The UK property market is constantly in the news. Industry experts Homelet recently found that landlords in the UK are set to own £1tn of property in 2015. With insiders stating that the market will cool down, only to be followed by others predicting that the prices will continue to rise, it can be a difficult time for those thinking about investing in real estate.
London vs. the Rest of the Country
One of the first things you need to know when discussing the market is the discrepancy between and the rest of the UK. Average house prices in the UK are now £273k, though the average price in the capital is just over £500k. The London property market very much exists in its own bubble. Cash buyers’ interests, particularly those from abroad, have wavered little despite the rising prices. These buyers are driving prices beyond the reach of most people in the country. Because of this, we’ve been seeing bigger movement outside the capital lately, particularly from the East and South East regions of the country. Brighton, Luton, and Southampton have all been tipped as the UK’s next “hot spots.” The latter is expected to see the largest growth, as it is within the easiest commuting distance of the capital.
Buy-to-Let or Flipping
To take advantage of the current climate, many investors are looking at buy-to-let properties or the more risky tactic or “flipping.” If you’re looking for a buy-to-rent property, research your local area. If the figures don’t add up, you could consider getting something further afield. You’ll want an area with a good rental yield. This takes into account the rental rate in the area as well as the average house prices and monthly renting costs. Southampton currently heads the table for the towns that offer the best buy-to-let-returns, while up market districts of London generally make up the worst options.
If you’re looking for a quick sell, make sure you’ve mapped out a realistic timeline for all of your planned improvements before you part with your cash. Unfortunately, even the most meticulous of schedules will likely hit some bumps along the road. This is why it’s important you factor in the worst possible scenario as well as the best. Once you’ve crunched the numbers, consider the potential gain versus time, effort, and funds you’ll have to put in.
Despite all the news surrounding the subject, the truth is that no-one really knows how the market will pan out. The best advice you can get is to remain sensible with your decisions. It’s never a good idea to panic buy, particularly with something as significant as a home. Be aware of the current climate of your area, and try to make the most educated decision you can with the information you have at the time.
