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Investment Property

UK Investment Property

We Provide Low Cost Investment Property with Full Management and Guaranteed Rent for Overseas Buyers, UK Expats and Investors from London and the South.  It is a client focused service, with no hidden costs, where we do everything for you. You fully and securely own a growing property, and get fixed Net Guaranteed Rent with no hassle!

The UK is one of the world’s best areas for secure property investment. Prices on UK property are now low due to falls from 2007 to 2010 and rental returns are good with up to 8% gross rent on low cost properties. Now prices are expected to rise in line with economic recovery in the UK and prices on lower cost properties could double within next 8 to 10 years.

Find UK Property provides a complete service to overseas property investors in the UK. Our view is that lower cost terraced houses of £55,000 to £75,000 provide the best value for investment and will produce the best capital and rental growth over the long term.

Best Buy Investment Properties

These Best Buy investment properties listed below are already rented out and managed by us. They are low cost, give high rental yields, come with 3 years net guaranteed rent (can be extended), are expected to grow well in value over the next few years and are easy to resell. We continually acquire, rent out, sell and subsequently manage such property. These are the most popular purchases made by our UK investors, expats and overseas buyers.

Location

Traditionally there have always been TWO popular investment hotspots – London and the North of England (Manchester, Liverpool Leeds, Teesside/Middesbrough region). Now London is very expensive, rental yields are much lower and there is more uncertainty in this area following Brexit. Thus the best area is the North West and North East of England as shown on the maps below. The left of the map shows shows our key areas in the North West, which are the towns located just north of Manchester in the Lancashire county area.  The right side of map shows our key areas in the North East which are in the Teesside area – Middlesbrough and Stockton.

 

Thus these Best Buy investment properties are not in London (property in London is already very expensive with low rental yields of about 3% gross and low future capital growth). These properties are located in high rental demand residential areas of  North West (Lancashire Towns about 40 minutes north of Manchester Airport) or in the North East (Teesside – Stockton and Middlesbrough). Here is an aerial view of a typical town in these regions.

 

A typical Northern town consists of terraced properties near the town centre and more expensive semi-detached and detached properties in the suburbs. Rental demand is highest for the terraced low cost properties. Below is an aerial view of a typical town area near the centre with terraced properties.

 

The terraced properties that lie near to shops and main roads and are walking distance from the town centre or have good bus routes are the best for investment and we always acquire these as we have to provide guaranteed rent.

 

A typical terrace consist of rows of 2-bed or 3-bed houses like the picture below. In the past year alone over 250 such properties have been sold to investors. If you are not sure which UK property to buy – then buy one of these. The most popular types (our Best Buy offers) are listed below on this page

 

Type of Property – Terraced House

These are the standard commodity properties in this part of the UK and are built of real stone or brick, with slate roofs. Almost 80% of the population live in these type of properties. About 60% are owner occupiers and about 40% are in the investment/rental market. All properties are fully fitted with kitchens, bathrooms, carpets, central heating etc. but do not include loose furniture. It is standard to rent out unfurnished as this has less liabilities for the owner.

Full Property Management & Rental Yield

Other Letting Agents

Other Letting Agents may quote higher rental yields but these are the Gross Rental Yields which on these properties average 8%. However there are 3 Main reductions which other agents will make:-

  • 1.Rent Not Collected. This may be due to property being vacant or tenant not paying or any other reason. This may drop the yield on average by 1% to 7%
  • 2.Management Fee.  The fee charged by other agents is 10% to 15% plus VAT = (12% to 18% of the rent. This will drop the net rent paid further to less than 6% rental yield.
  • 3.All Other Costs.  E.g. Costs of property repairs, maintenance, compliance costs, tenant damage or tenant eviction costs etc.  These can be significant and may vary greatly – further reducing net rent paid. Furthermore they create anxiety for owners due to uncertainty of the costs.

We do not use this system. Instead we use the Net Guaranteed Rent System which is all-inclusive and means that none of the 3 main costs above apply. Our clients know in advance the exact rent they will receive, there are NO management fees  and all costs are covered.

Our System – Net Guaranteed Rent  6%

This is the system we operate with all of our clients. This is the most important figure and the net rent you get into your bank account after ALL costs and is guaranteed – no matter what. For  H2 type house costing £59,999 you get Net Guaranteed Rent of £3,600 per year. On top of this you get capital growth in value with houses expected to double in value over next 10 years.

  • -The Rent is Guaranteed – no matter what
  • -There are NO management fees to pay us when you are on Net Guaranteed Rent.
  • -All costs are covered. Our Net Guaranteed Rent System also includes the Free Standard Maintenance Package shown below for the first 3 years.

This is the system we operate as default. The rate of 6% per year is guaranteed for a minimum of 3 years and after this automatically renews (as per wishes of owner) each year at the same rate unless rents in the market have changed significantly.

Future Ongoing Net Guaranteed Rent – 6%

After the first 3 years the default rate remains at 6% per year. It may be changed if rents in the market have changed significantly. E.g. If Average Gross Rent in the market increases by 1% to  9%, we would increase the Net Guaranteed Rent by 1% to 7%.

The Net Guaranteed Rent System is better than the systems offered by other agents, as overall our clients get more net rent – with certainty and peace of mind. Plus we save admin costs as this system is simpler for us to operate.

Free Maintenance Package – 3 Years.

All these items are FREE for the first 3 years.  Thus you have no property maintenance costs at all. All of these are included in our package.

  • -Annual Gas certificates and -Electrical Certificates
  • -All Repairs of any nature (e.g. plumbing issues, leaks, roof and boiler problems)
  • -Council tax and any other bills during void periods
  • -Tenant Damage, Eviction and Court Costs

The main reason why we can offer this free of charge is that we do not expect any significant repair costs in the first 3 years as properties are freshly renovated at start.

After the first 3 years clients continue with a maintenance package. The Standard Package shown above costs 0.5% of property price per year (only £280 per year for H1 2-bed house) after the first 3 years to keep property fully maintained and productive whilst it continues to grow in value.

Category 1 – Full Ownership

All houses are category 1 ownership. This means freehold or 999 years (almost 1,000 years leasehold). There is no difference in value between these two. This is the best form of ownership in the UK. (We do not sell category 2 properties that are 99 years or 125 years leasehold). Most of the houses in North West of UK are leasehold for 999 years with nominal (less than £1 per year) ground rent. For practical purposes these are treated like freehold properties.

Purchase Costs 

The purchase costs are negotiated and fixed at £999 and include solicitor costs, local searches, 12 month’s insurance and land registry fees.

3% Stamp Duty

The buyer has to pay the 3% stamp duty fee. If you do not own another residential property (anywhere in the world) you can get exemption. The amount of fee on our best selling H2 type of property would be £1,800.

Total Cost for H2 House (£59,999 + £999 purchase costs  + £1,800 stamp duty) = £62,798

Payments and Steps

There are TWO key stages: – Reservation of a type of property and then Selection of Specific property 4 to 5 weeks later.

  1. Discuss, then Provide ID Information and get agreement
  2. Visit if possible and Sign Agreement once happy
  3. Make 10% payment plus the purchase costs of £999. There can be a gap of up to 6 months between Reservation and Final payment if requested by Buyer. Normally 1 to 2 months.
  4. Agree Specific Property normally 4 to 5 weeks after reservation
  5. Payment 90% plus any stamp duty This can be made in instalments if needed. Rent starts 30 days after payment is complete.
  6. Purchase Completion & Registration at Land Registry
  7. Net Rent is paid at end of each calendar quarter into any nominated bank account (overseas or in UK) belonging to owner.

Resale

Clients can resell their properties at any time and can use us, other agents, or themselves. We advise clients not to purchase if they are looking to resell within 2 years as they will not make much profit due to buying and selling costs. Most clients are buying for long term investment and for such a purpose, these properties are ideal. If you buy and immediately resell you will lose money.

HMRC and Tax

We guide you to make this easy for you.

Registration as Non-Resident Landlord (NLR)

After completion, we register you with HMRC to obtain a NRL Reference Number (if needed) so that your rental income is paid without deduction of any income tax.

Annual Tax Free Allowance

All nationals of UK, EU and most other countries are eligible for the UK personal allowance. This is a very good benefit for retirees, foreign buyers and expats. Currently this is £12,500 per person per year (A couple thus have £25,000). Thus any rental income below this level would be tax free. A couple could own 6 or 7 such properties without paying any tax.

Tax Returns, Filing and Paperwork

We can provide a service to do the annual tax return and other HMRC paperwork for you, for a small annual fee.

Insurance Fee

The annual insurance fee is the only cost that is client’s responsibility (as insurance cannot be paid by third parties and must be paid by owner). Full buildings insurance for a typical 2-bed house is negotiated to only about £99 per year. The first years’ fee is included in the purchase costs and is thus not charged separately. In future years, we handle this for you and add the fee to your statement and take it from your rent each year.

There are no other ongoing costs for clients. All utilities and any council/community tax is paid by tenant (or by our company if property is empty). All repairs and property maintenance are our responsibility.

Viewing Visits/Tours

Since these investment properties are very popular, it is difficult for us to deal with the volume of speculative enquiries and arrange viewing for everyone without notice.

After your identification, we aim to provide as much information as possible by email to enable you to make a provisional decision. Thereafter, you can decide whether as visit to the UK is worth pursuing. We can provide the following service free of charge only to serious customers who are likely to proceed following the viewings and the meetings in the UK.

Each visit takes about 3 to 4 hours and involves meetings with senior consultants

  • Land at Manchester Airport, or if coming from London, come by train from Euston to Preston Station (2 hour journey).
  • We collect you from the airport, railway station or your hotel.
  • Have a meeting with you at our offices to discuss your purchase.
  • Show you the different types of properties and different areas within Lancashire. If you have already reserved, show you the specific recommended properties to select from.
  • Meet solicitor and attest documents if required (or these can be done easily overseas – we send you all the forms after reservation)
  • Agree a plan of action for after your visit.
  • Please read the  ‘Purchase Process’ and ‘Questions and Answers’ sections at the end provide detailed information regarding the buying process.

Also have a look at the detailed case studies written by our longstanding clients from all over the world.

Best Buys for Investment

  • H1- £55,999   Small 2-Bed
  • H2- £59,999   Standard 2 Bed
  • H3- £63,999   Large 2 Bed
  • H5- £69,999   3 Bed
  • H7- £129,999 – Semi-Detached 3-bed. Not Best for investment

90% of the houses fit into these main categories but we do have other types of properties in the that are not shown here. We also have H3t and H5t houses in Teesside area in the North East (Stockton and Middlesbrough towns) and these deliver higher rent and are priced £3,000 extra.

 

Offer Sheets

When purchasing such properties from Find UK and partner companies, you will be guaranteed a minimum specification and standard of property so that you can confidently make a reservation of such a type of property.

After reservation, normally 4 to 5 weeks later, you can select and agree the specific property address prior to your second (90%) payment and this agreed specific property will then be transferred to you as per the terms in the Reservation Agreement.

All recommended specific properties will be as per the details, floor plan, pricing, and rental shown in the following sheets. All Fees and Costs are also shown here.

 

Offer H1: Small 2-Bed Houses – £55,999

House Layout

Two small rooms downstairs (Lounge and combined Dining room/kitchen with rear yard and two small bedrooms upstairs plus 3-piece bathroom. These are fully renovated houses and are located in slightly lower rental areas than H2 houses shown below.

Rental Yield

We offer the Net Guaranteed Rent System as standard. For these properties the Net Guaranteed Rent is 6% of property contract price per year (£3,360 per year). Gross rent is higher at around 8% of property price but Net Guaranteed Rent provides certainty of income with No Costs.

Property Sizes for Type H1
  • -Lounge – 12ft by 13ft. (3.7m by 4m)
  • -Dining Kitchen – 12ft by 10ft. (3.7m by 3m)
  • -Bedroom 1 – 10ft by 13ft. (3m by 4m)
  • -Bedroom 2 – 9ft by 8ft. (2.9m by 2.5m)
  • -Bathroom -10ft by 6ft. (2.9m by 1.9m)
  • -Rear yard/garden – up to 15ft by 13ft.  (5m by 4m)
  • -Car parking: ample free car parking on street
Purchase Costs and 3% Stamp Duty

The purchase costs are negotiated with third parties and fixed at £999 and include solicitor costs, local searches, 12 month’s insurance and land registry fees. The buyer has to pay the 3% stamp duty fee. If you do not own another residential property (anywhere in the world) you can get exemption. The amount of fee on this type of property would be £1,680. Total Cost (£55,999 + £999 purchase costs  + £1,680 stamp duty) = £58,678

Free Maintenance Package – 3 Years.

All these items are FREE for the first 3 years.  Thus you have no property maintenance costs at all. All of these are included in our Net Guaranteed Rent Package.

  • -Annual Gas certificates and -Electrical Certificates
  • -All Repairs of any nature (e.g. plumbing issues, leaks, roof and boiler problems)
  • -Council tax and any other bills during void periods
  • -Tenant Damage, Eviction and Court Costs

The main reason why we can offer this free of charge is that we do not expect any significant repair costs in the first 3 years as properties are freshly renovated at start. After the first 3 years clients continue with a maintenance package. The Standard Package shown above costs 0.5% of property price per year (only £280 per year for H1 2-bed house) after the first 3 years.

Payments and Steps
  1. Discuss, then Provide ID Information and get agreement
  2. Visit if possible and Sign Agreement once happy
  3. Make 10% payment plus £999 costs – £6,599. Buyer can request a gap of up to 6 months between Reservation and Final payment if needed. Normally 1 to 2 months.
  4. Agree Specific Property (5 weeks after reservation)
  5. Payment 90% plus stamp duty £52,079. This can be made in instalments if needed. Rent starts 30 days after payment is complete.
  6. Purchase Completion & Registration at Land Registry 7. Rent is paid at end of each calendar quarter into any nominated bank account belonging to owner.

 

Offer H2: 2-Bed Best Buy Houses – £59,999

House Layout

Two rooms downstairs (Lounge and combined Dining room/kitchen with rear yard and two bedrooms upstairs plus 3-piece bathroom. These are our best selling investment houses and the ones that are in the highest rental demand.

Rental Yield

We offer the Net Guaranteed Rent System as standard. For these properties the Net Guaranteed Rent is 6% of property contract price per year (£3,600 per year). Gross rent is higher at around 8% of property price but Net Guaranteed Rent provides certainty of income with No Costs.

Property Sizes for Type H2
  • -Lounge – 12ft by 13ft. (3.7m by 4m)
  • -Dining Kitchen – 12ft by 13ft. (3.7m by 4m)
  • -Bedroom 1 – 12ft by 13ft. (3.7m by 4m)
  • -Bedroom 2 – 10ft by 8ft. (3m by 2.5m)
  • -Bathroom -10ft by 6ft. (3m by 1.9m)
  • -Rear yard/garden – up to 20ft by 13ft.  (6m by 4m)
  • -Car parking: ample free car parking on street
Purchase Costs and 3% Stamp Duty

The purchase costs are negotiated with third parties and fixed at £999 and include solicitor costs, local searches, 12 month’s insurance and land registry fees. The buyer has to pay the 3% stamp duty fee. If you do not own another residential property (anywhere in the world) you can get exemption. The amount of fee on this type of property would be £1,800.

Total Cost (£59,999 + £999 purchase costs  + £1,800 stamp duty) = £62,798

Free Maintenance Package – 3 Years.

All these items are FREE for the first 3 years.  Thus you have no property maintenance costs at all. All of these are included in our Net Guaranteed Rent Package.

  • -Annual Gas certificates and -Electrical Certificates
  • -All Repairs of any nature (e.g. plumbing issues, leaks, roof and boiler problems)
  • -Council tax and any other bills during void periods
  • -Tenant Damage, Eviction and Court Costs

The main reason why we can offer this free of charge is that we do not expect any significant repair costs in the first 3 years as properties are freshly renovated at start.

After the first 3 years clients continue with a maintenance package. The Standard Package shown above costs 0.5% of property price per year (only £300 per year for H2 2-bed house) after the first 3 years.

Payments and Steps

  1. Discuss, then Provide ID Information and get agreement
  2. Visit if possible and Sign Agreement once happy.
  3. Make 10% payment plus costs – £6,999. There can be a gap of up to 6 months between Reservation and Final payment if requested by Buyer. Normally 1 to 2 months.
  4. Agree Specific Property (5 weeks after reservation)
  5. Payment 90% plus stamp duty £55,799. This can be made in instalments if needed. Rent starts 30 days after payment is complete.
  6. Purchase Completion & Registration at Land Registry 7. Rent is paid at end of each calendar quarter into any nominated bank account belonging to owner.

 

Offer H3: Large 2-Bed Houses – £ 63,999

House Layout

Three rooms downstairs (Lounge, Lounge 2/Dining Room and separate kitchen with rear yard and two bedrooms upstairs plus 3-piece bathroom.

Rental Yield

We offer the Net Guaranteed Rent System as standard. For these properties the Net Guaranteed Rent is 6% of property contract price per year (£3,840 per year). Gross rent is higher at around 8% of property price but Net Guaranteed Rent provides certainty of income with No Costs.

Property Sizes for Type H3
  • -Lounge 1 – 14ft by 13ft. (4.3m by 4m)
  • -Lounge 2 – 12ft by 13ft. (3.7m by 4m)
  • -Kitchen – 8ft by 6ft. (2.5m by 1.9m)
  • -Bedroom 1 – 14ft by 13ft. (4.3m by 4m)
  • -Bedroom 2 – 11ft by 8ft. (3.4m by 2.5m)
  • -Bathroom -10ft by 7ft. (3m by 2.1m)
  • -Rear yard/garden – up to 20ft by 13ft.  (6m by 4m)
  • -Car parking: ample free car parking on street
 Purchase Costs and 3% Stamp Duty

The purchase costs are negotiated with third parties and fixed at £999 and include solicitor costs, local searches, 12 month’s insurance and land registry fees. The buyer has to pay the 3% stamp duty fee. If you do not own another residential property (anywhere in the world) you can get exemption. The amount of fee on this type of property would be £1,920Total Cost (£63,999 + £999 purchase costs  + £1,920 stamp duty) = £66,918

 Free Maintenance Package – 3 Years.

All these items are FREE for the first 3 years.  Thus you have no property maintenance costs at all. All of these are included in our Net Guaranteed Rent Package.

  • -Annual Gas certificates and -Electrical Certificates
  • -All Repairs of any nature (e.g. plumbing issues, leaks, roof and boiler problems)
  • -Council tax and any other bills during void periods
  • -Tenant Damage, Eviction and Court Costs

The main reason why we can offer this free of charge is that we do not expect any significant repair costs in the first 3 years as properties are freshly renovated at start. After the first 3 years clients continue with a maintenance package. The Standard Package shown above costs 0.5% of property price per year (only £320 per year for H3 2-bed house) after the first 3 years.

Payments and Steps
  1. Discuss, then Provide ID Information and get agreement
  2. Visit if possible and Sign Agreement once happy
  3. Make 10% payment plus £999 costs – £7,399. Buyer can request a gap of up to 6 months between Reservation and Final payment if needed. Normally 1 to 2 months.
  4. Agree Specific Property (5 weeks after reservation)
  5. Payment 90% plus stamp duty £59,519. This can be made in instalments if needed. Rent starts 30 days after payment is complete.
  6. Purchase Completion & Registration at Land Registry 7. Rent is paid at end of each calendar quarter into any nominated bank account belonging to owner.

Offfer H5: 3-Bed Houses – £ 69,999

House Layout

Three rooms downstairs (Lounge, Lounge 2/Dining Room and separate kitchen with rear yard and three bedrooms upstairs plus 3-piece bathroom.

Rental Yield

We offer the Net Guaranteed Rent System as standard. For these properties the Net Guaranteed Rent on these houses is lowest at 6% of property contract price per year (£4,200 per year). Gross rent is higher at 8% of property price but Net Guaranteed Rent provides certainty of income with No Costs.

Property Sizes for Type H5
  • -Lounge 1 – 14ft by 13ft. (4.3m by 4m)
  • -Lounge 2 – 14ft by 13ft. (4.3m by 4m)
  • -Kitchen – 8ft by 6ft. (2.5m by 1.9m)
  • -Bedroom 1 – 14ft by 13ft. (4.3m by 4m)
  • -Bedroom 2 – 11ft by 8ft. (3.4m by 2.5m)
  • -Bedroom 3 – 10ft by 8ft. (3m by 2.5m)
  • -Bathroom -10ft by 7ft. (3m by 2.1m)
  • -Rear yard/garden – up to 20ft by 13ft.  (6m by 4m)
  • -Car parking: ample free car parking on street
Purchase Costs and 3% Stamp Duty

The purchase costs are negotiated with third parties and fixed at £999 and include solicitor costs, local searches, 12 month’s insurance and land registry fees. The buyer has to pay the 3% stamp duty fee. If you do not own another residential property (anywhere in the world) you can get exemption. The amount of fee on this type of property would be £2,100Total Cost (£69,999 + £999 purchase costs  + £2,100 stamp duty) = £73,098

Free Maintenance Package – 3 Years.

All these items are FREE for the first 3 years.  Thus you have no property maintenance costs at all. All of these are included in our Net Guaranteed Rent Package.

  • -Annual Gas certificates and -Electrical Certificates
  • -All Repairs of any nature (e.g. plumbing issues, leaks, roof and boiler problems)
  • -Council tax and any other bills during void periods
  • -Tennant Damage, Eviction and Court Costs

The main reason why we can offer this free of charge is that we do not expect any significant repair costs in the first 3 years as properties are freshly renovated at start. After the first 3 years clients continue with a maintenance package. The Standard Package shown above costs 0.5% of property price per year (only £350 per year for H5 3-bed house) after the first 3 years.

Payments and Steps
  1. Discuss, then Provide ID Information and get agreement
  2. Visit if possible and Sign Agreement once happy
  3. Make 10% payment plus £999 costs – £7,999. Buyer can request a gap of up to 6 months between Reservation and Final payment if needed. Normally 1 to 2 months.
  4. Agree Specific Property (5 weeks after reservation)
  5. Payment 90% plus stamp duty £65,099. This can be made in instalments if needed. Rent starts 30 days after payment is complete.
  6. Purchase Completion & Registration at Land Registry 7. Rent is paid at end of each calendar quarter into any nominated bank account belonging to owner

 

More on Investment Properties

Why are these Properties the Best for Investment?

  1. Here are just some of the reasons why we recommend such properties:
  2. High rental yield due to rental demand.
  3. Low cost due to fall in prices in 2007-2010.
  4. Good capital growth potential as the economy is now recovering.
  5. Already rented out (no renting costs to you).
  6. Guaranteed rent option for minimum of first 3 years, for peace of mind. This can be extended.
  7. Secure purchase process with defined verifiable stages.
  8. Low purchase fees that are fixed so you know what your costs will be.

The chart below shows that, on average, properties were selling for £50,000 in the year 2000, after which the prices rose, fell and now are expected to rise again.

Our view is that sub £100,000 properties (away from London) are the best for investment as they not only deliver the best rental yield but are now also expected to grow the most in terms of capital value.

Holiday Use

The best way to use your property is to keep it rented out all of the time and to use the rental income for your holidays and visits to the UK. This is more cost-effective and allows you to have your holiday anywhere in the country, in accommodation of your own choice. Trying to use your property for holidays is not cost-effective and actually ends up costing you more!

Future Own Use

If you relocate or decide to live in the UK, and need a property for your own permanent use, then the best thing to do is to re-sell these investment properties and get an ‘own use’ property in your desired location. We can help you do this. In the mean-time, your funds would have grown at a good rate. Another option it to rent an “own use” property and use the rental income from your investment properties to pay for it.

Buying for Children’s Education

Many clients initially are looking for a property that is near a university so that this can be used by their children if and when they do come to study in the UK. Our advice is that if this is your main aim – then you should NOT purchase property yet. The problem is that the selected property may not be in the right location, in the right community, convenient for your child – even if it is near the town you think your child will study at. It is better for them to rent initially and have the ability to move around to ensure they are in a convenient and safe location for their studies. We have many clients from overseas who wish to do this but practically they never end up using their own properties for one reason or another.

Instead if you do want to get a UK property, it is better for you to get a purely investment property that you leave rented all out of the time. You can then keep the rental income in the UK and use this income to pay for your child’s university accommodation. This will give you and your child more flexibility.

Mortgages

Mortgages are not available for non-residents (even UK nationals who are living abroad). All of our clients are using their own funds to purchase such investment properties. Many of our clients buy one property and then wish to buy another in 1 to 2 years time. Our company does offer interest free finance on the second property which is linked to the future rent from the existing and new properties. This enables clients to buy the second property with lower cash reserves.

Even if you are resident in UK and eligible for a mortgage, our current advice is that this is not good value as mortgages on low value loans carry high interest rates and buy-to-let mortgages (unlike own home purchase mortgages) are high risk as these are NOT regulated by the Financial Conduct Authority. It may be best for you to acquire just ONE low cost property with your own funds and then later we can help you acquire additional properties over a period of time with support from our company. Your future rental income can be used together with your saving to grow your portfolio without taking any risks or paying any interest.

Residency in the UK

Purchase of any property in the UK does not give you any automatic residency, work rights, or permanent visa in the UK. As an investor, it will be easy for you to obtain visit visas but you do not get automatic residency or ability to work in the UK. If residency is your main aim – then you should not buy a property – but seek appropriate visa or immigration advice.

Brexit – Demand Has Increased in The North

The vote by the UK to leave the European Union has actually increased our sales and demand for low cost property away from London. The interest in UK property from all other countries in the world (including old commonwealth countries) has increased as the expectation is that UK links with other countries will be stronger. However, London, is more reliant on EU links and prices here are already very high. So, any negative news could have a negative effect on London prices. Already many investors are moving away from London to consider lower cost properties in the middle of the UK or North. This will have a positive effect on such lower cost properties and we have seen increases in demand.

Residency in the UK

The UK is an “open country” for property investment. Any National of any country can buy property in the UK. We are managing over 800 properties for overseas clients. Buying any property in the UK does NOT give any automatic rights to residency, long term visa or citizenship. All of our overseas clients buy such properties for long term secure investment and to give them options in the future. We keep them rented out for them and they keep the rental income in the UK and use this for their holiday accommodation, children’s university fees or other needs. This gives them much more flexibility and works out to be more cost effective. Thus, the investment property can be in a different location and size to their holiday accommodation to deliver the maximum yield and long-term growth potential.

However, buying a property does increase your links with the UK and allows you to have income in the UK and be registered with HMRC tax office (although you may not pay any tax if your income is below £11,600 per person per year). It gives you options for the future and such a purchase may still be worth considering if you have long term plans to spend more time in the UK. If residency is your main aim – then you should not buy a property – but seek appropriate visa or immigration advice.

House are Better than Apartments

Almost all of the new apartment developments (e.g. in city centres) fall into the NEW leasehold category and are not suited to long term investment. The reason for this is that owners do not have true ownership due to the lease being 99 years or 125 years etc and in the new leases the service charges can be increased by the developer after every 10 years. The net result is that these type of properties (whilst looking good on paper) do not appreciate well over the long term. Thus it is better to buy houses rather than apartments

If the apartments are not ready then the risks of off-plan remain. Typically there are too many parties involved.  The sales company, the developer, the builder and the management company. Agreements made with the sales company will not be fulfilled by the sales company. The people you buy from are not the people you deal with long term. Thus any promises made will depend on the fine print of any agreements and will only apply to the parties that made the agreements. No one party will take the total responsibility or accountability for the investment and its returns. The guaranteed returns and buy back assurances may be given by other third party companies and not the seller.

The old nominal leases (999 years at £1 per year) and freehold properties such as houses do not have these problems, so you have total ownership and thus houses and are more suited to long term investment.

On average freehold type houses have doubled in value every 8 years for the past 60 years. The only exception was the financial crisis from 2007 to 2010 when prices actually fell on all types of property all over the world.

London

We do longer sell properties in or anywhere near London or the South as the prices there are very high and the % rental yields are too low. The same property which we sell for £60,000 here in Lancashire county is over £300,000 in the South. In the past London has done very well in capital growth – however this is less likely to be the case going forward and the risks of buying here are now higher. Many clients just RENT near London (if they have to be near London for holidays or work) but they BUY multiple low cost investment properties away from London as this gives higher income now, and better potential for the future with lower risks.

A purchase of a property for £300,000 in London will give net rent of around £9,000 per year (3%).  The same fund will acquire over 5 houses in Lancashire giving net rent of over £18,000 per year.

It is better for investors to buy multiple lower cost properties for the same budget. The reason for this is that such lower cost properties, as well as delivering higher % rental yields and are now also growing better in % values (capital growth). These are also easier to rent out and resell, are more tax efficient, lower risk, and provide more long term flexibility as you can sell some whilst keeping others. We have many clients that have done this. For new clients who are not confident with us yet, we would normally advise you to purchase just ONE low cost property first and go through the process and be confident and happy with everything before buying more.

Other Large Cities

Properties inside the major cities away from the South e.g. Manchester, Liverpool, Birmingham, Leeds, Sheffield and Glasgow tend to be apartments. These are on the new type of short leases 99 years or 150 years and with service charges that can increase every 5 years. In our view these are not good for long term investment.

On the outskirts of Cities you can get terraced houses. However the prices here are 2 to 3 times more than the prices in Lancashire but the rent are not 2 to 3 times higher. Thus the % rental yields are lower and it is not possible for us to provide Net Guaranteed Rent at 6% levels for the long term. In our view the best value is represented by the lower cost houses in Lancashire as these will deliver better rental yields, higher capital % growth and lower risks.

 

Investments to Avoid

Beware of Student Room Investments

These are single rooms within student flats and sold as leased investment units. The properties are built by builders and developers, marketed and sold by sales companies and managed by different student management companies. The rooms can only be rented out by the management company – you cannot use them or rent them out yourself. They can only be re-sold to another investor who agrees for them to be continued to be used as student-only accommodation.

Whilst there are some projects that offer good value, many do not due to high management/ service costs and short leases (student properties are not freehold). Prices are inflated with a single mini bedroom in a shared flat costing around £50,000 and they cannot be sold to anyone other than an investor. Thus, the market re-sale value may not rise (and can fall). Typically, these are sold by aggressive sales agents who do not have control over the property and no subsequent contact with the buyer. We have had many customers who have contacted us wanting to exit such investments and were prepared to do so even at a loss.

Student rooms are not really comparable with freehold houses and would be impossible to sell without the guarantees made by the companies advertising them. Unfortunately, such guarantee wording is drafted in a way in which there is a ‘get-out’ for the developers, managing companies and sales agents in case the yields and growth are not achieved. This means that it is in fact the investors that carry the risks. We have sold these rooms in the past and they are not the risk-free investments many of these companies claim them to be.

With the student investments, there can be several parties involved – properties are sold by the commission based sales company, they are purchased from the developer or builder, and the student management company who you will be dealing with is completely different. When you purchase a standard house with our help, we are responsible and liable for all aspects of the purchase, rental and management; we remain your contact for the life-time of your investment.

The best student property to buy is a standard house near a College or University. Standard UK houses can be sold to anyone (or used by yourself) and are now increasing in value at good growth rates. See these articles:-

“Student ‘digs’ offer a harsh lesson for investors”

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10852153/Student-digs-offer-a-harsh-lesson-for-investors.html

“Don’t get suckered by student accommodation”

http://moneyweek.com/dont-get-suckered-investing-student-accommodation/

Hotel Rooms, Care Homes, Car Parks & Storage Pod Investments

These fall into a similar category to student pods. The values are inflated, there is no true re-sale market (can only be sold to another investor) and capital growth is not realised.

There are multiple companies and contracts in each transaction and no one company totally accountable to the investor. Whilst returns may be guaranteed for a short period there are hidden charges

‘Under-Construction’, Off-plan apartments or Virtual Property

Take extra care when purchasing an investment property that is yet to be built or is under construction. The risks with such properties remain high. The project could be cancelled, and there can be delays in completion and then in renting the properties out. Prices are often inflated by developers as properties are difficult to compare.

For investment, only consider property that is built and already rented out. Buy from a company that has control over the property and who remains responsible to you after the sale. Again, there are exceptions and some of these properties can be suitable, especially for your own use in cities.

Growth Chart – Low cost investment houses

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