Property is probably one of the most popular investment opportunities right now, with many would-be investors attempting to take advantage of the recent market boom to secure rather lucrative ventures.
However, for many, it may seem like a challenge to get started.
Buying UK property as a foreign investor, in particular, may seem like a very daunting task.
Investment – in general – is by no means easy.
But, if you’re smart and learn precisely what to avoid, then you’ll be well on your way to success.
With that in mind, here are a few handy tricks and tips to ensure that you get the most out of UK property investment.
Due Diligence is Key
This probably seems like the most obvious thing to consider but ensuring that your chosen property is right for you in terms of location and yield is vital in this process.
This means thoroughly researching all your options beforehand and making sure that everything about the property precisely fits your needs, and – if you’ve chosen to work with one – this also means ensuring the property investment company you are buying with is reliable.
You must keep up to date with the latest property trends – if not, you could potentially be missing out on the prospect of massive returns.
Over the years, prices have, of course, risen and fell, and occasionally, exceptional levels of growth can be observed.
A recent example of this is the current state of the UK property market, in the wake of the Covid-19 pandemic.
In December, it was reported that in 2021, the UK experienced a record-breaking rise in house prices to £254,822 on average.
Prices grew so much – and so quickly –, in fact that this was also recorded as being the highest overall growth for the country in 15 years.
When you factor in future predictions alongside this, it’s clear that this trend is seemingly only going to continue for the foreseeable future – with prices expected to further increase as high as 18.8% in the Northwest and Yorkshire by 2026 – with a 4.5% rise in 2022 alone.
Reserve your Property/Unit as Quickly as Possible
Again, another obvious one – but important to highlight.
Once you’ve found your perfect property and are familiar with the UK investment process, you’ll need to reserve a unit within your development of choice.
The ability to reserve a unit is probably one of the most significant benefits of purchasing a new build – or off-plan property – as you’ll often be able to cherry-pick the very best with the most impressive features and views.
However, all of this is in vain if you don’t complete all your payments.
You must pay your reservation fee and send over your reservation form as quickly as possible, as the property won’t be taken off the market until this has been completed.
Create a workable budget – and don’t forget about taxes!
For those who don’t have the cash to purchase a property outright, you may need to consider a buy-to-let mortgage.
While this is not necessarily impossible to obtain, it may be something that you could struggle with – unfortunately, due to the fact that UK lenders will be hesitant to provide such a mortgage to an overseas buyer.
To avoid being charged a higher deposit, you can use the services of specialist lenders or international banks to get help securing a UK mortgage for residential property. However, keep in mind that these organisations will consider whether to lend based on various factors, including age, income, and credit score.
One of the most critical aspects of this is ensuring that you familiarise yourself with – and adhere to – the plethora of taxes involved when investing in the UK property market.
This includes things like:
- Income tax
- Inheritance Tax
- Stamp Duty Land Tax
- Capital Gains Tax
Be sure to speak to a tax advisor to understand these essential taxes fully and ways to minimise the costs.
Consider Utilising a Property Management Company
Once you’ve purchased your property and you’re all set to start letting it out to your tenants, another thing that you may need to consider is hiring a property management company.
Property management companies, or rental management companies, are used by investors to manage the day-to-day duties of owning a rental property.
This includes typical landlord duties – such as finding tenants, responding to tenants’ queries, and dealing with any issues within the property.
It’s essential to note that, while investing in UK real estate as an overseas buyer is not entirely impossible, this article covers just the basics of UK property investment.
To succeed, you must keep up to date will all of the latest trends, do your research and maybe consult the opinion of experts.
