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A recent report has found that property investors seeking the highest rental yields are increasingly looking at newly built homes.
The property sector has seen a rising trend of mainly new-build and purpose-built properties cropping up more frequently.
But, whilst the benefits may seem clear, how do you get the best possible price on a newly built property?
One way for landlords or investors to combat the potentially high cost of a new build is to consider purchasing a property off the plan.
Off-plan property is a property that is available to buy despite not being finished yet. This means it can either be under construction still or is only in the planning stages.
On the surface, this can understandably seem quite risky.
However, so long as you take the time to research, off-plan is one of the more ideal forms of investment – especially for those seeking newly-constructed properties.
Buying off-plan is often cheaper in the UK than buying an existing property because developers will usually offer up a discounted sale price to counteract any underlying reservations on the investor’s part.
If you’re also patient enough, once construction is completed, you’ll be left with a shiny, brand-spanking-new building that has not been lived in or destroyed by previous tenants. All of which is sure to be an attractive quality for any prospective tenant looking to move in.
There has been an increasing demand for housing as of late.
However, with this need continually being outweighed by supply, there is still a yearning for more high-quality rental accommodation.
Consequently, this makes new build homes one of the most popular assets in the UK – specifically for those purposely built for renting.
House prices in the UK have made things even more difficult for first-time buyers to get onto the housing ladder, meaning many are renting until much later in life.
Recent changes in lifestyles have also shown increasing signs of people choosing to “rent for life”.
People enjoy more flexibility and being able to move quickly when new career prospects present themselves. Another rising trend is young people leaving London to relocate elsewhere, which often involves renting.
One of the most significant selling points of a new property is its aesthetic benefits – i.e., its fresh, modern design.
Those who favour a more contemporary look in their home, such as students or young professionals, are often drawn to stylish new-build houses and apartments.
This is excellent news because property investors need high rental demand for their venture to succeed.
By purchasing a property considered desirable by their target tenant, interest from renters will be higher.
And, with increased interest comes the potential for increased yield.
New-build rentals in the North-West region are estimated to generate an average yield of 4.4% for investors – a significant bit higher than the national average of 3.7%.
Alongside this, if you choose to go down this route, as off-plan properties are cheaper to buy, it also means that there is a stronger capacity for capital growth, meaning you can expect an even stronger capital percentage increase over the years.
Rightmove have recently predicted a property market boom following a record-breaking year in 2021, meaning now is the perfect time to get started.
Are you interested in investing in a new-build property? Discover more about this investment type and find out whether new builds increase in value over time by reading our helpful blog post.
Contact us today or check out our 2022 Guide to Investing in Off-Plan Property for more information.
Disclaimer: This content was originally written in March 2022. By the time you read it, some of the statistics used may have changed.
For the latest on the UK Property Market, take a look at our updated 2023 guides.
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Very good experience, was very concise and knowledgeable.
Ali Zardab
22 September
Adam and Joshua were brilliant! Very smooth process throughout the initial stages of purchase and helped at every step, even escalating matters that were not RW Invest matters to be dealt with. One point of feedback would be for RW invest in general is to seek alternate law firms on the documentation process as the experience with the one appointed was one I wouldn't recommend.
Hanish
22 September
Was kept informed throughout and someone always returned any missed calls timeously.
John McCullagh
22 September
I have purchased a property from RW Invest. Ryan Dunning was a great help to give great overview of the area and the financial analysis. He took time to explain everything in great detail. After reserving the property, Adam Burns has been a great help through the way, being a bridge between the solicitors and me, getting back with responses tp my questions very quickly. He was very diligent and made sure the process went smoothly. Thank you Ryan and Adam!
Banu
20 September
I consider RW Invest as an well established and informed investment property company that offers great guidance and service to its customers. As a customer you get e-mails regarding the process and documentation about the development. When you sign the contract you get a contact person who supports you by informing about the process, answering your questions and follow up on deadlines. Personally, I really appreciated it. For me it is all about convenience and business decisions. Thumbs up from my side
Stephan
18 September
