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High demand
According to Richard White, Nationwide’s Chief Economist, the demand for proper housing is supported by strong labor market conditions, but there is a limited stock of homes on the market.
This high demand for housing has increased the prices on UK property. Property forecasts dictate that house prices will strongly grow through 2022 to 2025. As the local UK residents people put off buying, rental opportunities for your UK property are expected to increase due to increased renting demand. Our overseas landlords who have bought with us previously at Pitchbook Property are already experiencing an average of 15-20% increase on their rental income generated from UK property.
This provides a great investment opportunity for property investors in the UK today.
Homes continue to become more important to populations across the globe. As such, your investment in UK property will maximise returns over the long term. The UK is in the top 5 investment destinations in the world, making it a prime country for real estate buyers hoping to own property in a free and stable economy.
Benefits of Buying UK property
Property investment is one of the best ways to provide long term financial security. Buying UK property has numerous benefits, i.e.:
1. High rental demands
Covid 19 had tragic effects on numerous populations. As a result, many UK income earners faced unemployment. The results are still felt today as the demand for rental houses increases. In August 2022, consumer price inflation increased by 0.5% with the largest upward contribution coming from housing and household services, transport, food, and non-alcoholic beverages. These statistics indicate that landlords with prime UK property can let quickly and get higher rental income.
Additionally, the population in UK has been consistently growing for many years, which means that the demand for housing has also increased. The thriving rental property market is ideal for investment UK property; historically proven with good returns over the long term.
2. Leverage – mortgage
In the last year, our buyers enjoyed historically low interest rates of between around 1.5-3% on average. The climate for mortgage rates has changed significantly with average rates around 6% at the time of writing. Lending options are still readily available but not as much as previous years. People who want to borrow in order to finance their UK property purchase are looking at typically 5.44% for a 60% loan (HSBC) and 5.99% for a 75% (Skipton) loan both on a five year fixed rate. Compared to other markets, this interest rate is quite favorable for investors. In Hong Kong for example, the Hong Kong Monetary Authority (HKMA) has increased the base interest rates for the fifth time this year. Based on your financial circumstances, you can get a mortgage at an interest rate that suits you. *We are not qualified financial advisors. If you’re looking to obtain a mortgage, we can recommend a qualified mortgage broker to assess your financial circumstances. Although interest rates remain high for the near future, it does present opportunities for Hong Kong buyers who are looking to fund their purchases without a mortgage.
3. Different payment plans to choose from
Aside from mortgages, numerous property developers selling off-plan properties offer the option to pay for property in smaller, more achievable instalments. If you can fully finance your purchase, there are numerous affordable properties in prime parts of the UK. Staged payments offer flexibility until the completion of the property where the significant portion of the balance is due. Typical payment terms are 10% within 21 days, 10% in 12 months and 80% due on completion of the property.
4. You can diversify your portfolio
Investing in UK property is a great way to diversify your portfolio. As an investor, it spreads your risk across various assets, making your investment lucrative. With the option to take full control of your own property, your investment in UK property can yield high returns and build wealth over time.
There are a range of prices, locations, and properties to choose from in the UK. With the right real estate agency, finding your investment in UK becomes notably easier. Depending on your cash flow, you can get property that will get through inflation and leave your investment unscathed.
At Pitchbook Property, we are a modern and refreshing real estate company, helping investors purchase overseas property and ensure they make a smart investment choice. Contact us for further information on how we can help you build wealth through property investment.
