Useful Ways to Ensure You Earn High Profits in UK Property

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Tips for Potentially Maximising Profits in the UK Housing Market

As a property investor, you’ll want to ensure you purchase properties that earn you the highest profit. After all, this is why most investors get into the property market in the first place.

However, buy-to-let investors should consider numerous things to give themselves the best chance to earn a significant profit.

From the time to hold a property to regeneration potential, we’ll look at some factors that can affect how much you make on your property investment. Why not read the latest ultimate fuide to how to buy a buy to let property.

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Hold Properties for Long-Term

The UK property market has proved – time and time again – to be resilient in the face of adversity.

During the past year, the economy has endured high inflation, soaring interest rates and elevated mortgage rates. However, despite all that, the market performed better than expected. While forecasters predicted a significant decline in property prices in 2023, some house price indices saw prices increase. For example, the Halifax House Price Index noted a 1.7% rise in house prices last year.

Many forecasters say that the last 12 months served as a market correction following an extended period of unsustainable growth during and immediately after the COVID-19 Pandemic.

What can this teach us about property investment? It’s that knee-jerk reactions may not yield the highest profits.

Patient investors should see their properties appreciate over time, provided they’ve invested in strategic locations with good growth potential. If you were to sell at the first sign of trouble, your profits may be negligible or even non-existent.

According to HM Land Registry, the average UK property price has risen from £136,167 to £284,691 in 20 years – an increase of almost £150,000. While there may be some short-term dips, properties appreciate over time. As such, you may earn significant profits if you can hold your property for a considerable period.

Discover More: With our comprehensive guides, we run through some of the best things to invest in right now and provide various property investment tips.

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Consider Cheaper Properties to Diversify Investment

Investing in property always comes with an element of risk. No investor can guarantee their desired profits. However, they can diversify their portfolios, spreading the risk of property investment.

If you plan on building a buy-to-let portfolio, you’ll want to add multiple properties to your inventory. However, unless you’re incredibly wealthy, you may not be able to build a portfolio with London properties, where the average property price dwarfs the national average.

As such, you may want to invest in areas where good-value properties are plentiful. For this reason, investors are looking further away from the capital, as they simply cannot keep up with the buy-to-let costs associated with London property investments.

By diversifying your portfolio with cheaper properties in popular areas, you’ll limit the impact of void periods, as you’ll still have income from other tenanted properties.

This thinking has led many investors to consider the North West and North East property markets, where property prices are considerably less than the national average.

Why not check out the latest guide to buying UK property from overseas with the RWinvest factsheet.

Look at Areas with Good Capital Growth Potential

Experts agree that investors need to monitor which UK regions are more likely to see substantial capital growth.

Resources like the Savills Residential Market Forecast can give you a good idea regarding a region’s capital growth potential. For instance, the North West, North East, the Midlands, and Yorkshire and The Humber are expected to see substantial capital growth by 2028.

Numerous factors can help contribute to capital growth, such as a healthy economy and good regeneration prospects.

If you are looking for an area to invest in with a good economy, look at Liverpool. According to a Data City study, Liverpool has the fastest-growing economy in the UK, even outpacing London, thanks to advancements in the logistics, software development, and business support services sectors.

The city has numerous regeneration success stories, including the Baltic Triangle and Knowledge Quarter.

The Baltic Triangle was once a disused hinterland on the border of the city centre. It has now been transformed into one of the coolest neighbourhoods in the world (per Time Out), attracting young professionals who want to enjoy the Baltic Triangle’s proximity to Liverpool’s central commercial hub and enjoy the thriving nightlife that has sprung up among the former warehouses in the area.

With plans to regenerate the Northern Quarter, Liverpool may go from strength to strength over the next decade. And, when it does, property prices may rise to match the growing demand for city centre accommodation.

We also provide insights into local buy-to-let markets, which may further help investors develop their investment strategies:

Author

Dale Barham

Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.