When it comes to investing money, the property market has always been an obvious option. For those willing to take a little risk, they could buy a property and sell it on for a profit (or rent it out for regular income)
Today, we want to provide you with six reasons to invest in UK property in 2019. You’ll learn exactly why the property market is still a good choice!
1. Something for Everyone
For many years, there has been a general belief that investing in the property market requires hundreds of thousands of pounds. Today, this just isn’t true due to the expansion of
2. Increasing House Prices
Secondly, we can’t ignore the rising house prices. Right across the UK, there’s a real shortage of housing and the government can’t build homes quickly enough. While population growth in much of Europe has slowed, the UK is still growing, and experts predict that we’ll hit the 70 million mark by 2020/2021.
As demand continues to outweigh supply, there’s nothing to stop the house prices in their current surge. For those worried the prices will soon flip, this can only happen when the supply of homes increases, and this is something that will not happen in the near future.
According to the Office of National Statistics, this is a problem that doesn’t even have a solution over the next six years. With population growth outpacing properties by 100,000 each year, a continuation of the current trend suggests a significant housing shortfall by 2025.
3. Low Interest Rates
As well as the first two reasons to invest in UK property, we also have low interest rates in the country right now. As mortgage payments reduce, those who invest in buy-to-let opportunities are making a much larger profit per month. In fact, it’s a double effect because mortgage rates are low, and rent is high. With this in mind, these opportunities are a lower risk than they have been for some time.
Is this likely to change in the future? Well, we’ve already seen that house prices and rent are expected to remain high. With regards to interest rates, an expert from the Bank of England suggested that interest rates could remain low for another 20 years. In an interview in August 2018, Ian McCafferty noted how borrowing costs may experience slight increases in the next couple of years, but the overall trend of low interest rates could continue for two more decades.
4. Strong Yields
If you’re investing in student accommodation or hotel room investments, you need to know whether returns will be higher than leaving the money in the bank…and they are. At Property Invest UK, we’re seeing buy-to-let investments offer a yearly return of around 7% at the moment.
Meanwhile, we have hotel room investments with a 10% NET return (and a buy back guarantee of 120%) and student accommodation investments pushing 8.5% NET return. Why keep money in the bank when these opportunities exist? For many years, the answer would have been ‘security’, but this is no longer applicable with the banking industry.
5. Improving Opportunities
With many cities in the UK receiving heavy investment to improve airports and infrastructure around the whole area, the opportunities for investors are also improving in quality. What’s more, universities are now easily accessible both in terms of public transport and entry requirements. Today, people of all backgrounds have an opportunity to get into university; it’s no longer a privilege reserved for the middle and upper classes alone.
Once you pair this with increased flight routes and the numbers of people entering the UK as tourists, this has led to improved buy-to-let, student accommodation, and hotel room investments. In 2017, 39 million people visited the UK, and this has increased from 24 million back in 2003. With these statistics, it only makes sense that hotel rooms are in demand.
6. Portfolio Expansion
When looking for reasons to invest in UK property, we also can’t ignore the fact that there has never been a better time to diversify one’s investment portfolio. With the returns as high as we’ve seen, it’s a great time to add some capital and property to a portfolio.
In addition to the positive returns, the increasing house prices are making the investment worthwhile. If we look at Yorkshire as an example, investors here saw a 21% increase in property prices between 2012 and 2017. For those who spent £200,000 in 2012, they enjoyed not only five years of rental income but also a £42,000 boost to the property’s value.
While stocks and shares can be useful to have, there’s something unique about investing in a tangible asset. Rather than something written on a piece of paper or on a computer screen, you can touch property, and this somehow adds security; you know that it won’t be lost because of a simple mistake or if something goes wrong with the economy.
With these six reasons to invest in UK property, you should have a better idea of why everybody seems to be excited about this niche. With all the benefits we’ve listed, and improving infrastructure, increasing visitor numbers, and an increasing number of young people going to university, property investment makes sense.
At Property Invest UK, we can find the right investment opportunity for you. Whether you’re interested in buy-to-let, hotel room investments, or student accommodation investments, we can match your budget, ensure returns, provide an exit strategy, and allow you to earn money with a hands-off investment!