before Section 21

 

In order for Section 21 to be valid, it must always be issued with at least 2 months notice period for the tenants. This means they have 2 months to get their affairs in order and arrange moving out.

 

If you’re dealing with a periodic / non-fixed tenancy, tenants are permitted to stay in the property for the remainder of the time covered by their most recent rental payment.

 

What Happens After Section 21?

 

Once a Section 21 notice has been issued, a landlord needs to record and keep evidence by:

  • Filling in an N215 form
  • Ensuring your name and the date of issue are written clearly on the Section 21 document

 

If there is any difficulty getting the tenants to leave the property by the allocated time, your N215 form can be used to get things moving with an accelerated order of possession.

 

What is Section 8?

 

We’ve touched on it earlier, but here’s Section 8 in a little more detail. Section 8 is similar to Section 21, except it is a notice for seeking possession of a property.

 

This applies when the terms of the tenants’ contract have been broken, and the landlord wishes to repossess the house as soon as possible. Section 8 can have a notice period of anything between 14 days and 2 months, depending on how the contract has been breached.

 

If you can’t get the tenants to leave by the date specified, there is also the option to apply through a court for an order of possession.

 

If in doubt about your legal rights as a landlord or a tenant, get in touch with a professional property solicitor for advice and guidance.