Property Investment UK: The Ultimate Guide

Property investment UK - The ultimate guide Property investment UK - The ultimate guide

Looking to get started with UK property investment? 

If you are, then this is the perfect guide for you. 

Not only will we tell you all about the basics of property investment in the UK, but we will also cover why you should invest in 2021, the best cities to invest in, and exactly how to invest in UK real estate. 

Other topics you will encounter include: 

  • How much money is needed to invest in property? 
  • The risks involved in buy-to-let property. 
  • The best way to make a successful investment. 
  • The latest property opportunities from RWinvest. 
  • Latest property investment UK news. 

And much more! 

The guide will be split into five sections, so if you’re more interested in finding out how to invest in UK property rather than why, then be sure to click the contents buttons below to be taken straight there. 

So, now that we’ve got the introduction out of the way let’s get right into it. 

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Contents:

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What is Property Investment?
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What is Property Investment?



Why Invest in UK Property?
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Why Invest in UK Property?



Where Should You Invest in Property?
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Where Should You Invest in Property?



How to Invest in UK Property?
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How to Invest in UK Property?



Investment Property for Sale
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Investment Property for Sale



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What is property investment? What is property investment?

Chapter 1: What is Property Investment?

Chapter 1 will explain the absolute basics of property investing in the UK.

Here, we will explain property investment UK for beginners and give you some basic definitions you will need to know before starting.

If you’re already familiar with all the basics of UK property investing, then feel free to skip to chapter 2 to learn why you should invest in UK property in 2021.

Key Topics:

Property investment UK for beginners Property investment UK for beginners

Property Investment UK for Beginners 

What Is Property Investment? 

Put simply, property investment is the process of investing in property as an asset to generate income.  

There are many ways to get started with property investing in the UK, which is something we will discuss in chapter 4. 

For now, though, we will talk about the most common form of property investment in the UK, which is buy-to-let property. 

What is Buy-to-Let Property? 

Buy-to-Let property is the process of purchasing an investment property to let out to a tenant to generate income through rent.  

With buy-to-let property, you can manage the property yourself and find your own tenants as a landlord or use the services of a property management company that will handle all landlord duties for a monthly fee. 

You can have many tenants in buy-to-let real estate, including families, couples, elderly people, students, or even businesses. 

Buy-to-let real estate is by far the most popular investment strategy here in the UK. 

While there are plenty of reasons this is the case, perhaps the most exciting detail for investors is that you can earn two types of income. 

1. Rental Income 

This one’s obvious, but a tenant will pay you an agreed-upon fee called rent each month. 

2. Capital appreciation 

Less obvious but just as vital, capital appreciation is the increase in the value of a property over time.  

This is one of the most exciting parts of property investment, particularly for investors planning retirement, as you can rent out a property for decades and then sell it for a massive profit. 

What are the diferent types of investment property What are the diferent types of investment property

What Are the Different Types of Investment Property? 

While we will discuss the specific types of property investment in chapter 4, there are three distinct types of property investment here in the UK. 

1. Residential Property 

Residential properties are homes that are lived in by others. This means you can buy a property and then rent it out to a resident who will pay you a monthly fee. 

Types of properties you can buy that fit under the residential property bracket include apartments, townhouses, and more.  

We will cover different forms of residential property in greater detail in chapter 4. 

2. Commercial Property 

While you may instinctively think of residential property as an income-generating property, there is also commercial property to consider. 

Commercial property is very much like residential property, except you rent solely to businesses or corporations. 

Due to the properties being larger, building work and maintenance can be more expensive for landlords. 

However, this is offset by the fact that commercial property commands higher rent. 

Types of commercial property you could consider include commercially owned apartment buildings and retail stores. 

3. Mixed-Use Property 

The final type of investment property is a property that features both commercial and residential attributes. 

In practical terms, this means a property that houses both a commercial unit and residential living space. 

For instance, in the UK, shops like convenience stores often feature residents living above them, which will fall under the bracket of a mixed-use property. 

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Learn the basics of property investment UK Learn the basics of property investment UK

What Are the Basic Definitions for Property Investment UK? 

We will use some jargon in this guide, so if you aren’t well acquainted with property investment, you may be slightly confused. 

Not to fear, though, as below we have a list of common terms and phrases you should know when investing in property.  

  • Base Rate – The Bank of England’s rate of interest. Usually used as a benchmark by other mortgage lenders. 
  • Bridging Loan – A short-term loan that allows a person to buy a property before selling their current one. 
  • Capital – The amount of money invested into an asset. Sometimes known as equity. 
  • Exchange of Contracts – When the buyer and seller of a property sign a contract to make the sale official. 
  • Freehold – A form of property ownership where the buyer owns both the land and the property. 
  • Ground Rent – A yearly charge paid by the owner of a property to the landowner. In other terms, the leaseholder pays an annual amount to the freeholder. 
  • Land Registry – A government office that records the holding of land ownership. When a property is sold, the buyer pays a small fee to the Land Registry office. 
  • Lease – A document that allows a party to rent a property owned by another party for a set length of time. 
  • Leasehold – A form of property ownership where the buyer owns the property (but not the land) for a set time agreed upon with the landowner (freeholder). 
  • Maintenance Charge – A charge that covers the cost of insurance and maintenance of a property. The charge is typically implemented on leasehold properties like apartments. 
  • Rental Yield – The return on investment earned through rental income. It is calculated by dividing the annual income by the original purchase price and multiplying by 100 for a percentage.  
  • Rent Arrears – The money owed by a tenant when they miss a rental payment. 
  • Stamp Duty Land Tax – A tax paid on the purchase price of a property in England and Northern Ireland.  
  • Tenancy – The agreed tenant possession of a property set out under the terms of a lease. 
  • Void Periods – A period of time when a property doesn’t generate rental income as it is vacant. 
What are the risks of investing in UK property What are the risks of investing in UK real estate

What Are the Risks of Investing in UK Real Estate? 

As with any investment, there are going to be risks involved in property investment. 

While there are plenty of reasons you should invest in property, with the ability to earn two lucrative forms of income, it’s vital to assess the risks involved and see if an investment is the right thing for you. 

  1. Fluctuating property prices – Property is a long-term strategy, but this means in the short term, prices can heavily fluctuate. You will need to hold off selling your property and wait for several years before deciding to cash in. 
  2. Void periods – You may struggle to find a tenant and not earn any income to deal with mortgage payments or maintenance costs. 
  3. Tying your money up – property isn’t liquid and can’t be sold quickly. You will need to accept that your money will be tied up in an asset for an extended period. 
  4. Added costs – Property ownership can incur plenty of extra costs like taxes, which you should be aware of. See chapter 4 for more details. 

If you think you can deal with the risks involved, then property investment can be a fantastic solution to help generate income. 

Move on to chapter 2 to find out why UK residential real estate is an excellent choice in 2021. 

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Why should you invest in property in 2021 Why should you invest in property in 2021

Chapter 2: Why Should You Invest in Property Investment UK 2021? 

This chapter will discuss exactly why you should invest in UK property in 2021 through a data-driven and analytical approach. 

If you’ve already decided to invest in property, feel free to skip to chapter 3, where we will identify the absolute best places to invest in UK real estate. 

Key Topics: 

Why Should You Consider Property Investment in the UK? (6 Reasons) 

Now that you know what property investment is, you may be unsure why you should bother with it in the first place. 

After all, with the stock market and cryptocurrency the talk of the town, you may feel like property investment is old-fashioned and can’t deliver the highs of investing in futuristic concepts like Bitcoin. 

And sure, while property is undoubtedly more old-fashioned than the (somewhat confusing) world of Bitcoin, it’s an old favourite for a reason. 

Offering a strong long-term investment, property investment can sustain a consistent and reliable income for several years with minimal risk or pressure. 

With this in mind, let’s take a look at six compelling reasons why you should invest in UK property in 2021. 

Data: Land Registry – August 2021  

 

1. UK House Prices Are Growing Fast

One of the big reasons behind the appeal of investing in UK real estate is capital appreciation. 

If you’re planning for retirement, being able to collect a considerable cash injection upon the sale of your property is an incredibly exciting prospect. 

And good news for investors as the UK property market is currently booming in this regard. 

The latest house price data from the Land Registry in May 2021 values the average UK home at £254,624. 

This means in the last 12 months alone, house prices have increased by 9.98%. 

Contextually, this is an incredible achievement given the fact the UK has suffered the biggest drop in economic output in 300 years in 2020 due to the Covid-19 pandemic and (now) three national lockdowns. 

Most investment classes have struggled since the UK’s first lockdown, with the likes of the stock market seeing the third-worst day in its history after the Dow Jones dropped 3000 points. 

However, property prices have continued to rise, performing strongly in times of uncertainty due to the sky-high demand seen in the UK. 

Despite the pressures of Brexit and now Covid-19, property prices have increased by over £43,000 since 2016.  

Looking back even further, over the last 20 years, prices have increased by 163.86%, with the likes of Manchester seeing prices rise by over 326%. 

And this growth is set to continue deep into the future, with the latest price predictions from Savills finding that UK prices are set to rise by a further 21.5% by 2025. 

Data: HomeLet Rental Index – August 2021

2. Rental Prices Increasing at Consistent Rate 

Like house prices, rental values are also rising across the United Kingdom.  

As of July 2021, the HomeLet Rental Index recorded an average national rent of £1,029. 

This is significant as this is the highest-ever recorded rent by HomeLet and is 6.6% higher than the same time last year.  

Rental prices increasing are crucial for investors as it directly impacts the potential to earn income. 

And this growth is set to continue. A report from JLL has predicted an 8.5% rise in average rent by 2025.  

Over the same period, Savills has estimated a more substantial 17% rise in rental values. 

Whatever prediction you choose to believe, rental prices will continue to rise in the coming months and years. 

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City regeneration City regeneration

3. UK Regeneration Improving City Investments 

A major component behind rising market data has been the level of regeneration seen in the UK. 

Many UK cities, particularly in the North of England, economically struggled in the 1980s as the economy changed from manufacturing to more modern, tech-centric industries. 

This left many cities run-down, with few job opportunities to attract aspiring professionals. 

However, billions have been spent promoting growth in cities like Liverpool, Manchester, Birmingham, and Leeds in recent decades. 

By increasing the quality of living spaces, offering exciting job opportunities, and improving local amenities like transport and shopping, UK regeneration has been vital in the UK property market’s success. 

It’s also placed the UK on the global stage as an investment paradise.  

For several years, foreign investment has been incredibly high in the UK nations, particularly from East Asian sources like China and Hong Kong. 

In fact, foreign direct investment, otherwise known as FDI, reached a gigantic peak of £1.5 trillion back in 2018 – a strong sign of the UK’s appeal to investors. 

While we will go into specific city projects in chapter 3, the bottom line is high regeneration is good news for investors as it means an increase in property prices, rent, and rental demand. 

Average Time to Secure a Property Buyer in the UK (in Days)

4. UK Property Generates Incredible Demand  

UK demand in recent years has reached quite startling levels, much to the surprise of many industry experts. 

As the UK entered its first lockdown in March 2020, many commentators and analysts anticipated a considerable market drop with little to no demand for property. 

However, this was proved not to be the case, with 2020 seeing a historic rise in those wanting to buy or move into new homes. 

According to a report from Rightmove in April 2021, the property portal saw a buying frenzy for new houses. The average number of days taken to sell a property reached its lowest ever level. 

In fact, over two billion minutes were spent on Rightmove in March 2021, the highest ever figure over one month. 

Zoopla has anticipated this surging demand for property will last into 2022, with many buyers eager to change homes after being cooped up in their living spaces for the majority of 2020. 

One of the most significant contributing factors to the speed at which properties are being sold is the severe undersupply of property in the UK. 

Simply put, people want new homes, but there isn’t enough to go around, with the highest imbalance between supply and demand found in the North, according to Rightmove. 

In Manchester, a Zoopla report in 2020 found that the current ratio between supply and demand was 1:5, meaning five parties need a new home for every single property. 

This has led to a sustained increase in property prices, making new builds an even hotter commodity in 2021. 

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5. Save Thousands in the Stamp Duty Holiday Until October 2021 

While undersupply of UK real estate has been a driving factor behind the quick market activity, the main reason behind 2020 and 2021’s marked increase in buyer interest is the Stamp Duty Land Tax Holiday.  

Introduced back in July 2020 to promote market activity despite Covid-19, the holiday allowed investors to save £15,000. 

Although the holiday officially ended at the end of June 2021, there are still cut tax rates until October 2021. 

Those buying a second home to rent out will pay a 3% charge on the first £250,000 of the property’s price. 

As of the 1st of October 2021, the threshold will change to £125,000, meaning you will likely spend far more on your property purchases later in the year, making now an ideal time to take the plunge and invest. 

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6. All Living Trends Point to Renting 

If you’re looking to invest for the future, you can feel safe knowing that the future is renting.  

Here in the UK, the number of people classed as Generation Rent is continuing to rise. 

Generally used to describe those aged 18 to 34, Generation Rent represents a generation of younger people forced to rent as they can’t afford the rising costs of new homes. 

While money is certainly a factor in this, many studies have found that renting is a lifestyle choice. 

In June 2020, a report from Savills found that half of those who answered a survey said that if they couldn’t find a property to buy within six months, they would happily choose to rent. 

Surprisingly, renting isn’t just the future for younger people, either. 

A report from The Guardian found that there are currently over 400,000 over-60s living in private rented accommodation, which is a 60% increase over 2007. 

Further research in the same report has predicted that roughly one-third of over 60s will be privately renting by 2040 – a symptom of rising divorce rates and high property prices. 

This means if you can afford to buy an investment property, you will likely find a steady influx of residents far into the future, making it one of the safest and more secure investments you can make in 2021 and beyond. 

Is property a good investment in 2021 Is property a good investment in 2021

Is Property a Good Investment in 2021? 

Now that we’ve looked at the reasons behind why you might consider investing in UK property, one question remains: should you invest now? 

After all, what’s the rush? 

Well, not only is now a good time to invest, but it’s also likely the best time to invest in the foreseeable future. 

This is for two main reasons.  

  1. The stamp duty holiday is likely a once-in-a-lifetime cut, and, at the time of writing this, you only have two months to find your ideal property and complete the deal. 
  2. Property prices are only going to continue to rise. 

Property prices continue to climb and climb, and there are no real signs of it ever stopping. 

This means that now is likely the most affordable time you’re going to find a property to invest in. 

If you have a smaller budget, particularly less than £200,000, now is the ideal time to get investing before prices rise by over 21% in the next four years. 

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Best locations for UK property investment Best locations for UK property investment

Chapter 3: The Best Locations for UK Property Investment  

In this chapter, we take a deep dive into the best locations you should consider for your UK property investment. 

We will take an analytical approach to help you find cities with the best return potential for now and for the future. 

If you have already picked out your ideal location, check out chapter 4 to learn about the best investment methods to give you the highest returns. 

Alternatively, you can also skip straight to chapter 5 as we show you the latest investment property for sale in the UK. 

Key Topics: 

How to evaluate a city's investment potential How to evaluate a city's investment potential

How to Evaluate a City’s Investment Potential 

Like with any investment, knowing what you should be looking for is handy. 

While property investment certainly has a learning curve, there are some easy ways you can get the ball rolling and decide if a city or region is somewhere you want to invest. 

This is where this list comes in. 

Here, we have analysed the latest market data to pinpoint the highest returning locations in the UK. 

To help support your own research, we will show you our rationale and methodology here. 

Methodology

Firstly, we have used the latest house data available from the UK House Price Index to see how affordable a location is and compare it to the national average and other cities. 

The UK House Price Index is from the Land Registry, so you can trust its data.  

Notably, though, the Index doesn’t show specific postcodes, so you may not get the most accurate possible data for where you want to invest. 

Thankfully this is where Zoopla comes in.  

Using Zoopla, we can find the average rents for each UK city and combine them with Land Registry data to work out average rental yields (the return on investment earned through rent). 

The great thing about Zoopla is you can pinpoint specific postcodes, which can often be far more lucrative than a general city average. 

House price data changes fast, so be sure to conduct your research using your own sources, or the sources mentioned, to truly get an accurate and up-to-date assessment of an area. 

Rationale

As part of our thinking, we have used a list of assessment criteria that show the quality of an investment city. 

If you are doing your own research, thinking about this list of criteria is essential for a successful investment. 

These ranking factors are: 

  • Affordability 
  • Rental Yields 
  • Growth Potential 
  • Tenant Demand 
  • Regeneration 
  • Career Opportunities 
  • Transport Links 
  • Amenities 

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The Top 3 Best Places for Property Investment UK 2021 

Liverpool Properties Liverpool Properties

Liverpool 

Summary: 

  • Potential rental returns of over 10%. 
  • Property prices are nearly £100,000 cheaper than the UK average. 
  • Home to over 70,000 students. 
  • Regeneration hub with new Liverpool Waters project costing £5.5bn. 

After an explosive year for the property market, Liverpool has risen to the top as one of the best locations for UK property investment. 

With average property prices of just £158,173, the Merseyside city is one of the most affordable in the UK. 

You get a lot of bang for your buck with this cash investment, too. 

The city has an expansive rental market that generates tonnes of interest from young professionals and students. 

Around 75% of its city centre is aged 17-29, with approximately 70,000 students calling the city home. 

 

On the surface, the city’s rental yields may seem unappealing, especially when considering the highs of other cities. 

However, Liverpool is a fantastic example of why looking into specific postcodes is a good idea. 

TotallyMoney has found that Liverpool is home to the highest-yielding postcode in the UK, with the L1 postcode capable of delivering returns upwards of 10% 

With further regeneration efforts planned, including the £5.5 billion Liverpool Waters project, the city is only going to continue to grow. 

Property prices increased by nearly 20% in the last 12 months – the highest of major UK cities. 

Moreover, Savills’ latest predictions have found that the North West region has the joint-highest predicted price growth in the UK of 28.0% by 2025. 

There’s simply never been a better time to invest in Liverpool and find Liverpool buy to let. If the city sounds interesting to you, be sure to check out our Liverpool property investment guide for more details. 

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Manchester Properties Manchester Properties

Manchester 

Summary: 

  • Property prices increased by 326% since 2001. 
  • 59% of the population is aged under 35. 
  • Home to 100,000 students with nearly 20,000 international students. 
  • City-wide tram system and future HS2 plans for Manchester Piccadilly. 

For the past few years, Manchester has gained the reputation as arguably the single best place to invest in property. 

The city is the king of capital growth, offering the highest 20-year growth curve out of every major UK city. 

Manchester is also surprisingly affordable, sitting comfortably below the UK average with current prices valued at £196,333. 

Not only this, but Manchester also boasts incredibly high rental yields, with sky-high averages of over 7%. 

Plus, when you factor in local rental demand, you can see why so many people choose to invest in Manchester in 2021. 

 

Over 100,000 students currently live in Manchester, with the city boasting the second-highest student retention rate in the UK of 51%. 

So many students are choosing to stay and work in the North West city due to the fantastic living experience. 

Locations like Spinningfields and MediaCityUK offer fantastic employment opportunities. At the same time, excellent restaurants and nightlife experiences make it a dream place to live. 

Factoring in other regeneration, including the HS2 expansion of Manchester Piccadilly, and now seems like an ideal time to start investing in Manchester buy to let. 

If you want to find Manchester buy to let and invest in Manchester, read our complete comprehensive guide to Manchester property investment to learn more. 

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Birmingham Properties Birmingham Properties

Birmingham 

Summary: 

  • 25.2% rise in rental demand in 2021. 
  • 40% of the population is aged under 25. 
  • Largest business and finance hub outside of London. 
  • New HS2 station reducing travel time to London to <50 minutes. 

If you’re looking to invest outside of the North and want a more central location, then Birmingham is perfect for you. 

Dubbed the UK’s second city due to its economic strength, it is currently leading the way for rental market growth in 2021. 

Between Q4 2020 and Q1 2021, rental demand in the city increased by 25.2%. In a report from Rightmove, the property company recently recorded a 51% rise in rental enquiries for the West Midlands city. 

Prices in the city are currently just above the £200,000 mark, with returns of 5.26% on average. 

 

While this may not seem enticing compared to Liverpool and Manchester, Birmingham offers some compelling market statistics that may boost rental yields soon. 

For starters, the rental market is propped up by an incredibly young population. 

Over 40% of those in the city are under 25, with over 100,000 students spread across five universities. 

The city also boasts fantastic employment opportunities, with HSBC, Deutsche Bank, and PwC acting as major employers in the area. 

Moreover, with the upcoming implementation of the Big City Plan, a regeneration scheme set to introduce 50,000 jobs, and the upcoming Curzon Street Station HS2 line, the future looks bright for this city. 

To get a deep look into Birmingham property investment, be sure to check out our detailed guide to see why you should invest in Birmingham buy to let in 2021. 

If you want to learn more about the best places to invest in UK property, we have a complete guide offering the top 10 best places to invest, as well as the best up-and-coming places for 2022 and beyond. 

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Chapter 4: How to Invest in UK Property 

Chapter 4 of our UK property investment guide will discuss the different methods you can use to invest in property. 

We will also be looking at how much money you need to invest in property, and the buying process, so you’re entirely ready to start a UK property investment. 

If you’ve decided how and where you want to invest, then skip to our final chapter to view the latest investment property for sale. 

Key Topics: 

How to Get into Property Investment UK: The Top 5 Property Investment Strategies 

Now that we’ve looked at the what, why, and where of property investment in the UK, it’s time to look at the how. 

Figuring out how you should invest in property can be far more complicated than it may first appear. 

This is because there are so many new and exciting ways to get into UK property. 

Luckily, we’re here to break down five of the most popular options to help you decide.  

Each strategy will also be given a pros and cons list to show why you should (or shouldn’t) invest with that method. 

Remember, though, the strategy you choose will depend highly on your own personal circumstances, including available finances, and if you want a short or long-term strategy. 

1. Single Let Property – Residential Buy-to-Let 

The benchmark for UK property investment, traditional buy to let is likely the first strategy that comes to mind when investing in property. 

A single let property is a property you rent to one tenant – such as a family or an individual. 

Single let properties and traditional residential buy to let is likely the most popular form of property investment as it’s easy to understand and get started with. 

Simply put, you just need to buy a property and find a tenant to get started. 

You can make the perfect residential buy to let investment in just four steps. 

1. Research the best area for investment (see chapter 3 for more details). 

2. Find an attractive property equipped with modern amenities in that area. 

3. Find the right tenant. 

4. Move your tenant in and earn monthly rent! 

Top tip: You should target city-centre locations and young professionals for the most lucrative opportunities. This could mean you target new-build homes or stylish apartments near transport links to attract your tenants.

Pros 

  • Easy to understand and get started with.
  • High potential to earn strong yields if investing in the right area.
  • Can sell the property down the line for huge capital appreciation.
  • It can be completely hands-off with a property management company.
  • Less risky and performs well in times of uncertainty.

Cons 

  • A long-term strategy to allow capital appreciation, so not ideal for those looking for quick returns.
  • Potential void periods if you fail to find a tenant.

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Shaw Street Shaw Street

2. Student Property Investment – HMOs and PBSA 

Student property investment is incredibly similar to traditional buy to let property, except that you focus solely on students. 

You can target the student market in two main ways, through HMOs or purpose-built student accommodation. 

HMOs 

Houses in multiple occupancies, otherwise known as HMOs, are properties where each room is rented to a different tenant. 

These tenants often share some amenities, like a kitchen or bathroom, but individually pay rent. 

HMOs can be tricky, especially for beginners.  

With more tenants comes more potential wear and tear and more time spent managing the property. 

Similarly, HMOs are subject to stringent rules and laws, with many cities’ trying to limit the rise of HMO conversions.  

Pros: 

  • More rental income as multiple tenants.
  • Less chance of void periods as more than one tenant.
  • Potential for capital appreciation.

Cons: 

  • Strict rules and legislation are in place.
  • Smaller market when trying to sell as only other investors will be interested.
  • Difficult to secure a mortgage.
  • More wear and tear, so higher maintenance costs.
Element - The Quarter Element - The Quarter

Purpose-Built Student Accommodation 

Requiring less of an explanation than HMOs, purpose-built student accommodation is student property that has been specifically designed to house students. 

PBSA has shot up in popularity in recent years thanks to offering investors a reliable income stream during the academic year. 

Students have become more and more likely to want higher-quality modern living spaces, putting many students off from living in older HMOs. 

This is why PBSA is ideal for students, as it has been built specifically to cater to these needs. 

There’s also less time needed to manage the property, as most student accommodation comes equipped with its own management team, allowing a completely hands-off investment. 

Top Tip: It’s a good idea to invest in student hotspots with a high number of students, high-quality universities, and a good retention rate. Popular student cities include Liverpool, Manchester, Birmingham, Newcastle, and London.

Pros: 

  • Apartments are smaller, so much more affordable.
  • Low property prices and high rent means high rental yields.
  • Consistent and predictable tenant cycle.
  • It can be a completely hands-off investment.
  • Potential for capital appreciation.

Cons: 

  • Less capital appreciation than single buy to let.
  • Limited to one tenant group.

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3. Off Plan Buy-to-Let Property 

Off-plan property is a property that is available to purchase but hasn’t been completed. This means you can buy the property while it’s under construction or still in the planning stage. 

You can buy both residential and student property off the plan. 

It may seem like an odd idea to invest in an asset that hasn’t yet been completed, but there are four distinct reasons why many investors opt for off-plan property. 

  1. Properties are sold at below-market rates as an incentive for investors. 
  2. If you buy with a property investment company, you can get assured rental income for several years. 
  3. Your property can increase in value before it’s even been completed. 
  4. You will get a brand-new cutting-edge property that hasn’t been lived in. 

However, the obvious downside is when buying off plan property, you will have to wait until the property has reached completion before you can start seeing returns on your investment. 

However, if you’re patient enough, off-plan is the perfect investment for those looking to maximise their earnings and save money. 

Top tip: Invest with a property investment company. This way, you can get assured rental yields and get extra incentives like free furniture packs for your property.

Pros: 

  • Properties are sold at below-market rates.
  • Potential to get assured rental yields.
  • Higher room for capital growth due to lower prices.
  • You will get a brand-new property.
  • Extra deals, including free furniture packs.
  • Can cherry-pick the best units in a new development.

Cons:  

  • Can have difficulties securing a mortgage.
  • It will often require a cash deposit.
  • Have to wait for the property to be finished.
  • Due diligence is required to ensure the developer is reliable.

4. Buy-to-Sell/House Flipping 

Perhaps the most challenging property investment strategy for beginners, buy to sell is the process of buying a house to sell on for a quick profit. 

This means an investor will not rely on rental yields, rental income, or tenants and will look to buy a cheaper property to sell for a considerable profit. 

This can be difficult for two reasons. 

  1. You’ll need to be able to identify properties with the potential to earn a considerable profit. 
  2. After finding this property, you may need to give it a fresh makeover, which could mean getting started with property development. 

Many people get into property to get a consistent stream of reliable income.  

However, house flipping does not offer this benefit, as you will only be making money when you’re working. 

For this reason, if you’re a beginner, this method may not be ideal for you. 

Top Tip: Crunch the numbers before you start your investment. House flipping can go wrong and eat up a budget, so plan out your venture carefully to prepare for all eventualities.

Pros: 

  • Ideal for those looking for a short-term investment who want quicker returns.
  • No landlord duties or tenants to find.

Cons: 

  • No passive income.
  • Incredibly hands-on process.
  • If things go wrong, it can be incredibly costly.

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5. Property on the Stock Market – REITs 

A more indirect way of investing in property, using the stock market can be a lucrative strategy. 

Investors can invest in property on the stock market through real estate investment trusts, otherwise known as REITs. 

Real estate investment trusts buy, manage, and own properties on behalf of their shareholders. 

They utilise a mutual funds model, where the company uses the money pooled from investors to buy up real estate. 

Noteworthy for investors, these companies must give at least 90% of their income to shareholders to be classed as a REIT. 

However, REITs work like any other company on the stock market, which brings the pros and cons of stock investment. 

Pros: 

  • Liquid asset.
  • Easy to diversify your property portfolio.
  • More affordable entry point.

Cons: 

  • Works like other stocks, so prices can fluctuate constantly.
  • Less return potential than traditional methods.
  • Less room for capital appreciation.

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Other Investment Strategies Worth Considering 

While they didn’t make our list of the top 5 best investment strategies, there are plenty of alternative methods out there that may be worth your consideration. 

This includes: 

  • Holiday home investments. 
  • Overseas property investment. 
  • Property development. 
  • Property investing crowdfunding. 
  • Commercial property investment. 

You can check out a complete list of 10 investment strategies in our property investment strategies guide. 

Alternatively, if you’re more focused on property development, be sure to read our step-by-step guide to becoming a property developer. 

Best investment strategies Best investment strategies

What is the Best Property Investment Strategy? 

Many people ask what the best property investment strategy is, but unfortunately, there isn’t a definitive answer for everyone. 

First and foremost, property is an incredibly personal experience, and what you want out of an investment will directly correlate with what strategy you choose. 

If you’re looking for a long-term sustainable strategy, then residential and student buy to let is likely for you. 

If you have less money available right now and are willing to wait to get your hands on the keys, then off-plan property is ideal. 

But if you’re looking for a shorter-term investment, then Real Estate Investment Trusts are ideal. 

However, for our money, the current best property investment strategy for the highest returns is likely buying residential or student property off-plan. 

This is because you get the benefits of reliable monthly rental income and capital appreciation, as well as being able to save thousands by buying off the plan. 

Are You Ready for a Property Investment in the UK? 

Before starting your property investment UK journey, it’s essential to ask if you’re ready for the investment. 

Property can be a big responsibility, and there are plenty of additional costs you need to consider, including maintenance costs and taxes. 

You will also have responsibilities, particularly if you decide to manage the property yourself and become a landlord. 

Property, particularly buy-to-let, is a long-term investment. You will need to prepare yourself to be in the business for the long run. 

The following sections will aim to provide a comprehensive list of what you can expect in property investment.  

This includes the costs involved, how to finance an investment, and a step-by-step guide to the sales process. 

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How Much Money Do You Need to Invest in Property? 

The cost of property investment can be split into three different categories. 

1. The direct costs of purchasing a property. 

2. The ongoing costs of owning a property. 

3. The costs upon the sale of the property 

Let’s take a look at each in turn, so you get a comprehensive look. 

The Direct Costs of Purchasing a Property  

Aside from purchasing your property, which the current UK average is around £250,000, you will also encounter a potential list of expenses. 

These are: 

  • Legal fees. 
  • Survey fees like a snagging survey. 
  • Landlord insurance/ buy to let insurance. 
  • Stamp duty tax. 
  • Land Registry fees. 
  • Mortgage fees. 
  • Auction fees. 

The Ongoing Costs of Owning a Property 

The following costs you will expect to encounter during the length of your property ownership. 

They are: 

  • Mortgage interest rates. 
  • Ground rent. 
  • Property management fees. 
  • Maintenance costs. 
  • Corporation tax if you form a limited company. 
  • Landlord insurance/ buy to let insurance. 
  • Rental income tax. 

The Costs on the Sale of the Property 

Finally, we have the costs involved when you finally decide to sell your property. 

This includes: 

  • Capital gains tax. 
  • Estate agent fees. 
  • Legal fees. 

To get a deeper look into the money involved with property investment, be sure to check out our guide to how much money you need to invest in property. 

If you want to know more about the types of taxes you will encounter during your UK property investment, look at our complete guide to buy to let tax. 

How to Invest in Property With No Money UK? 

If you’re thinking of starting a 2021 property investment in the UK with no money, you may encounter some problems. 

Buying UK real estate isn’t cheap, and if you want the highest returns possible, you may struggle to find an ideal investment. 

If you have a smaller budget of 50k, for instance, it’s possible to make a lucrative investment still if you invest in off-plan property. 

However, if you have very little money, you can always trade property stocks such as REITs. It’s important to note, though, that your returns won’t be sizeable. 

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How to Finance a Property for Investment? 

When buying UK real estate, you have a few options on how you can finance the venture. 

  1. Finance the deal yourself 
  2. Buy-to-let mortgage 
  3. Bridging loan 
  4. Remortgage your current property 

If you’re new to property investment, you may not realise that buy-to-let mortgages are slightly different from more traditional mortgages. 

With this in mind, we’re going to take a deep look at buy-to-let mortgages so you know what to expect. 

Buy-to-Let Mortgages 

While similar to traditional residential mortgages, there are some distinct differences between BTL mortgages that investors need to know. 

  1. Buy to let mortgages are interest-only, which means you will only pay the loan’s interest every month without touching the overall debt. 
  2. BTL mortgages are more expensive, with a deposit between 25-40%. 

The amount of money you can borrow also depends on your rental income. 

Typically, mortgage lenders require your income to be about 25 or 30% higher than the monthly interest payments. 

In practical terms, if your interest payments will be £700, you will need to earn between £875 to £910 in rent per month. 

For a full deep dive into buy to let mortgages check out our complete 2021 guide. 

How to Buy Property in the UK: The Sales Process 

Now that you know how to invest in property, let’s look at the typical sales process you can expect when buying property in the UK. 

  • Step 1 – Find a property and make an offer. 
  • Step 2 – Have offer accepted. 
  • Step 3 – Secure a mortgage. 
  • Step 4 – Hire a conveyancer. 
  • Step 5 – Provide your deposit. 
  • Step 6 – Exchange contracts. 
  • Step 7 – Complete your sale and get the keys. 
  • Step 8 – Pay legal fees and stamp duty tax. 
  • Step 9 – Find suitable tenants and organise the tenancy deposit, which must be registered with the Deposit Protection Scheme. 
  • Step 10 – Sign the tenancy agreement and move your tenants in. 

Some of these steps can change depending on if you invest through a property investment company. 

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What are property investment companies UK What are property investment companies UK

What Are Property Investment Companies UK? 

Property investment companies are an increasingly popular way to invest in property, particularly for beginners looking for a hassle-free experience. 

Simply put, investment companies help investors buy properties. 

Not only do they guide you through the entire purchase process, but they also provide solicitors and find property management companies for you. 

Investment companies often specialise in a particular property type, so you should aim to invest with a company that provides the investment property you want. 

For instance, RWinvest is a property investment company, and we specialise in off-plan residential and student property. 

If you want an easier experience investing in UK property, then investment companies can be an excellent choice to take the load off and handle most of the investment for you. 

Pros 

  • A huge time saver searching for property.
  • Identify income-generating property for you.
  • They can help you find a reliable property management company.
  • Savings on offer as an incentive to invest.
  • Exclusive deals and properties.
  • Payment plans to make it easier to invest.
  • Some companies offer assured returns for a set number of years.
  • Most legal documents and paperwork are handled by the company.

Cons 

  • Miss out on a hands-on experience.
  • Fewer options than auctions or property portals.

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Investment Property UK for sale Investment Property UK for sale

Chapter 5: Investment Property UK for Sale 

Our final chapter will look at the latest investment property for sale in the UK, available from RWinvest. 

Here, you will find our hottest releases and learn about their prices, return potential, locations, and more. 

Key Topics: 

Investment property for sale Investment property for sale

Investment Property UK for Sale 

Ready to find investment property UK? 

Here at RWinvest, we have some exciting investment properties currently on the UK market. 

With assured returns of up to 8%, and prices starting from only £69,995, you can make a fantastic investment in the UK’s top locations like Liverpool, Manchester, Birmingham, Slough, and Luton. 

What are you waiting for? Look at our fantastic investment property UK releases for 2021 and beyond now. 

Start Your Investment Journey From Only £34k 

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Highlighted Stock - Investment Properties UK

ELEMENT – The Quarter 

Prices from £74,950 

Assured 8% Returns

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Liverpool’s first eco-development, ELEMENT – The Quarter is one of the most exciting developments we’ve ever offered. 

Located in the thriving Knowledge Quarter, and mere minutes away from the Royal Liverpool University Hospital, The Quarter is the perfect property for young professionals and students in the area. 

The Quarter is the first property under the ELEMENT brand from Nexus Residential and aims to revolutionize the future of residential property. 

Equipped with pioneering eco-saving technology, including a central server capable of regulating temperature, ELEMENT – The Quarter has dominated local news stories and is set to be hit amongst investors and tenants alike. 

Don’t miss out on this incredible new project. Enquire today for a free furniture pack worth £5,000. 

The Summit 

Prices from £139,950 

7% Rental Yields 

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Located in Liverpool’s coolest place to live, The Summit is a stunning new residential development in the heart of the Baltic Triangle. 

Developed by the award-winning Legacie Developments, the Summit offers the pinnacle of luxury in Liverpool’s thriving rental market. 

From high-quality fixtures to luxury flooring and tiling, The Summit can be purchased at a staggering 20% below market value. 

On top of this, The Summit boasts some seriously premium facilities, making it an ideal place to live. 

These fantastic facilities include: 

  • Fully-equipped on-site gym 
  • Rooftop terrace 
  • Access to rooftop pool and spa 
  • On-site reception and concierge  
  • Private meeting room and work from home area 

Each facility has been carefully selected to meet the growing demands of tenants. 

If you want to secure this fantastic property at 20% below market value, then enquire today. 

Snow Hill Wharf  

Prices from £227,500 

5% Projected Rental Returns 

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Snow Hill Wharf is a brand-new community in the heart of Birmingham city centre. 

Made up of five iconic new developments, the project delivers unrivalled luxury at affordable prices in this thriving West Midlands city. 

These stunning canal-side apartments have been carefully designed by a talented team of interior designers to provide tenants with a stylish and contemporary home they can be proud of. 

With ultra-modern facilities like a 24-hour concierge, gym, sauna, and cinema room, Snow Hill Wharf is the ultimate Birmingham buy to let investment. 

Better yet, the development is located minutes away from Snow Hill and New Street stations, making it the perfect property for young professionals. 

Want to invest in this fantastic development? Enquire today while stocks last. 

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Who Is RWinvest? 

Now that you’ve looked at our latest offers, it’s time to explain a little about ourselves. 

We understand that trust means everything in an investment, so let’s look at who we are, what we do, and why you should invest with us. 

RWinvest is an award-winning property investment company specialising in residential and student property. 

We offer off-plan properties and already completed properties to over 75,000 investors. 

Since 2004, we have worked tirelessly to deliver the best investment properties on the market and have since gained nearly 1,000 five-star reviews. 

Our efforts have been noticed by investors worldwide, with RWinvest recently being awarded the title of the North West’s Best Property Business in 2020. 

In 2021, we were also nominated as Business of the Year in the prestigious Echo Regional Business Awards. 

RWinvest

Why Invest With RWinvest? 

If you’re looking for the best property deals on the UK market, then RWinvest is the clear choice for you. 

Not only do we deliver exclusive properties you won’t find anywhere else, but we also have an unmatched track record of delivering properties on time, on budget, and fully tenanted. 

But don’t take our word for it; take a look at some of our fantastic reviews so you can find out exactly why investing with RWinvest is the best choice any beginner investor can make. 

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How to buy property in the UK: The sales process How to buy property in the UK: The sales process

The RWinvest Sales Process 

Looking to buy investment properties in the UK with RWinvest? 

Take a look at our simple and easy sales process, so you know what to expect from your UK property investment. 

For a full breakdown in greater detail, be sure to check out our full sales process guide. 

1. The Sales Team 

The first step in our property investment journey is talking to the sales team. 

After you call up or register your interest in a property, one of our talented and hard-working sales staff will call or email you and discuss everything from your budget, area preference, or specific property you’re interested in. 

When you’ve decided what property you want to buy, you can then reserve it with our team to ensure your unit isn’t sold. 

All you need to do is fill in a reservation form and provide a reservation deposit. 

2. The Client Care Team 

After reserving your unit, you will then be passed onto our fantastic client care team. 

Here, your client care representative will help you tackle the next steps of the property journey, and will be there to help you every step of the way. 

Our client care teams will help you deal with all the legal aspects of your property purchase, including liaising with solicitors, and will take you all the way to the exchange stage. 

This means once you’ve paid all the fees needed and exchange your contracts, you will finally own your property. 

But the care RWinvest provides doesn’t just stop upon exchange. 

3. The Post-Sales Team 

After your property purchase, a member of the post-sales team will contact you via call or email. 

Here, the team will give every client a bespoke service, offer monthly catch-up calls, quarterly construction updates, and organise viewings and meetings for your off-plan property. 

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Want More Property Investment News and Guides?

If you want more property investment UK news, or more beginner-friendly guides, RWinvest is the ultimate source of property investment knowledge. 

On our website, you will find everything property investment, including: 

And so much more! 

Be sure to follow all of our social channels to see our latest releases, or sign up to our mailing list to get the latest news and property investment opportunities straight to your email inbox.  

Start Your Property Investment UK Journey Today 

This concludes our ultimate property investment UK guide. 

We hope you’ve enjoyed the journey and have learned everything you need to start your investment journey. 

If you feel ready and prepared to take the next steps in your journey, then why not speak to one of our fantastic property experts today. 

Just click the blue speech bubble in the bottom right corner of the page to organise a fun and friendly chat with our team. 

They will then advise and guide you through the beginning steps of the property journey and help you find your dream property. 

Start your property investment UK journey today with RWinvest, the UK’s leading investment company.