For many people, getting into property investment is a dream goal, but with little experience, it can be a daunting industry to break into. If you’ve been considering it but are wondering, ‘is property a good investment?’ then you’ll be happy to know that in 2019, it’s just as lucrative as ever. With Britain’s exit from the EU ongoing, investors are understandably cautious, but are looking to cities with ‘Brexit-proof’ qualities: features like a thriving economy, youthful populations and demand for city centre living are all good points to look for. If you are wondering how to invest in property and where the best places to look are, read on for some of the best insider advice.
Property investment for beginners: where should I start?
First things first, what is an investment property? Quite simply, it is real estate property that is purchased with the view to generate income. That could be through renting the property out, selling it in the future, or both. What sets it apart from other investments is that property goes up in value and generates constant income. The best way to start investing in property is, of course, by doing your research. Start by thinking about your budget and how that factors into location. For example, £100,000 will afford you completely different properties in London compared to other parts of the country. When looking at locations, consider factors such as average yields, house selling prices, rental demand, and capital growth. You are likely to find that while London has traditionally been considered a property investment hotspot, many Northern cities offer a lucrative opportunity to make a regular income and generate profits at the end of the investment. Property forecasts for 2019 are predicting that investors will concentrate on the steady markets in England’s north and Midland regions this year, with those markets outperforming London and the South.
Another important consideration when looking at how to invest in property, is who to do business with. With so many property investment companies out there, it can be a minefield navigating your way through and deciding who to work with. A general starting point is to treat Google as your best friend: research companies and look into reviews on consumer sites such as Trustpilot. With over 14 years of experience, RW Invest is a market leader in UK property investment and boasts the largest direct sales team in UK property investment, carrying out thorough due diligence. Our expert client care team will guide investors through the process and offer regular updates about the progress of your development. Our investment property for sale at RW Invest offers impressive rental yields of between 6 to 9 per cent in some of the most prime locations in Manchester and Liverpool.
Alternatively, if you live overseas and are considering where to invest in property, figures from the UK’s Department for International Trade show that overseas investment into the UK is at the highest level since records began. A recent report also named the combined metropolitan areas of Liverpool and Manchester as the world’s 10th top global destination for FDI (foreign direct investment). At RW Invest, we provide overseas investors with lucrative investments and around the clock contact, so no matter what time zone you’re in, you can talk to someone about your potential investment.
Finally, if you’re considering how to invest in property on a buy to let basis, you will want to think about the rental market you are targeting and therefore what property features your ideal tenant will find desirable. For example, if you’re investing in student accommodation, students are increasingly looking for high-end apartments with contemporary designs and amenities such as on-site gyms and 24-hour concierge services. On the other hand, if you are looking at residential properties, your tenants are more likely to be professionals and families who may have different requirements such as transport links and proximity to schools.
Best places to invest in property UK 2019
If you’re considering the best place to invest in property in the UK, London’s property market has seen huge increases over the past decade: the average cost of a London home was £351,000 in 2008, rising to £671,412 in 2018. However, while property prices have grown, rental prices are on the decline, resulting in lower average yields for investors. When it comes to the best places to invest in rental property, investors are therefore looking to the North, where they can get a bigger return on rent. In Liverpool for example, the L7 postcode delivers an average rental yield of 11.79%. When you compare that to London’s average of 3.7% in 2018, you can see why investors are looking to cities outside of the capital. Meanwhile, house prices in the North West of England are also expected to lead the way in 2019, with a predicted increase of 21.6% over the next five years.
When considering the best place to invest in property in the UK, Liverpool is a great option, with six of its postcodes appearing in the top 25 best buy to let areas for 2018. The city centre has the fastest growing population in the UK, up a massive 181% between 2002 and 2015 thanks to an influx of young professionals and students migrating to the city. It’s also been boosted by multiple regeneration projects including the Baltic Triangle, which has been transformed into a £190 million multi-use environment, popular with creatives and students. Liverpool Waters is also set to be reborn with an ambitious £5.5 billion development project that will see the city’s northern docks completely overhauled into a cultural and business hub. At RW Invest, we have a number of properties in the Liverpool area, promising net rental returns of between 7 and 8%. Choose from luxury waterfront apartments just minutes from the trendy Baltic Triangle, to state-of-the-art purpose-built student developments.
Meanwhile, Manchester is another of the best places to invest in property 2019. With a booming housing market, more apartments are being built than ever before. With a city centre population predicted to increase ten-fold by 2027, house prices are forecast to grow by a massive 28.2% in the next five years, while rents in the city are predicted to rise by 20.5% by 2021. It’s no surprise then, that investors are snapping up properties. Our Manchester property investment opportunities promise net rental returns of up to 9%, with prices starting from £97,500.
What types of property to invest in
When you are looking at the best way to start investing in property, consider the benefits of different types of property to invest in, like student, off-plan and new build. Off-plan property means you are purchasing a property before it has been completed, which often can result in a simpler buying process and cheaper prices below market value, as well as promising the latest designs and technology which will appeal to renters. New builds are known for being more energy efficient, which is not only appealing for eco-conscious young tenants but is also more economical. Our latest off-plan properties at RW Invest include luxury apartments in both Manchester and Liverpool city centres that come with an experienced management team and rental returns of up to 8%.
Student accommodation is a profitable option if you are looking at how to invest in property. The UK’s purpose-built student accommodation (PBSA) market is worth a staggering £46 billion, while the UK is the second most popular location for overseas students looking to study. The reasons for investing in this field are multiple. It can be tricky to predict how long residential tenants plan on staying in your property: often, tenants move around as their jobs and circumstances change. University courses on the other hand, stretch out over several years, so it’s often easier to find students who will stay for a longer period.
Luxury student housing has also become increasingly desirable among many students, as opposed to standard student digs. City-centre, high-spec properties are in high demand amongst lifestyle-savvy students and as a result, the number of higher-priced studio rooms has increased by a whopping 106% since 2014. International students studying in the UK have also risen by 70% in the last decade, becoming a key market for luxury student housing, with the majority seeking new, purpose-built accommodation. Naturally, this growing demand for luxury housing has boosted investment opportunities. More than a fifth of students are now prepared to pay more than £160 per week if the facilities impress them. Additionally, while it may seem that student housing is popping up all over the place, demand is actually outstripping supply. In 2017, there were just 602,000 purpose-built student accommodation beds in the UK for 1.7 million full-time students. With demand high and asking prices low, you can therefore expect impressive average rental returns of 6 to 7% on student accommodation – a great selling point when you are looking at where to invest in property.
Investors keen to capitalise on student property opportunities can look to the likes of Liverpool, London and Manchester as the best places to invest in property 2019, as they are among the cities with the highest number of enrolled students. At RW Invest, our student properties are premium residences that include onsite features such as gyms, common rooms with Wi-Fi, a concierge, bike storage and laundry facilities. Just minutes from local universities in Liverpool and Leicester, they offer all the convenience and quality features that students desire.
Research the financial and legal side
The final step when investing in property for beginners is of course to make sure you are clued up on the legal side to your investment. Rather than going in with your eyes closed and hoping for the best, make sure you are as informed as possible on the process. For example, recent changes to mortgage interest tax relief may affect you, and it is always best to look at your financial options in depth, considering the type of loan you may go for. If you are an overseas investor, it is also important to stay on top of any laws that may impact your business. For example, changes to capital gains tax for non-residents come into effect in April, and will require overseas investors to pay capital gains on disposals of UK property and property rich entities. Provided you do your research and go into your investment prepared, there’s every chance you will enjoy a financially successful venture that will reward you for many years to come.