Why Should You Even Consider UK Property Investment?
This is most likely one of the most burning questions anyone has when looking at buying a rental property.
And for a good reason too!
A lot has changed over the last couple of years, with the various lockdowns and Covid-19 restrictions having a significant impact on our lifestyles and even the economy itself.
Even as we – hopefully – appear to be crawling our way back to some sense of normality, it’s still as important to consider your options thoroughly before making any final decisions.
The good news, though, is that the UK property market appears to be thriving at the moment.
Rent prices have increased across the board, with the average UK rent reaching a record high of £1,064 in February – 8.5% higher than last year. This also saw a considerable surge in average rental yields, with the likes of Manchester and Liverpool offering returns of over 7% on average.
The slight downside is that taxes have changed somewhat in the past few years, though, so you may be earning less monthly income than you would have previously.
Announced in the 2022 Spring Statement, for example, National Insurance will increase by around 1.25% from April, and some landlords may also be affected by ’stealth taxation’ - in which people fall into higher tax bands as a result of thresholds and allowances not being increased.
Some of these concerns will be covered later in this guide, but the bottom line is that it’s not impossible to make solid profits in UK property.
In fact, if done right, going into real estate can prove to be very a lucrative venture indeed. While this can also be true for other investment options – i.e., cryptocurrency or the stock market – the simple fact is that these can be a much risker endeavour.
Property investment is a tried-and-true method for many investors for essentially one reason – it has an incredible track record for bouncing back from an economic crisis.
Look back to 2020, at the beginning of the UK’s first lockdown, and houses prices in the UK saw a massive drop of around £2,000.
Fast forward to January 2022, though, and buyer demand has never been higher, seeing an increase of 23% compared to the same period last year. House prices are also on the rise, with Zoopla finding an increase of 8.1% to current UK house price growth – with the average value being £245,200.