How Will The Autumn Budget Affect Property Investment?

Property Investors Investment Autumn Budget Finance

If you have read the news lately, it has primarily been dominated by the big ‘B’ of Brexit, however, there has been another big ‘B’ we should be aware of and that is the Autumn 2018 Budget.

By now, you will have heard and read about Chancellor Philip Hammond’s 2018 Budget update. Hammond opened the 2018 Budget, with a confident prediction that it would “open a new chapter in our country’s economic future.” This can leave many people pondering on how it will affect them and their businesses and families.

If you are you wondering exactly how this will directly affect you as a property investor then read on as we will outline the most important changes that you’ll need to know about, from changes to tax bands, important information regarding foreign nationals, changes to stamp duty as well as changes to Capital Gains Tax.  

Tax Bands:

In the Autumn Budget, changes to tax bands were discussed regarding the 2019/2020 year. The personal tax-free allowance where the 40% higher tax is applied will rise from £46,350 to £50,000. Although it may seem small and many landlords were dismayed by the news, we have to be positive as this is still an increase on last year’s figure. Also important to note, is that the threshold for VAT registration will remain unchanged for two years. Read our post to discover if it is worthwhile to invest in property via a limited company rather than as an individual.

Stamp Duty:

In the Autumn Budget, the Government has stated that it will extend first-time buyer’s Stamp Duty relief in England and Northern Ireland to shared ownership properties, regardless of whether the purchaser chose to pay Stamp Duty on the market value of the property. This will even be eligible to be backdated to 22 November 2017, so that all of those who were not previously eligible can claim a refund.

Read about the other Stamp Duty change announced by Prime Minister Theresa May at the beginning of October, to the effect that foreign investors will be subject to higher charges.

How Will The Autumn Budget Affect Property Investment? Aspen Woolf

Foreign Nationals:

In the Autumn Budget, there was an important update regarding non-UK residents and international companies. It is vital to note that all non-UK residents and international companies that are intending on buying and investing in property will also be taxed on indirect disposals of UK land. These rules will apply when a person makes a disposal of an entity that derives 75% or more of its gross asset value from UK land. An exemption will be made available for investors in such entities who hold less than 25% interest.

There will be options available in order to calculate the gain or loss on a disposal using the original acquisition cost of the asset, or by using the value of the asset at commencement of the rules in April 2019.

Another aspect of the Autumn 2018 Budget was that all non-UK resident companies will be charged Corporation Tax rather than Capital Gains Tax on their gains. The Capital Gains Tax charge relating to the Annual Tax on Enveloped Dwellings will be abolished. The legislation will broadly come into effect for disposals from the 6th April 2019.

Capital Gains Tax:

In the Autumn Budget, there were changes regarding Capital Gains Tax. This is especially important information for landlords as the relief that’s been granted reduces Capital Gains Tax on the sale of properties that have previously served as the landlord’s personal residence, but, which are currently being used to let out to tenants as their residential accommodation. This relief sees a maximum exemption of £40,000 per owner.

However, it is important to highlight that from April 2020, this exemption will only be available for landlords who live inside the property with the tenants. There hasn’t been any information regarding single tenants, so we assume that live-in landlords with only a single tenant are not eligible for the lettings relief, meaning that this will only apply towards accommodation with two or more people renting rooms, unless we hear clarification from the Government on this.

Read more about the various taxes property investors face here.

Are you a property owner? Great news, the time period between ceasing to occupy a house and final sale has been reduced from 18 to just 9 months. Though this change does exclude sellers who are disabled and/or who are living in a care home, they will continue to receive the 36-month exemption.

How Will The Autumn Budget Affect Property Investment? Aspen Woolf

Housing News:

In the Autumn Budget, there were some interesting pieces of news regarding the wider housing industry market. Firstly, The Housing Infrastructure Fund will increase by £500 million, bringing the total to a figure of £5.5 billion. There will also be £8.5 million available in order to allocate land for affordable housing. This is great news for property investors looking to expand their portfolios.

Secondly, you may be aware that Sir Oliver Letwin was asked to investigate why it takes house builders such a long time to complete large housing developments after statistics revealed that just over half of the 684,000 homes with planning permission that was granted in July 2016 had actually been completed. The findings of his investigation were that “the idea that housebuilders are behaving like financial investors, speculating over future land values, is not compatible with how they run their businesses. Housebuilders’ profits are generated from selling homes, not from an increase in the value of land” he argues. The Chancellor agreed that the review did not find evidence that major house builders are engaging in land speculation as part of their business model.

Lastly, The Office for Budget Responsibility believes that GDP growth will be 1.6 per cent in 2019, up from previous forecasts of 1.3 per cent; 1.4 per cent in 2020 (up from 1.3 per cent); 1.4 per cent in 2021 (unchanged); 1.5 per cent in 2022 (unchanged); and 1.6 per cent in 2023. This steady growth can only mean good things for property investors.

To conclude, 2019/2020 seems like there will be a positive outcome forecast for property investors with plenty of reliefs including changes to Capital Gains Tax, increased tax bands, more money being delivered into investment funds, as well as Stamp Duty being extended.

Here at Aspen Woolf, we can help you with your property investment journey, whether you’re at the beginning or if you already have a vast portfolio, we have an expert team who are ready to hear from you today.

Earn Good Returns In The Changing Buy-To-Let Market

houses and money

Are you having second thoughts about investing your hard-earned cash in the property market? Is the taxman giving you sleepless nights with spiralling tax duties on your rental income? Are you breaking down with high maintenance costs on your buy to let investment? If the answer to the above is yes, take a minute to check out our guide on how to adjust to the impending changes in the property market in the UK.

Buy to let is the best investment

You may want to reconsider and try other avenues of getting a return on your investments. Head to the stock market and you will have to contend with the headache of dipping stock prices and frequent ups and downs to guard your cash. If on the other hand you decide invest it into a savings account, be prepared to bear with low interest rates and a snail’s pace growth rate. Therefore, we are back to our buy to let investment, which is the best choice, if managed well. If you’re trying to decide where in the world to start investing, take a closer look at some of the United Kingdom’s unlikely cities reaping good buy to let investment profits.

Earn Good Returns In The Changing Buy-To-Let Market Aspen Woolf

How to get the best buy to let investment

To get into the property market, you need to consider some factors and research on the best buy to let investment opportunities. You can additionally carry out the following:

  • Perform thorough research on the buy to let market. The internet provides you with tons of data on the property market and this should be your first start. Talk to a buy to let investment broker or other property owners and get some advice on the pros and cons of this lucrative market.
  • Hunt for the best buy to let mortgage deal that is convenient to your available cash and plans
  • Get a backup plan if you are a first time buy to let investor to cushion you as you learn the ropes of the business.
  • Consult an expert advisor on the best buy to let investment opportunities. This will enable you understand the best locality for your investment, the target market and expected annual rental yields. The team at Aspen Woolf are on standby to receive your call and can assist you in selecting the right investment for your budget. Our sales team are on hand at every step of the way, including resales advice in the future.

Earn Good Returns In The Changing Buy-To-Let Market Aspen Woolf

How to maximise returns on your buy to let investment

Having gone through the above process and made your buy to let investment, all that is required is to sit back, enjoy your rental proceeds or make profit on your investment. However, with changing economic times, it is imperative to guard your investment against losses and stagnation. To remain afloat if you are considering the property as a long-term investment, you need to implement the following:

  • Consider purchasing low investment properties that you can renovate and build up to your specification after buying the property. Research shows that the average rental yield (percentage rental income versus the value of property) is high in Northern England and low in London, south and East of England. This is because the costs of purchasing property in these areas differ. However, the demand for housing near London is quite high hence your property

stays vacant for relatively fewer months before getting a new tenant if the former tenant’s lease

expires.

  • Never underestimate the student housing market. Purpose built student accommodation is highly sought after in university towns and cities. Sheffield, Leeds and Manchester all provide excellent investment opportunities at far lower costs than London.
  • You can consider furnishing your property before renting it out. This enables you to earn above the set rent. The added advantage is that the furniture can be used on long term by different clients.
  • To use an agent or solely manage your buy to let investment: weigh the pros and cons of each. You save lots of cash without agents by managing your own property, but you should be ready to dedicate your time soliciting for tenants, solving leaking drainages and other hitches. On the other hand, using an agent ensures that you get tenants quickly and raise your rent income without delays and also get more time and space for your personal pursuits.
  • You can consider renting your investment as an HMO (Houses in Multiple Occupation). Renting your property to multiple tenants enables you to raise more rent as opposed to a single tenant. It also minimises the risk of problematic and troublesome tenants. However, you should consider the council laws so that you do not face any fines.
  • You can make a bargain when purchasing investment. This is after thorough market research to ascertain the market prices of the property.
  • You can review your mortgage and get a suitable rate that saves you some interest.
  • Install add-ons like a dishwasher, fridge, freezer and air conditioner. These appeal to the tenants and provide you with a basis to increase the rent. If well maintained, the add-ons can go for many years thus giving you value for money despite them being installed only once.
  • Utilize the available space to elevate your property status. You can create a private balcony, garage, lounge or children’s playground out of the unoccupied space and manage to lease out your property at a higher value.
  • Increase the rent: Changing financial times demand a change in the rent of your property. It is best to use a gradual approach like leasing out your property for one year. Then you can increase the rent for the subsequent years as opposed to long-term leases.

If your buy to let property is however a short term investment, you can still maximise your returns by adopting the following measures:

  • Getting an agent to solicit and manage the property. It is much quicker for an agent to get short-term clients.
  • Carrying out maintenance and refurbishing the property to appeal to brokers and other property buyers. In this way, you make a profit by buying at a low price and selling it for a higher price.
  • Researching on the best buy to let investment opportunities for different localities and investing accordingly. In this way, you get to quickly buy and sell property suited to different tenants like student hostels for properties near a university, beach houses for a resort area among others.

Earn Good Returns In The Changing Buy-To-Let Market Aspen Woolf

Whether your buy to let property is meant for long term or short-term investment, you can always make the best of the situation in the changing times. Proactive measures like market research, proper KYC checks of the tenants and proper financial management will make you successful despite the changing buy to let market.

For further information on any of our fantastic buy to let investment opportunities, get in touch with the team at Aspen Woolf today,

When Is The Best Time To Invest In Property?

When it comes to property investment, while the old adage goes, “location, location, location”, there’s actually a lot more to a successful investment.  As well as location, timing is also key as during the course of a year, the real estate market can change dramatically – making a wise investment a poor one if taken at the wrong time.

The best time of the year to invest in property can be determined by a number of different factors such as demand and supply, median price of properties and if the market is a buyer’s or seller’s market. These factors seem to all be intertwined and can affect each other in the market.

Buyer’s Market Or Seller’s Market

The prime time to buy property in the real estate market is during the winter months. During this time, most people are busy preparing for the holidays and the kids are still at school. Therefore, there are very few people willing to part with money and buy investment property. These conditions make it hard to make a major move and this pushes most people out of the market. The fewer the people interested in buying the property, the less the competition.

When there is minimal competition then this is what is referred to as a buyer’s market. For example, if an investor finds the ideal property to invest in, and has done all the necessary homework he may view this an opportune time to invest. However, if other investors have done their homework, they too will show their interest in the property and there will be a number of bids to contend with.

When there is this kind of a bidding war, it becomes much harder and the investor may end up losing out or paying exorbitant prices for property that could have been purchased much more cheaply. This scenario is not ideal for buyers, therefore, it’s not a buyer’s market and it would not be ideal to make an investment during this time.

In most cases, it would be advisable to purchase a house during the Christmas period because competition is at its minimum and sellers are generous with pricing during the holidays. Choosing to invest in property through a company such as Aspen Woolf gives you the upper hand as our team can advise you of new investment opportunities, often with a small initial deposit.

When Is The Best Time To Invest In Property? Aspen Woolf

Price Of Investment Properties

When looking to invest in income generating assets, then the price of the properties is a very important factor. When the price is lower, a lower amount of money will be required to invest in the market. During a buyer’s market, market prices are lower as compared to a seller’s market. Different organisations give information about the price of investment properties, the median days in a month that are good for the market as well as the proportion of properties sold above the stated price. Over the past eight years data has been collected and compiled to come up with figures that indicate the specific aspects of the market. The data between October and March has the following figures:

  • The median number of days in the market is 104
  • The median price of sales is £193,735
  • The percentage above median price of investment properties sold is 23%

The data above supports the fact that from October to March is the best time to invest in property. The data also reveals that January is the opportune time to make a move on property because the sale price is at its minimum during this time. There are some properties that will sell above the median price but the percentage is very low as compared to the other months. This particular time is very bad for those seeking to sell while it is the best time for those people wishing to purchase property because they have the negotiating power. Sellers are more likely to be desperate when the deal lags behind in the market and they will most likely sell on the cheap to recoup the money that they had initially invested.

When Is The Best Time To Invest In Property? Aspen Woolf

There is also a bad time to invest in the property market. Between April and August have the following figures:

  • The median number of days in the market is 67
  • The price of median sales is £233,895
  • The percentage above median price of investment property sold is 24%

According to the data above these are the worst months to invest in due to the higher prices. June specifically is the worst month during which to invest because the price of property is about £38,000 above that of property in January. The number of days property is on the market is relatively shorter by about a month, which significantly reduces the negotiating power of investors. The aspects that are in play during these months are characteristic of a seller’s market. However, there is a time during April and August window where investors can get a good deal for property.

The days surrounding Easter Sunday are quite ideal for any purchasing. If one does not do the proper research, then they might end up making a loss. For example, if during the month of August an investor purchases a property, then they will most likely get it at a very high price due to the median price during this time as a well as the shortage of days for property to stray on the market. However, if the same investor does wait a few months up to October or November, they will get the a similar type of property in the market and it will cost less due to the median price during this time and the number of days that property is available on the market.

When Is The Best Time To Invest In Property? Aspen Woolf

Supply And Demand In The Market

A buyer’s market and a seller’s market are defined by the supply and the demand in the real estate market. However, supply and demand in this market is not as obvious as it seems. People looking to sell their houses will look for the opportune time to sell their property because their aim is to generate income. This means that the demand for purchasing property might be lower in the winter months, which is good for people looking to invest in property but the supply will not be as high. Those looking to sell may wait till the summer when the demand is higher for them to sell their properties. At this time, an investor may find it hard to get what they are looking for and this may result into a problem for the buyer.

During the winter months demand is on the low and hence, people wishing to buy property and resell it immediately may be at a loss due to the limited number of people that are willing to buy the property at their asking price. For the investors that are looking to get a good investment deal, then it would be advisable to purchase property that will be used for rental because they will earn income off it. For those who want to have an income generating asset then buying during the summer and spring months would be ideal since you can buy an asset and resell it in the short term because demand is on the rise.

 

Invest in Oxygen: Manchester’s First Vertical Village

Oxygen Tower will be located near excellent transport links in the city centre.

Construction is underway of Manchester’s ground-breaking ‘vertical village’ – set to be known as Oxygen Tower. Located near to Piccadilly Station, the 375,825 ft² construction will be one of the most complex and impressive high-rise projects in Manchester.

Invest in Oxygen: Manchester's First Vertical Village Aspen Woolf

The developers, Property Alliance Group, have commissioned building specialists Russells Construction and designers 5Plus Architects for the £100 million residential development. Set for completion in 2018, it will eventually comprise 345 luxury apartments and 12 family townhouses.

A sales launch has already taken place, with Oxygen proving extremely popular with prospective buyers. There are still opportunities for both residential and buy-to-let investors however, so feel free to get in touch for more information on this exciting investment.

Invest in Oxygen: Manchester's First Vertical Village Aspen Woolf

Building Details

Oxygen will manifest as three connected blocks, with the tallest being an impressive 31-storeys high. These will include one, two and three-bedroom apartments, with the luxury townhouses on ground level. Ninety-one car parking spaces will be available in the basement.

The tag of Manchester’s first ‘vertical village’ comes from the various leisure facilities set to be included on-site. Along with a 24/7 concierge and rooftop garden terrace, inhabitants will also have access to a communal gym, spa, swimming pool and cinema room.

The development director of Alliance, Gareth Russell, has noted these facilities have been a major enticement for potential buyers. He said:

As Manchester’s first vertical village, the development will provide residents with a variety of luxury homes as well as amenities and services that will create a sustainable and thriving community.

With a roof garden, allotments and spa it will create a sociable environment and lifestyle that will appeal to both young professionals and families looking to rent or buy.”

Invest in Oxygen: Manchester's First Vertical Village Aspen Woolf

Further Information

The project lies on Store Street, just off Great Ancoats Street, which places it within walking distance of some of Manchester’s prime areas. Not only is Piccadilly Station close by, but you’re also not far from the Northern Quarter, Oxford Road, Market Street and the Arndale Centre.

In terms of design, every Oxygen apartment and townhouse will be finished to ultra-modern standards. Although specific details have not been revealed yet, full height windows and balconies will be a feature of each room.

The three towers will descend in height, from 31-storeys down to 15 and nine respectively, connected by a visible lift and stair cores. Underneath, the basement car park will hold 91 spaces for cars and 175 for bicycles.

A residential breakdown is as follows:

  • One-bedroom apartments – 190 units – £220,000 starting price
  • Two-bedroom apartments – 236 units – £292,000 starting price
  • Family townhouses – 12 units – £510,000 starting price

At time of writing, the Oxygen development is expected to be ready for completion at the back end of 2018. Capital growth of 15% in that time is anticipated, with rental yields expected to reach 6%. If you’d like any more information on this exciting investment opportunity in Manchester, feel free to get in touch with us today.

You can find out more about Oxygen here.
For more information about Manchester, take a look at Why Invest in Manchester.

Dubai Offers Vast Potential for International Investors

UK investors should take notice of the vast potential for growth in Dubai.

In the first quarter of 2017, Dubai has witnessed a 25 percent increase in overall transactional activity. Although this is great news for the property sector, there’s still vast potential for growth – especially from international investors.

This was the consensus of the latest International Property Show at the Dubai World Trade Centre. Experts discussed how lower oil prices, more favourable mortgage conditions and a strong local currency can stimulate market activity even further.

To take advantage of the promising outlook, Aspen Woolf offer numerous investment opportunities across Dubai. Our flexible payment plans, varied finance options and personal connections inside the Emirate will help secure your purchase.

Local Insight

Dubai Offers Vast Potential for International Investors Aspen Woolf

Image credit: Djordje Radovanovic via Flickr

The impetus from inside the UAE is to create an appealing market for international buyers. UK-based investors should take note, especially at a time when Dubai is offering better rental yields than London, Singapore and Hong Kong.

The managing director at Emaar Properties has emphasised the importance of a unified effort to bring in foreign investment. He said:

“We already have a strong appeal to international investors. As developers, we can do the marketing but we need the continuous support of banks in completing transactions getting the money abroad.”

This was echoed by Masood Al Awar, chief commercial officer at Dubai Properties:

“Eighty percent of the demand will come from the international market. However, as of today, not even 50 percent comes from it, which means we still have a huge market to conquer and investors to attract moving towards 2020.”

Expo 2020

Dubai Offers Vast Potential for International Investors Aspen Woolf

Image credit: USCPublicDiplomacy via Flickr

The year 2020 is significant in Dubai right now, essentially because of the impending World Exhibition in three years’ time. The prestigious event will attract a massive 25 million visitors to the Emirate over a six-month period, acting as a major catalyst for real estate activity.

Buy-to-let investors have been quick to recognise this unique opportunity. Such an enormous influx of people will create massive demand for accommodation, as well as inflated rental income.

As the quarterly growth of 25% indicates, the momentum created by Expo 2020 has already begun. This has been backed up by government initiatives to improve infrastructure and the tourism/hospitality sectors, creating jobs and boosting the rental market even further.

International Investment

Dubai Offers Vast Potential for International Investors Aspen Woolf

Image credit: Serge Bystro via Flickr

With the local real estate community cooperating to attract foreign backers, UK investors should take notice of the vast potential for growth in Dubai. Findings in the Core Savills’ Q2 Dubai Residential Market Update shows how this approach is already paying off.

Their report found the main apartment districts of the Dubai Marina, the Views and the Greens are attracting increased buy-to-let interest, buoyed by increased supply. More than 3,500 units were delivered in the second quarter of 2017, an increase from 12 months before.

To take advantage of Dubai’s potential for growth, especially ahead of Expo 2020, using a UK-based estate agent to secure the purchase is highly recommended. At Aspen Woolf, we can advise on various local buying customs and how to benefit from the UAE’s lenient tax conditions. Please get in touch today for more information.

Why It’s Good for Investors that UK House Prices Are Still Rising

Despite Brexit and the political uncertainty in the UK, house rises have been rising.

The average UK house price increased by 5.6% in the year to April 2017. This is good news for buy-to-let investors, protecting your initial outlay whilst also driving usual first-time buyers into rented accommodation.

It also provides more options for an exit strategy. Knowing your investment will make capital gains year-on-year provides peace of mind and a healthy resale value should you decide to move on.

Investment Sense

Why It's Good for Investors that UK House Prices Are Still Rising Aspen Woolf

Despite the political and economic uncertainty surrounding Brexit, UK house prices still rose around £15,000 last year on average. What this shows is a resilience in the market not seen elsewhere.

This makes acquiring property Britain’s number one investment. For example, it far outstrips what you’d receive from a savings account, especially with interest rates at historically low levels.

This has been backed up by Rachel Springall of comparison website Moneyfacts, who says:

“To earn £15,000 in a year, a saver would need to have £300,000 and find an interest rate of 5%. No standard savings accounts offer anywhere near that.”

Even if house prices start to decline, you’ll still have an underlying asset at your disposal. This will help you obtain finance for mortgage applications or other investments, using the property as collateral.

Positive Forecast

Why It's Good for Investors that UK House Prices Are Still Rising Aspen Woolf

These property gains are showing no sign of slowing down either. Research from Barclays suggests that house prices will rise by a further 6% over the next five years, meaning the average UK property value will be nearly £300,000 in 2021.

Their report claims that a buy-to-let surge will play its part in the growth, especially in upcoming property ‘hotspots’ outside of London. Relatively cheap house prices and thriving local economies will lead to increased demand and higher rental yields in these areas.

Likewise, according to Aviva, forecasts for UK rental income remain positive over the short and medium term. They predict average yields to remain at around 6.5% until 2020 at least, with some other areas in the Midlands and North offering up to 10%.

Rental Reliance

Why It's Good for Investors that UK House Prices Are Still Rising Aspen Woolf

With a housing shortage and expanding population, the rise in UK property prices means many Brits are increasingly reliant on rental homes. For buy-to-let investors, this is promising news and means tenant enquiries are almost guaranteed once your property is listed.

The latest research backs this up. Nearly 75% of those currently renting expect to be in the same position three years from now and by 2021, it’s predicted one in four households (5.8 million) will be privately renting as home ownership becomes less achievable.

Rental income is also expected to increase with the Royal Institution of Chartered Surveyors (RICS) predicting a  25% rise in rents over the next five years. Property prices themselves are expected to increase by around 20%, placing buy-to-let investors in a win-win situation.

For all types of investor or those planning retirement, property is your best bet in the current climate. However, because house prices are still on the up and look set to rise even further by 2021, now is the time to act.

 

The options we have at Aspen Woolf span all areas of the UK and cater to investors with varying budgets.

For more information on the predicted property market rise, check out Optimistic Outlook for Property Market in Next Five Years.

Key UK Cities See the Highest Quarterly Price Rise Since 2014

Leeds City Skyline view

House prices in major UK cities increased by 3.5% in the last three months – the highest quarterly rise since 2014. This is according to the latest data from Hometrack, an analytics website that monitors residential house prices in 20 key cities across the country.

For property investors, these results demonstrate the stability of UK real estate. After recent political shocks, expected downturns in the market have not materialised, meaning property investment remains a viable and profitable approach going forward.

Key UK Cities See the Highest Quarterly Price Rise Since 2014 Aspen Woolf

Leeds city skyline. Image credit: Tim Green via Flickr

Overall Analysis

Over half of the 20 cities recorded faster growth than they did at the same point last year. Although overall increases slowed marginally from 2016 levels, the yearly rise was still an impressive 5.1%. This brings the average sale price within the index to £250,200.

As you’d expect, the findings vary across different regions although nearly every city (except Oxford and Aberdeen) experienced positive growth in the past three months.

The biggest gains were found in Birmingham (3.8%), Nottingham (3.8%), Liverpool (3.7%), Manchester (3.3%) and Leeds (2.8%) – a clear indication of confidence in buy-to-let hotspots outside of the capital.

Key UK Cities See the Highest Quarterly Price Rise Since 2014 Aspen Woolf

Image credit: Ruben Holthuijsen via Flickr

London, with quarterly growth of just 1.9%, is becoming less attractive because prices aren’t just inflated but have no real scope to rise further. In fact, its annual growth rate of just 3.3% is the lowest it’s been for five years.

There’s more potential with Midlands and Northern properties, especially those with large student populations. This was supported by Richard Donnell, a research and insight director at Hometrack, who said:

“There is clear potential for additional house price growth in cities outside South Eastern England. House prices in London have grown 90% since 2009, making them unattainable for your average investor.

“As the economy continues to grow, and mortgage rates remain low, we expect house prices to keep rising at a steady rate and close the gap to London.”

Investment Confidence

Key UK Cities See the Highest Quarterly Price Rise Since 2014 Aspen Woolf

Nottingham city centre.
Image credit: Lee Haywood via Flickr

Although sharp rises in the UK’s key cities may not be welcomed by residential buyers, investors should be buoyed by the latest data. More people will be pushed into renting, assuring you of tenant enquiries once an investment is made.

Furthermore, with house prices on a steady incline, capital appreciation provides an effective exit strategy in the medium to long-term. And with a current housing shortage, property will remain in high demand if and when you do decide to sell.

Research from Rightmove backs this up. They show that more homes are trading hands now than they were a year ago, meaning there’s still high activity and confidence in the property market. Their director, Miles Shipside, has said:

“A year on from the shock referendum result and subsequent dent in activity levels, the fundamentals remain strong.

“Low unemployment, low interest rates, strong demand and historic undersupply of homes are mitigating any wobbles in confidence and as a result nearly half the properties on the market, over 45 per cent, have sold signs slapped across them.”

 

If you’re looking to take advantage of the current property resolve as noted in the Hometrack index, Aspen Woolf have a range of investment opportunities in these key UK cities.

If you’d like more information on how the rental sector is growing, you might be interested to know that By 2021, the Buy-to-Let Sector Will Have Grown by 24%.

Student Accommodation is the Ideal Investment in the Current Economy

The UK student population is 2 million and they need somewhere to live.

With the UK set for political and economic uncertainty over the next few years, some commentators have predicted a period of stagnation for the property sector.

Although this remains to be seen and the market has held up well so far, one area that won’t be affected is student accommodation. This is because student investment is countercyclical in nature and less likely to be affected by the overall economy.

Students will always need somewhere to live, and if you can find a property in a favourable location, demand will hold up year-on-year. At Aspen Woolf, we offer a number of student properties for this exact reason.

Outstanding Performance

Student Accommodation is the Ideal Investment in the Current Economy Aspen Woolf

Throughout the current decade, student accommodation has outperformed traditional assets in the property sector. Although recent external pressures on buy-to-let may partially explain this, the main reason is due to the strong demand for purpose-built flats in prime student areas.

Traditionally, first year students have had to rely on university-sponsored halls when they enrol – these are usually older buildings with limited space and basic amenities. Now, it seems undergraduates prefer modernised, purpose-built flats when given the option.

A recent report by Knight Frank backed this up. It showed students are prepared to pay increased rents if the facilities impress them, and so with many new developments containing gyms, games rooms and individual car parking, finding tenants should be of little worry.

Student Accommodation is the Ideal Investment in the Current Economy Aspen Woolf

Even though many are being constructed in areas close to campus buildings, transport links and shops, there’s still a significant structural undersupply. It is here that individual investors can take advantage.

Yields are consistently high, helped by low-entry prices onto the market, with impressive occupancy rates. This isn’t a recent trend either, it has remained a resilient investment sector for many years now with no indication of slowing down.

In addition, rents are usually guaranteed by a parent and paid upfront. For investors, this provides great peace of mind knowing you’re assured both demand and rental income at the start of each term.

Positive Forecasts

Student Accommodation is the Ideal Investment in the Current Economy Aspen Woolf

Although the UK student population is roughly 2 million, there’s only enough private-sector accommodation to house a quarter of them. And despite increased university fees, applications don’t seem to be slowing down. It seems the student sector will remain a robust asset class for many years to come.

These positive forecasts are being recognised by wealthy foreign investors. Over 70% of new purchases are from private equity and high net-worth overseas buyers. Even if you can’t compete with this financial clout, as a private investor it pays to recognise their buying behaviour.

According to Knight Frank, the purpose-built student market is estimated to be worth around £46 billion, with a further £5 billion to be added in new developments this year. This shows that, despite the economic uncertainty around at the moment, one sector unaffected is student property.

At Aspen Woolf, we’ve recognised this trend and have sourced various student flats from hotspots across the UK. We’ll have management companies in place for the investment on your behalf, meaning all you need do is sit back and enjoy your assured rental yields of between 6-10%.

 

Take a look at our current student property investment offers today.

If you’re interested in investing in student accommodation, you may want to take a look at the Five Best Student Towns to Invest In.

What Could the Election Results Mean for Property Investment?

The general election led to a lot of political uncertainty.

A hopeful period of strength and stability didn’t turn out as planned for Theresa May. The snap election has muddied the waters, meaning some property investors may remain a tad more cautious until things settle down.

However, if speculators believe this time of political uncertainty will negatively affect the property market, one glance at the sector post-Brexit should be of comfort. In the year since the Referendum, the average property price has risen by 5.6%.

Likewise, although the Conservatives didn’t get the extended majority they were looking for, they still have mandate to govern effectively and will be able to guide the country through the EU negotiations.

Therefore, property speculators shouldn’t worry too much about the seemingly ambiguous future of UK politics. The law of supply and demand will remain, especially in the consistent rental and student sectors which are more immune to outside influence.

What Could the Election Results Mean for Property Investment? Aspen Woolf

Image credit: Tiocfaidh ár lá 1916 via Flickr

Expert Views

Many estate agents inside the industry have experienced election fallout before, as well as the 2008 economic crash and last year’s Referendum. Of course, any uncertainty is not welcomed by investors, but because the UK has a chronic housing shortage problem, the demand will always be there.

Sales director at Seven Capital, Andy Foote, echoed these sentiments in the wake of the election result:

“While the London market may be more sensitive to a change in central government, for the short term, growth markets around the country will remain robust and resilient, delivering capital growth for investors,”

“Despite the change in government, the imbalance of supply and demand in the UK property market still persists.”

Housing Minister

What Could the Election Results Mean for Property Investment? Aspen Woolf

Image credit: Foreign and Commonwealth Office via Flickr

Adam Challis, the head of residential research at investment management company JLL, has noted that the loss of Gavin Barwell as housing minister will have mixed results. Although some may believe this will create more ambiguity, if the new minister, Alok Sharma, can continue government house building pledges then confidence will return.

Challis says:

“It will be crucial that the new champions of housing market policy in government can reaffirm commitments to the current policy direction rather than to create further disruption or uncertainty,”

“It’s important the policy direction as set out in the white paper on building more homes across the range of tenures will be upheld.”

International Investment

Brexit and the election both saw a drop in the pound. This has mixed results for the economy, where one positive is a rise in foreign spending. International investors will be attracted to the UK in increasing numbers due to the more favourable exchange rate.

This has been evident within the student market in particular. Over 70% of investment in the purpose-built student sector was from overseas buyers last year. The spending behaviour of accomplished and wealthy foreign buyers is a good indication of where growth will occur.

No Real Impact

What Could the Election Results Mean for Property Investment? Aspen Woolf

Image credit: Paul Townsend via Flickr

Nationwide’s chief economist Robert Gardner has maintained that the results of the snap election won’t have too much impact on people’s buying and selling behaviour. Broader economic effects are the main factor, something proven by previous election trends.

As house prices remain out of reach of many traditional first-time buyers, the rental sector is expected to grow in demand as well as rental income. A typical tenant won’t really have the state of UK politics in mind when considering a move, meaning the election isn’t likely to affect the overall property market too much either way.

 

If you’d like further evidence that the property market is still healthy despite current politics, then you might be interested that Demand for Rented Homes is on the Up as Renting is Now Cheaper Than Buying.

Buying A New-Build Property Could Pay in the Long Run

New-build properties offer investors a low cost, modern opportunity.

A study by the Home Builders Federation (HBF) has found the cost of upgrading an older property to the same standard of a new-build could be as much as £50,000! Therefore, on top of the initial property purchase, the overall cost may exceed what you’d pay for a new-build in itself.

With this in mind, investors should consider purchasing a new-build outright, especially if the location is desirable and there’s potential for long term capital gains.

Renovation Costs

Buying A New-Build Property Could Pay in the Long Run Aspen Woolf

Image credit: Nolan Issac via Unsplash

The Home Builders Federation survey looked at refurbishment work that is often required when people move into a new home. Estimates of these potential costs are listed below, although some prices may of course differ depending on the size of the property:

  • Fitted kitchen – £7,900
  • House re-wiring – £8,850
  • New bathroom – £3,800
  • New central heating system – £6,185
  • Roofing – £4,000
  • Doors and windows – £4,900
  • Guttering and insulation – £1,000
  • Utility appliances and electrical equipment – £1,000

If looking to refurbish, one should really take these potential costs into consideration. If they begin to add up significantly, then it’ll make more financial sense to invest in a new-build. Add to this the energy savings you’re also likely to make. Plus the added bonus of having a new-build warranty, which is usually set at 10 years.

Energy Savings

Buying A New-Build Property Could Pay in the Long Run Aspen Woolf

Image credit: Matthew Hamilton via Unsplash

Buyers are often drawn to new-build homes because of their increased energy efficiency. Compared with Victorian-style properties, they could be up to 65% more effective in preserving heat due to fitted airtight doors, insulated roofs and double-glazing.

The HBF study shows that 94% of homes built in 2016/2017 can boast an A-C energy efficiency rating –  this is just a quarter in second-hand properties. New-build homeowners will therefore save hundreds, and sometimes thousands, of pounds in utility bills alone each year.

New-Build Advantages

Buying A New-Build Property Could Pay in the Long Run Aspen Woolf

Image credit: Echo Grid via Unsplash

Some older buildings in the UK may simply not meet the standards required for 21st century living. Remodelling them completely may take up too much time and money for it to be considered financially viable. Usually something done out of a labour of love rather than investment purposes.

On the other hand, new-builds are always constructed to modern standards and have to pass multiple council planning, build, and health and safety requirements. They’ll be equipped with energy-efficient boilers and vacuum insulation panels, not just saving you money on bills, but also meaning replacements won’t be needed any time soon.

You’re also likely to experience long-term capital appreciation as new-builds are often hand picked in areas with high social and economic growth potential.Some buyers may not be aware that new-builds are zero rated from VAT. As the buyer, these savings will be passed onto you, helping reduce your overall costs. As briefly mentioned before, fittings in a new property are covered by a 10-year NHBC warranty protection on structural defects. So if anything does go wrong, you won’t have to worry about footing the bill.

Deciding between a large-scale renovation or a new-build property depends on the property itself, as well as your personal circumstances and goals. However, as refurbishment can cost as much as £50,000 as noted in the Home Builders Federation study, it would make more financial sense to plump for a new-build instead.

 

If you’re looking for ideas on where you should buy your investment property, take a look at The UK’s Top Buy-To-Let Hotspots in 2017 Revealed!

For more advice and information on where you can invest in property, get in touch for a chat.