- Prices from £97,500
- 8% Net Rental Return
- Media City UK
New build properties are some of the most popular types of property investment, with more regeneration and exciting developments hitting the UK year after year. Some of the major UK property investment hotspots offer plenty of opportunity for those seeking new build investments, with a wide range of Liverpool and Manchester new builds. But is buying a new build a good investment, and what should buy to let investors know before selecting their new build property?
The New Build Market
The new build market in the UK is thriving. The government has announced plans to build one million new homes by 2020, with construction levels reaching the highest in ten years as of 2018. The number of new build homes that have been built between 2014 and 2015 has grown by 25%, making it clear that the market is showing no signs of slowing down.
New build properties are definitely capturing the attention of a large number of first-time buyers and buy to let investors alike. Research shows that there are now more people buying their first home in England, with around 72,800 first-time buyers purchasing property during 2016’s second quarter.
A study by Sell House Fast, an online estate agent, identified that new build property has seen a 16% year on year growth with around 163,250 new homes completed across England by the end of 2017.
So we know that new builds are increasingly popular in the UK, with plans for more and more developments over the next few years, but is buying a new build a good investment ? With so many new builds dominating the property market as of late, it’s easier than ever to get involved with a buy to let new build investment.
One of the major benefits of newer properties is that new builds are a lot less likely to suffer from maintenance issues than period properties. Building regulations for new properties are stronger and more reliable than they were in the past, making newly built houses and apartments a good option for investors thinking in the long term. The longer a property lasts without the investor having to pay for repairs and general maintenance, the better.
Tenants are often drawn to new build properties for this same reason, preferring to move into a property with perfect facilities and decor. A lot of tenants such as young professionals or students don’t want to spend their time redecorating a dated apartment or having to deal with old and draughty windows in the Winter. When a listing for a shiny new property with modern interiors and impressive fixtures is available, these types of tenants are often the first to snap it up.
Another reason that new build properties are often popular with tenants is the potential for savings. New builds are known to have better energy efficiency than older properties and are developed using the most innovative and environmentally friendly materials. Energy Performance Certificates (EPCs) are an essential element of UK homes, with A being the highest rating and G being the lowest. The higher the EPC rating, the lower your energy costs will come to, which is a quality every tenant and homeowner wants. Over 96% of new build properties are rated between A-C, whereas just 2% of period properties fall between these figures.
This high level of energy efficiency means that running a new build property is significantly more affordable than others, saving an average of around £624 a year and £52 a month on energy bills. The fact that new builds are so well made compared to older buildings can also make them warmer and leave less need for the tenant to turn on the heating, which naturally contributes to lower household bills.
What About Off Plan?
A large majority of new build property investments fall under the off-plan category. Off-plan properties are homes that are still in the development stage, or for which development plans are in place but haven’t yet begun. These types of new builds come with a wide range of advantages, both for tenants and investors.
With off-plan properties, developers are known to offer the properties at a lower price as a way to attract investors. There can also be a longer time frame for a buyer to pay the full amount for the property, with investors often only paying a deposit and the remaining percentage once the property is finished. Those investing in off-plan can also expect to receive a 10-year warranty on their property.
Another big benefit of investing in off-plan property is the big potential for capital growth. There’s often the chance that off-plan properties could increase in value before even being completed, especially if it’s being developed in an area that has a lot of capital growth potential. All our properties at RW Invest are developed in UK property hotspots, meaning a high likelihood of your off-plan property increasing in value by the time it’s ready.
Lastly, off-plan properties give investors more freedom when selecting their property. For instance, if investing in a property within a new block of apartments, investors can choose the unit with the best size, most attractive layout, and most impressive city views.
Before making an investment into a new build property, it’s important to research all the facts that contribute to its success, which includes the location of the property.
Liverpool and Manchester offer some of the best property investment opportunities in the UK. The Northern Powerhouse received £8.9 million worth of investment towards building new housing in the key cities of the North. Plans are in place to develop 10,000 new builds in Manchester city centre, with rental prices growing at a rapid pace. These new developments in Manchester city centre are sure to appeal to the cities rising young population, with young professionals flocking to Manchester to take advantage of the exciting business opportunities available.
Liverpool also has a significant population of young people, with the fastest growing city centre population which is down to younger generations living in the city. There are a number of Liverpool new builds planned, with 2,000 homes set to be built in Liverpool in the next two years alone. Liverpool and Manchester are also popular student cities, with a combined population of around 155,000 students.
This presence of young people in Manchester and Liverpool is more reason to invest in new build properties, with young professionals and students more likely to rent an apartment or house that’s up to modern standards. Capital growth is another major factor when choosing a location for your investment, with both cities experiencing some major regeneration.
Manchester development over the years has seen huge regeneration projects such as Salford Quays and Media City UK — creating a cultural, residential and business hotspot in a once a run-down area. Our Hollywood Manchester property in the heart of MediaCity is popular with those working in the city, and a prime location for plenty of capital growth.
Liverpool development projects are boosting the economy of the city and bringing high levels of interest and investment from around the globe. Plans such as Liverpool Waters, a complete regeneration of the Liverpool waterfront, are amongst the many projects in store for the city. New builds in Liverpool with RW Invest include our new One Baltic Square city centre apartments, located within Liverpool’s trendy Baltic Triangle which was crowned one of the coolest neighbourhoods in the UK. Other new build homes in Merseyside include our Hamilton Hub student apartments which have the lowest price of any UK property investment, from just £45,450 to buy, with an impressive 8% net rental return.
Whether you’re investing in a new build that’s already complete or an off-plan property, there are steps you should take to ensure you select the right property for you. At RW Invest, we take every step to provide our clients with the means necessary to make an informed decision. The majority of our properties are off-plan, which means that clients aren’t able to visit the completed property to make their decision.
Thanks to state of the art computer generated imagery, however, we’re able to help clients visualise how the property is expected to look upon completion. Our headquarter based showrooms also provide an insight into the feel and design of the properties, whilst tours of the property site give clients a better idea of the space and area itself.
When selecting your new build investment, you have the advantage of cherry-picking the best units. During the initial process, ask your agent to provide CGI images and floor plans that outline the orientation of the property, the most attractive views, and the units with popular features like private balconies.
Developers of premium new build properties will often strive to incorporate state of the art designs in their properties, with modern appliances and luxury decoration. These qualities often lead to tenants being more likely to pay higher rental costs, which directly impacts the type of rental returns investors should receive.
Investing in an off-plan new build property gives the chance to tell your developer how you want the finished property to look, adding any extra touches and fixtures prior to putting it on the market. This is helpful for buy to let investors with a particular tenant in mind, being able to alter the property to better appeal to their target market.
Interested in finding out more about Liverpool development and new build homes in Liverpool with RW Invest? Contact us today and one of our property experts will advise you and tell you more about opportunities to invest in new builds in Manchester and Liverpool.
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Buying off-plan means buying a property before construction work has commenced. There are many advantages to this type of property investment, such as securing the best units and having an influence on design and specification during construction. As the value of your investment will increase during the construction period, off-plan property is an excellent way to achieve capital appreciation and secure a high return on investment. Before you begin, however, there are certain factors to consider.
Comprehensive market research and forecasting is essential when purchasing to achieve the most from your investment. Without understanding both the local property market and the local socio-economic climate you will be investing blind. For example, questions such as: what demographic is the development aimed at? Is there currently existing demand? If not where is the demand coming from? What are the factors likely to affect the market in the short-term? Is there a particular public or private investment that is set to improve local market conditions?
As an investor, you should be aware of where the major regeneration areas in a city are, where infrastructural improvements will be creating new value in the years ahead, and where commercial investment is taking place.
Successful off-plan developments are dependent on a high standard of existing infrastructure: good transport links, modern amenities, shops and restaurants, and educational facilities, are all crucial to create demand among prospective tenants.
As with any property development, there will be more and less desirable units. Investing is this type of property investment is a great way to ensure that you get the pick of the bunch. Ask your agent to see floor-plans and CGI images to ascertain which units have the best views. North-south orientation is another big selling point for prospective tenants, as is proximity to lifts and public access in apartment blocks. By investing this way you get to understand the pros and cons of a building before a brick has been laid. You can then ensure the property meets your requirements by influencing interior design and specifications.
Discounts and incentives are also often available for this type of investment, such as interest on deposit during construction and discounts on bulk purchases.
Despite the many benefits of structuring your investment in this way, it’s not suitable for everyone. The majority of lenders don’t design mortgages for off-plan purchases, so securing the funds can become complicated. This form of property investment is an especially good option for cash buyers.
At RW Invest we specialise in connecting investors with the best opportunities. We only work with the leading developers and rental agents, and always undertake comprehensive due diligence on all our partners. Our consultants have expert knowledge of their local area and are ready to help you make the best decisions.