How to Get Into the Property Market 2024 [Expert Tips]

If you’re wondering how to get into property investment, in this article we cover some tips that can help you get started as well as grow your property business.

A property investor is involved in the ownership, rent and/or sale and management of real estate for profit. Overall, real estate performs well as an investment, tends to be less risky and volatile than the stock market and can be a good source of cash flow and capital gains if you invest in the right area and right property.

How to Get into UK Real Estate as a Property Investor

Buy-to-let investments are some of the best assets if you want to make money from property. Whether boosting your income with one or two properties or growing a property portfolio. As the owner of a property, you stand to benefit from any rise in value when it comes to selling – known as capital gains, and, at the same time, if you rent your property out to tenants, it can generate monthly rental income.

At the beginning of last year, there was a craze for buying homes, where buyers were eager to buy houses at prices higher than the listed ones. However, later in the summer, the real estate industry experienced a decline due to inflation and increasing mortgage rates. As per the statistics, in the 12 months leading up to December 2022, the average percentage change for UK house prices was 9.8%, which is slightly lower than the 10.6% in the 12 months leading up to November 2022 and 12.0% in the 12 months leading up to October 2022. The average house price in the UK was £294,000 in December 2022, which is £26,000 higher than it was 12 months ago.

Nevertheless, there’s definitely still money to be made in the property market. Real estate appreciation tends to happen in areas with growing populations (meaning property becomes scarcer) or where redevelopment is taking place (making the area more attractive to live in). There are plenty of towns and cities across the UK that currently meet these two criteria.

How Much Do You Need to Get Started?

Property values are predicted to rise by 2.5% by 2025, so now is a great time to take advantage of growth to get significant returns down the line.

If you’re wondering how to get into property investment, generally, the first step is to have enough to cover a downpayment on a mortgage (although you may be in the lucky position of being able to buy a property outright). Typical property finance options see lenders require at least 25% of the property price down, and sometimes a higher down payment of 30% may be required depending on the property and your financial situation.

While deposits can be quite high, there are a number of areas of the UK where it’s possible to find cheap property.  For example, in Liverpool, it’s possible to find a property for as little as 50k. 

House prices in Liverpool remain relatively low, but a housing boom in 2021 saw a 6.3% rise compared to 12 months previously, and the prices only continued to rise since then, with growing demand is pushing property prices up, so we’re unlikely to see prices go back to these low levels over the long term. Additionally, you’ll need to factor in the associated costs of purchasing a property, such as legal fees, stamp duty and estate agents.

Once you’ve covered the initial cost of purchase, it’s time to start thinking about how to make your investment work for you.

What are the Property Types Investors Should Consider?

There are a number of different property types that investors can look into for their first property. The type of property you choose will depend on your situation and goals.

Residential Property

Residential properties include houses, apartments and holiday homes where someone pays you to live in the property, with most leases on a 12-month basis. Residential property is the most popular strategy in UK real estate investing and housing is always in demand. 

It’s relatively easy to get started in residential property investment, and investors can earn two types of returns through monthly rent and capital growth.

Student Buy-to-Let

Student buy-to-let involves purchasing a property to exclusively rent out to students – either purpose-built student accommodation or a house of multiple occupancy. 

Often student houses are more affordable than normal residential investments and rent can be up to 20% higher, meaning returns can be significantly more. Although you are limited to one tenant group, if you invest in student accommodation in a university town you often see steady demand. Find out more about the benefits of investing in student property in this article.

Off Plan Properties 

Off-plan properties are those still in the construction stage. One benefit of off-plan properties is that they can often be had for below-market rates. In some cases, it’s possible to find an off-plan property at 20% – 50% below market value. 

Due to lower prices, there’s more room for capital growth, and some companies will even provide assured rental yields. Find out more about the benefits of off-plan property here.

Property Investment Tips for Beginners

If you’re ready to invest in property, there are a few pieces of advice that can help set you in good stead before making your first purchase.

Understand the Costs

Before you make a purchase, it’s important to understand all the associated costs. Buying a property outright can require a large amount of funds, but if you have the money or are willing to take out a mortgage, the returns can certainly be worth it. 

Making money from your investment does take effort and you might need to be prepared to invest money to cover additional costs like yearly upkeep, taxes and property upgrades. You should also factor in the costs of any repairs or renovations you may need to make. It’s important to know what you are getting into and the real-world costs of your investment to ensure you don’t face any surprises along the way.

Focus on Growth

When you invest in a property, you may eventually want to sell it, and you’ll want to make sure you can do so for a profit. Investing in property is less about your personal preferences, i.e. whether the property is to your taste, and more about whether it makes a sound investment.

Whether you flip the property or hold on to it to see its value rise, focus on properties that will grow in value by thoroughly researching tenant demand, property price growth of the area and if the area is a popular place to live. You can increase the value of your property by making upgrades or additions, just make sure you understand those that will make you the best return.

Crunch the Numbers

When it comes to property investment make sure you carefully keep an eye on cash flow. Ideally, your rental property should cover its own expenses, like mortgage repayments and repairs. Take your time and perform due diligence before deciding if the property is right for you and if you don’t have access to the time and resources needed, it might be worth hiring a property investment company to assist you.

Finally, you should factor in your own financial situation when choosing a property to invest in. Calculate how much you can realistically afford to invest and make sure you are comfortable with taking on any debt associated with purchasing a property. Research different mortgage products so you can identify what best suits your needs and budget.

You can find more tips for first-time investors in this article: 8 Property Investment Tips for First Time Property Investors.

Understanding the Market

As we navigate through 2024, the property market is influenced by a myriad of factors, reflecting broader economic conditions and specific real estate dynamics. 

A nuanced understanding of these trends and their implications is essential for anyone looking to engage with the property market this year. 

Here’s an in-depth look at the current market trends, key influencing factors, and the future of the property market.

Analysis of Current Market Trends in 2024

• Sustainability and Green Living: A significant trend is the growing demand for sustainable and eco-friendly housing. Buyers and renters are increasingly prioritizing energy efficiency, renewable energy sources, and green spaces.
• Technology Integration: The rise of smart homes and the integration of technology in property management and transactions streamline operations and enhance living experiences, attracting a tech-savvy demographic.
• Urban to Suburban Shift: With the continuation of flexible working arrangements post-pandemic, there’s a noticeable shift from urban to suburban living, as individuals seek more space and a better quality of life outside congested city centers.

Key Factors Influencing the Property Market

• Economic Indicators: GDP growth rates, employment levels, and consumer spending are crucial indicators of the property market’s health. A robust economy typically supports strong property demand and price growth.
• Interest Rates: The Bank of England’s interest rate decisions directly impact mortgage rates. Lower interest rates make borrowing cheaper, potentially stimulating demand for property, whereas higher rates may cool the market.
• Housing Supply and Demand: The balance between supply and demand remains a fundamental driver of property prices. Limited housing supply amidst strong demand can lead to price increases, while an oversupply without corresponding demand can cause prices to stagnate or fall.
• Government Policies: Policies related to housing, taxation, and foreign investment can significantly influence the property market. For instance, stamp duty holidays or changes in landlord taxation can affect investment returns and demand dynamics.

Future Outlook and Predictions

• Continued Demand for Suburban Properties: The preference for more spacious, suburban homes is expected to persist, driven by the desire for a better lifestyle and the flexibility offered by remote working.
• Market Differentiation: The gap between high-demand areas and those with less appeal may widen, with prime locations seeing continued price growth due to limited supply and strong demand.
• Interest Rate Sensitivity: The market remains sensitive to interest rate changes. Any significant shifts could influence buyer affordability and impact demand, especially in the more price-sensitive segments.
• Innovation and Adaptation: The property market is likely to see continued innovation, with virtual property viewings, online transactions, and the use of AI in property management becoming more commonplace.

How do you Expand a Property Portfolio?

If you want to run a property business, before you begin to add property to your portfolio, it’s important to have things right from the start. Your first property is arguably the most important, and while you may not buy a winner immediately, you don’t want to have a property that sees you losing large amounts of money either. The best advice is to start with smaller deals and cheaper properties in order to become more experienced and knowledgeable before moving on to larger investments.

Once you own a property, it’s possible to speed up your property portfolio growth by leveraging the equity you have in the existing property. While saving up for down payments on a mortgage can be a slow process, if you are able to tap into the equity you have in your portfolio you can use it to gain more streams of income. Positive cash flow will enable you to pay off your loans – with every property you are growing your passive income to reinvest and cover expenses.

When to Add More Properties to Your Portfolio

When it comes to growing your portfolio, it’s important to have a long-term investment plan. If you want to make more money than the average investor then you need to have an end goal in mind and a path to help you get there. Just having a sound investment strategy will enable you to know the types of property to invest in and when, narrowing your target market to those that will work best for you.

When adding properties to your portfolio, good advice is to diversity. By spreading your investments over different areas and different types of investment, you increase your chance to obtain capital gains and rental growth. If one area you invest in experiences flat rental rates and capital growth, other suburbs may experience growth which can ensure your portfolio remains profitable.

How to Get into Property Investment – Areas to Start

What are some of the areas of the UK that those wondering how to get into property investment should look into? Below we highlight areas that are worth considering.

Leeds

Leeds is one of the best places in the UK for landlords. This is due to lower-than-average property prices and higher-than-average monthly profits. ​​Rental prices in Leeds will probably increase by 14.2% by 2025.

 Additionally, the city will experience 21% economic growth in the next decade. Located in the sought-after Southbank, Sky Gardens as been flawlessly designed by multi-award-winning architects to provide a level of luxury living that has no equal in the city, or region.

Properties worth investing in are:

• The Pavillion
• Northgate House
• Pavilion Court
• Mill Conversion
• Kirkstall Design Centre
• Sky Gardens Leeds
• Private Estate Cliff-Oaks
• Grade II Apartments
• AXIS Leeds

Bracknell

Bracknell is the number one location for future property price growth in the south of England. Just 50 minutes to Central London by train and 30 minutes from Heathrow, Bracknell’s popularity has been growing over recent years, and with tech companies such as Dell, Vodafone and Hewlett Packard calling it home, this city on the commuter belt offers investors plenty of prospects. 

If you’re wondering how to get into property investment, Bracknell is still affordable and with 17.5% capital growth projected over next 4 years, owning a property here could be a great start.

Manchester

Manchester has been a hotspot for property investment, thanks to its strong rental demand driven by a growing population, thriving job market, and vibrant city life. The city has seen significant regeneration projects, making it attractive for both residential and commercial property investments.

Property prices in Manchester, while rising, still offer value compared to London, making it accessible for first-time investors. 

The city’s extensive regeneration projects, such as the development of MediaCityUK and the Northern Quarter’s transformation, have significantly enhanced its appeal, driving both capital growth and strong rental yields. 

Manchester’s extensive transport network, including the Metrolink tram service, enhances its attractiveness to residents and investors alike, providing easy access across the city and to surrounding areas.

Properties you should check out are:

• The Pendleton
• X1 Manchester Towers
• Click here for more Manchester properties

Liverpool

Liverpool shares many of Manchester’s investment-attractive characteristics, with its own unique draws. 

Liverpool has a rich maritime history and a strong cultural footprint, recognized by its UNESCO World Heritage waterfront and vibrant music and arts scene. The city’s economy is buoyant, underpinned by sectors such as healthcare, education, and digital and creative industries. 

Like Manchester, Liverpool has a substantial student population, served by institutions like the University of Liverpool and Liverpool John Moores University, creating high demand for rental properties. 

The city has benefited from extensive regeneration efforts, notably the Liverpool ONE shopping complex and the Baltic Triangle area, enhancing its residential appeal. Liverpool’s property market is marked by affordability and high rental yields, particularly appealing to first-time investors looking to maximize returns. The city’s plans for future developments promise continued growth, suggesting a bright outlook for property investment.

You can see the list of Liverpool properties worth investing in here.

Birmingham

As the UK’s second-largest city, Birmingham benefits from extensive infrastructure projects like HS2, which are expected to boost property values. The city’s economic growth, coupled with a relatively affordable property market, presents a good opportunity for capital appreciation.

Park Gate and Smithfield Works Birmingham are new and coming places worth investing in Birmingham if you’re looking how to get into property market 2024 and want a safe choice.

Sheffield

Sheffield’s property market offers attractive prices and solid rental demand, partly due to its large student population. The city’s ongoing redevelopment and investment in infrastructure suggest potential for future growth.

Properties worth investing in are:

• Country Court
• Queen Street
• BP Sheffield

Glasgow

Glasgow, Scotland’s largest city, presents an appealing option for first-time property investors for several reasons. Its affordable property prices, strong rental demand, and vibrant city life make it an attractive investment destination. 

Compared to other major UK cities, Glasgow offers more affordable entry points into the property market. This affordability makes it easier for first-time investors to purchase property and start building their portfolios without the need for substantial initial capital.

Glasgow has a high demand for rental properties, driven by a diverse population including students, young professionals, and families. 

The city is home to several universities and colleges, including the University of Glasgow, Glasgow Caledonian University, and the University of Strathclyde, which attract students from across the UK and internationally. 

This student population ensures a consistent demand for rental accommodations, particularly in areas close to university campuses and city center amenities.

Nottingham

Nottingham is known for its strong rental yields, supported by a significant student population and a growing number of young professionals. The city’s property market benefits from affordable prices and a steady demand for housing.

Nottingham stands out as a prime location for first-time property investors for a multitude of compelling reasons. Known for its rich history, vibrant culture, and strong educational institutions, Nottingham offers a unique blend of characteristics that make it an attractive market for property investment.

One of the city’s most appealing features for investors is its robust rental demand. Home to two major universities, the University of Nottingham and Nottingham Trent University, the city attracts a large student population seeking accommodation, ensuring a consistent demand for rental properties. 

This student-driven demand is complemented by young professionals and families drawn to the city’s employment opportunities, particularly in sectors like digital media, life sciences, and retail.

Nottingham’s property market is characterized by its affordability compared to other UK cities, making it accessible for first-time investors. The relatively low entry price for properties, combined with the high rental demand, presents an opportunity for strong rental yields, a critical factor in generating steady income from property investments.

Here’s the list of properties worth investing in.

Factors to Consider

• Rental Yield: Look for areas with high rental demand to ensure a steady income stream.
• Capital Growth Potential: Consider regions with ongoing or planned infrastructure and development projects as they typically experience above-average property value appreciation.
• Local Economy: A strong and diverse local economy can support sustained property demand.
• Accessibility and Amenities: Properties in well-connected areas, with access to transport links, shops, schools, and healthcare, tend to be more desirable.

What is the purpose of a property portfolio?

For most investors, building a property portfolio is a means to an end – to gain financial freedom, increase monthly income or save for retirement. Real estate is generally stable and profitable, which is why it remains popular as an investment strategy in the UK.

How much real estate should I have in my portfolio?

The number of properties in your portfolio will depend on your goals and situation. Realistically, most investors have restraints such as mortgage ability and deposit funds. The bigger your portfolio, the more work it is to manage and fund. Often, a smaller but higher-quality portfolio is the best way to balance risk, effort and financial reward.

If you’re wondering how to get into property investment, hopefully this article has answered some of the questions you may have when starting out. Remember to do your research, find areas that have a growing population and are undergoing redevelopment – strong indicators of capital growth and rising rents. To find out more about investing in your first property, get in touch with us today.