Questions & Answers
All of the questions and Answers relate to Investment Properties
Yes. The UK is open for investment and all nationalities can buy. About 30% of our clients are non-UK nationals. Many of our clients that are not from the UK are expats currently resident or working in other countries in Middle East, Africa, Far East and Europe. The rules and rights for overseas buyers are the same. However, non UK residents (even UK nationals) will have to pay an extra 2% stamp duty fee when buying any property. This was intruduced after 1st April 2021.
Yes – but we recommend that you do visit, meet us and view the types of properties and then decide. If you are visiting later, you can still buy but we will need to get your documents (passport and address ID) attested by a lawyer in your country to the satisfaction of the UK Land Registry. This can be done easily and we will provide full details. During 2020/2021 very few clients have visited due to coronavirus but we have still been helping clients buy an average of 35 to 40 properties each month.
Q- What is the location of these investment properties?
The investment ‘best buy’ properties are located in the North of England. All properties are located in 28 areas in the North. Majority are in the North East located in towns north of Leeds – such as Middlesbrough, Stockton, Darlington, Hartlepool, Teesside, Durham County (TS, DL and DH post codes). We also have Type H2L, H3L, H4L and H5L houses in the North West, mainly in the Lancashire towns north of Manchester, and prices on these are £8,000 to £10,000 higher than the prices shown. (rents on these are also correspondingly higher). All these areas have good rental demand (gross yields around 8%), are now doing well economically, and house prices are expected to rise better here than the South.
Q- Are property prices rising in the UK?
Yes. Property prices fell in the UK from 2007 to 2012. The fall was greater for lower cost properties and for properties outside London. Prices started to rise again in 2015 but have been relatively stagnant since the Brexit vote. However now they have started to rise again despite Post-Covid, War, Inflation and Energy Crisis. Average growth for such low cost properties in the UK is around 7% (see the chart under UK Property Market). Growth for more expensive properties – especially in London is low. Our expectation is that low cost houses will continue to rise although high cost properties in London may stagnate or even fall a little as UK interest rates rise.
Q- Does a UK property purchase give me any automatic visa or residency rights?
No. Purchase of any property in the UK does not give you any automatic residency or work rights or any permanent visa in the UK. As an investor, it will be easy for you to get visit visas but you do not get automatic residency or the ability to work in the UK. If this is your main aim – then you should not buy a property but seek legal immigration advice first.
Q- I am familiar with buying property – Why should I use Find UK Property?
If you have the time and are willing to take on the responsibilities & liabilities, and want to deal with things yourself, then it is indeed best to do it yourself and use a normal Estate Agent and Letting Agent. Many such houses will need renovation and will have to be legally compliant before renting out. They will need on-going maintenance. This is easier if you are living near your investment property location. Otherwise, our company will deliver better overall value with no hassle for you – over the long term it will be more profitable for you to use us. The additional key fact is that unlike normal Letting Agents, we also take over the legal responsibilities and liabilities of the “landlord”. This means that safety, maintenance and tenant issues are not your problems. You become a true passive investor, owning the property, benefiting from the long term capital growth and guaranteed rental income – without any of the problems.
Q- I have seen cheaper prices. Can I buy cheaper?
Yes, you can – but it will cost you more! The market price does vary with what is included in the property, its underlying condition, if recently well renovated, and street location at a very local level. Historical prices are of course lower. Even the current prices on online property portals in any particular postal area or street for the same type of houses in the North can vary greatly. Houses next door to each other may have a difference of around £20,000. The reason for this is the internal state of the house and degree of renovation. These houses are below the re-build cost – thus degree of renovation has a big effect on the property price. Also be aware that properties that are derelict or for auction sell for much higher than the guide prices which are shown as very low to attract bidders. They have often come to auction as they have not sold and often have major issues. They can be end up being much more costly than properties in the open market. Even if you get a property “free of charge” with structural issues that needs everything doing (electrics, central heating, windows, roof, damp-roofing, new kitchen, new bathroom, full decoration and carpets etc), it can end up costing you more than £69,999! The overall value offered by our package is unbeatable and we work very hard at every level to achieve savings, so we can offer everything to you for just £69,999 for a 2-bed house.
Q- What is the difference between you and normal Agents?
We are also Estate Agents and Letting Agents but we do work differently. Under our system, you rent the properyt to us and we pay you a guaranteed rent and maintain the properyt at our cost. We then become the Landlord and sublet to our tenants, and take on board all of the responsibilities and liabilities of being the landlord. You are the owner, but with your permission, we become the landlord. Other agents will not do this and they make their profit from you (charging you extras and for maintenance), whereas we make our profit by keeping your property well maintained and rented out to good tenants to get the best possible rental income. We hope to get higher rental income thant we have to pay you so we can cover our costs and be profitable. Overall we are able to do this even if we make a loss on any one particular property. Many of our clients are abroad or in the South and the services provided by normal letting agents and estate agents are not suited to their needs.
Q-Do you offer Buy-to-let Investment Mortgages with your properties?
UK Residents who meet the criteria are able to buy using buy-to-let mortgages. However, up-front mortgages are difficult to get and take a long time to process. So we only offer Re-mortgages after 6 months of ownership. Please visit this page. Please note that mortgages are NOT yet available for non-UK residents. We advise all clients to buy cash and then possibly re-mrtage later if needed and if eligible.
Q- Should I consider buying under-construction or off-plan 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 and almost all are “leasehold”. The project could be cancelled and there can be delays in completion and then in renting the properties out. High rise properties may also fail the local authority fire regulations which are now very strict and may entail extra costs for leaseholder. Prices are often inflated by developers, as properties are difficult to compare. For investment, only consider property that is built and already rented out. Further, you should buy from a company that has control over the property and remains responsible to you after the sale. Many apartment sales involve multiple parties (Developer, Builder, Seller, Eventual Freeholder, Leasehold Management company, Letting Agent, Sales company). The Sales company may not have control over what happens in the long term. and any promises made are thus not delivered.
Q– Can I get a discount from the prices shown?
No. For investment properties, the prices shows are the actual final contract prices. You will not be able to purchase at a lower price. The price may be higher if there is a delay between you getting the information and signing the Reservation Agreement. This is because prices in the UK are now rising by about 7% per year on average. The only way to secure the lowest price is to make a decision sooner. Once the Reservation Agreement is signed, the price is fixed and will not increase. It is not possible to get a lower price even for multiple purchases, but there may be some saving on purchase costs.
Q – Do you sell only to overseas buyers?
No. Most of our customers now are actually from the UK – mainly from London and the South. They are looking for a ‘total investment solution’ with minimal involvement. However, we do specialise in, and are very good, at helping overseas buyers for the long term, and our group companies have offices overseas and specialise in international property. Many of the overseas buyers are actually UK nationals working overseas (UK expats).
Q- How do I get to see you at your offices?
It is best to have a Zoom Video meeting first. This will cover almost all of your questions and concerns. During 2020/2021 very few clients have visited due to coronavirus but we have still been helping clients buy an average of 35 to 40 properties each month. A visit is NOT required to buy and own an investment properyt in the UK. However, if you are buying for the first time and wish to get confidence with our company, we recommend a vist. One of our team will show you around and you can meet senior staff. Very few clients visit post-covid as online meetings are very productive.
Q- How can I view properties?
Most clients do the selection based on pictures and location maps. You can not view properties that you purchase as these are often already rented out – but we can show you typical examples of properties which are vacant. We have refined processes for clients to do everything remotely – so a visit is not essential, as the properties are guaranteed. If you do visit, it is best to do so before reservation to gain confidence in the company. Our staff can show you the different type of properties and locations. A visit takes 3 to 4 hours and a prior appointment is necessary. We are located 4 hours North of London. You have to follow our procedure and need to provide ID details and have a video meeting before any visit.
Q– What is the biggest purchase issue for overseas buyers?
The biggest issue for overseas buyers is identification to the satisfaction of your solicitor. For this, the following ID information is required:
- Address ID e.g. driving license, ID card or utility bill
Before selection ensure that your attested ID documents and 3 months bank statements showing source of funds have been returned. UK Residents can get passport copy and address ID certied at the Post Office. Overseas clients can use any lawyer or Notary to complete the confirmation of ID form and also provide lawyer’s details.
Under Money Laundering (AML) rules, all property buyers must prove the source of funds. The easiest way to do this is to ensure all required funds are in your bank account around 3 months prior to the final payment. (Generally, funds that have been present in your account for 3 month are assumed by authorities to belong to you.). In such a case, 3 months of bank statement (these can be online statements and do not need to be certified) can be provided before the final payment is made from that same account. If, however, there are any large payments into the bank account in the 3 month period, which will be used towards the property purchase, these will need to be explained (e.g. inheritance, property sale, loan) or bank statement of the source of the funds (e.g. your other bank account from where funds were transferred) may be needed before the solicitors will complete the purchase. If any such large payments have been gifted to you during the 3 months period, then a gift letter will be needed (we can draft this) and bank statement and ID of the gift donor will be required. If you provide 3 months of bank statements prior to final payment, and the whole funds required for the final payment are shown as being present at the start of the statements, then further evidence is not normally needed. Any cash deposits into your bank account can not be accepted towards UK property purchase.
Q- Can one get cheaper investment properties?
Yes. For investment properties, prices vary by rental yield. This applies all over the world. In this area it may be possible to acquire slightly lower cost properties but the rents on these are lower and they may need additional work before they can be rented out. The overal value is not better. We do not sell such properties as we have to provide guaranteed rent. So the prices on the investment property page are the lowest prices we can sell for and these prices will go up over the long term. Currently the lowest cost properties we sell are around £70,000.
Q- What are costs or fees of purchase?
For the ‘best buy’ investment properties the costs are low and fixed – the costs are fixed at £999 and include:
- Solicitor fees
- Local search fees
- 12 month building insurance
- Registration fee for UK Land Registry
Stamp duty transfer fee is now also payable to Government on these properties at rate of 3%. You can gain exemption from this if you do not own another property. This fee is additional to the purchase costs mentioned above. For a property of £60,000 stamp duty (if payable) is £1,800. If you are not resident in the UK you also have to pay 2% extra stamp duty fee. This fee was introduced by the Government after 1st April 2021
Q- Will you continue to manage the property after the first 3 years?
Yes. Our owners ask us to continue to manage on their behalf under the Net Guaranteed Rent System – but you are not tied to us. You can use any other agent or manage yourself if you wish after the first 3 years by giving us 6 months notice.
Q- What are the on-going running costs of investment properties?
We cover everything. All these items are FREE. Thus you have no property maintenance costs at all. All of these are included in our package for as long as you remain a client
-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 only thing you will need to pay for is £99 per year for property insurance after first year.
Q- Can I buy an investment property and immediately use it for myself?
No; these are already rented out at time of transfer. But after the first 3 years, you can give us 6 months notice. We can move the tenant and then you can use the property yourself if you wished to do this. Usually, our investors do not do this and they leave the properties rented out. They then use the rental income to rent something suitable for themselves as needed.
Q- I may decide to live in the UK in the distant future or my children may study there. What do you recommend?
You should get multiple lower cost investment properties now. Then, when you or your family move to the UK, re-sell these and get an ‘own use’ property which fulfils your needs at that time (your needs will change), and is near to your place of work/study or where you want to be. This will allow your money to grow at a faster rate, will be lower risk, and will provide you with more flexibility. You could also decide to keep your investment properties rented out and use the funds to rent something suitable for yourself – especially if you were only coming to the UK for 1-2 years.
Q- Can I use my property for UK Holidays?
Some clients are initially looking to use their property for your own use for short periods when they visit the UK. Unless your periods are over 4 to 6 months long, it will not be worth you considering this, as practically this is hard to achieve. Here are some of the issues:-
- You cannot leave properties in the UK empty for long periods for security reasons and because they develop damp if doors are not opened and property lived in.
- If you rent out, then the rental agreements are normally for minimum of 12 months.
- Even if you give notice to tenants to vacate, you may still need to clean / paint property; and furnish it before you can move in. Properties are normally let “un-furnished” to tenants
- You will need to switch all of the utilities (Gas, Electric, Water, Telephone Line, Internet to you names. Many of these have longer lead times to do the switch). After you leave, these need to be disconnected or switched to new tenant.
- You may wish to have holidays in other locations e.g. London – whereas all of our low cost properties are in Lancashire.
- Property may be empty for a while after you leave before tenant moves in – so you get no rent.
For all of these reasons it is better to buy a “pure investment property” and leave it rented out all of the time. Then keep the rental income in the UK and use some of the rental income for your holiday accommodation. This ends up being more flexible and lower cost and is actually what our clients end up doing – even though they may be thinking like this in the beginning.
With all of our properties, these must remain rented for at least 3 years. After this you can give us 6 months notice if you wihs to live in your property. We will move the tenant and hand over the properyt to you.
Q- Are these properties new?
No. Around 80% of the properties in the UK are almost 80 years old. In percentage terms there are very few new properties in UK. All of these properties are over 80 years old. They are more solidly built than the newer properties – usually built of real stone and slate roofs.
Q-What is the Rental Market like?
Most people in the North of UK live in these type of properties. 65% are owner occupiers living in properties they own themselves and about 35% are in the rental market – mainly owned by local investors from the same city. Most of the rental demand is at the low end of the market. We do not rent out to students and most of our tenants are long term working class couples and small families. We normally have waiting lists for our properties and there are no issues in renting out quickly. We manage our tenants well and are a good landlord – much better than the average; so our properties are always in demand and our average tenancy is double the industry average.
Q-Can my children use these properties when they come to Study in the UK?
Some 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 problems 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 your child to initially (near the university campus) 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 out all 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. The rent can be paid into a child’s bank account with permission from owner. We would need to check the ID (passport copy) of child too.
Q- Do I need a bank account to buy property in the UK?
No – Most of our overseas clients do not have a UK bank account and it is not required. Rental payments can be made into their accounts overseas – usually on a quarterly basis. Later once property is acquired, some may wish to open a non-resident UK bank account. Some may also open a GBP currency account with their own overseas bank. Under new rules, a standard UK bank account cannot be opened if you are not resident in the UK.
Q- How and when do I make payments for investment properties?
Payments are made after you have agreed to purchase and have signed the reservation agreement. Property is always priced in sterling pounds (£). The first payment is £3,000 Reservation. The remaining payment (minus the £3,000) plus stamp duty is paid prior to completion and title registration. Receipts and statements are issued after each payment. The final payment is normally a couple of months after reservation but can be extended at request of Buyer to up to 6 months if needed. Normally, under the Guaranteed Rent System the rent start to be credited to the owner 1 month after the completion date.
Q- How do I choose a specific house for investment?
We operate the 2 stage “Reserve & Select” process as explained in Section 2 of the main video.
Q- Do you offer larger properties with similar deals?
No. The rental yield percentages are less for larger properties. (Prices are higher – but rents are not much higher). Thus, we do not offer such deals on larger semi-detached or detached properties. All of the properties we sell are priced between£66,999 and £115,000.
Q- Is there anything better for investment?
No. We regularly look at other areas to see if we can achieve the same benefits; however, at present, like in other countries, lower cost properties with high rental yields are the best forms of low risk investment. Prices in other areas (London, The South, Major cities) are much higher and rental yields % are lower.
Q- My budget is much larger. Should I buy a more expensive property?
No. You should buy multiple lower cost properties if your aim is investment. These will grow better in value, give higher rental yield, will be of lower risk and provide more flexibility than one big detached property. However, complete the purchase of one property first and then buy more once you have been through the process – especially if you have not purchased in the UK before.
Q-What is the difference between Freehold and Leasehold?
There are 3 main categories in the UK.
Category 1 – Freehold and ‘999 years’ Leasehold: These properties are grouped together, as 999 years is a long time. The market value is the same, and for purchase and sale purposes these are treated in a similar way. All of the investment properties fall into this category – either freehold or ‘999 year leasehold’. All properties in the North East are pure freehold. Most of the properties in the North West (East Lancashire) are of the 999 years type. Category 1 is the best category. We only sell Category 1 properties.
Category 2 – Leasehold ’99 years’ or ‘125 years’: These types of properties are popular in London. Almost all apartments/ student flats fall into this category too. The value of such properties is less, especially if they are old with fewer years remaining on the lease. If the lease gets shorter than 60 years, the value can be affected as mortgages can be more difficult to obtain. However, now, under new laws, leases can be extended without excessive penalty.
Category 3 – Leasehold ‘3 to 20 years’ typically: Such properties should be considered as long-term rental rather than true purchase.
For all practical and value purposes ‘999’ years ownership is treated like freehold.
Q-Are student flats/pods a good investment?
These are units built by developers and managed by the student letting companies and sold by agents as investments. However, they have high management costs and service charges, come with shorter leases and cannot be sold to anyone other than an investor. This is the biggest issue as you cannot exit the investment unless you find another investor. Thus, the market value does not rise – it actually goes down as there is no genuine resale market (unlike real houses). Typically, these are sold by aggressive sales agents and we have had many customers who have contacted us wanting to exit such investments.
Q- Will I have to pay UK tax?
Most of our customers e.g. those from Europe, commonwealth or those from countries with Treaties with UK may qualify for an allowance of about £12,570 per person per year – which means that the first £12,570 per year in the UK is not taxed. This may enable you to get two or three 2-bed houses tax free. Then, if your annual income is more than £12,570 you will have to pay 20% tax on net rental income after all costs that is above this level. After purchase, we can help you with HMRC NRL registration process, so that your rent is paid to you without any deduction of tax. Vast majority of our overseas customers are able to do this. If you are a couple then you have a total allowance that is double these figures.
Q- Is buying a house better than buying a flat/apartment?
Apartments are popular in city centres; they are leasehold units so may have high service charges for common facilities. The new leases can vary and the service charges and ground rents can increase at 5 year intervals. Net rental yields are much lower than terraced houses. Over the past 10 years, many flats were built and these were sold by developers at high prices. Thus, there may be limited capital growth as prices are already too high. Off-plan or under-construction property is especially risky.
Q- Is the purchase process secure?
Yes. When purchasing the investment properties, the reservation agreement clearly lays out the terms. Funds are held in client accounts (where, legally, funds belong to the customer) and your solicitor ensures registration is completed under your name at the UK Land Registry after Purchase Completion and full payment. All of the Solicitors recommended and used in the purchase process are full regulated members of the UK Law Society.
Q- Can I buy a larger or semi or detached property with the same management and guaranteed rent deal?
We have now added a range of great value semi-detached houses for investment. These also deliver the same investment returns.
Q-What is the difference between an “own use” property and an “investment” property?
An “investment property “is one that is designed to give good rental yield and capital growth. It should be easy to resell and easy to rent out. It should have low running costs, be tax efficient and fall less in value in the event of another recession. In the UK, the lowest cost smaller properties are best suited for this. Such a property can also be used as “own use” although most clients leave them rented out.
An “own use” property is purchased with personal considerations in mind. Location (near family, work), Size, garden area, the nature of the local community, and other features that are important to the buyer are on top of the list. Typically for many buyers, such properties tend to be in the South, are larger, more expensive and not very good for investment returns.
A flexible option for buyers considering an own use property – is to buy an investment property and rent an “own use” property if and when required in the future. Use the income from the investment property to pay for the rent of the own use property. This is especially useful if your long term plans about location and requirements are not 100% finalised.
Q- Can I buy similar properties in other areas of the UK with the same management and guaranteed rent deal?
No. These properties are located in selected areas of the North West and the North East, where prices are low and rental demand is high – so these are the best for investment. We do not offer properties in other areas, as the risks are higher for both you and us due to the lower investment returns. Also, due to the popularity of these properties, we have our own management teams in the North West and North East and do not have to rely on third parties – so we can keep our costs low and also be 100% directly accountable to our clients.
Q-Should I buy the property Jointly with My Spouse or Child?
Many couples buy jointly under “Joint Ownership” so that both of them own the property equally. In the event of one passing away, the property automatically goes to the other 100%. Parent and Child also sometimes buy under Joint Ownership so that the property automatically passes to the child when the parent passes away. We allow up to 3 owners who can buy jointly and there is a small extra admin fee added to purchase costs if there are more than 2 owners.
Another type is called “Tenants in Common” multiple Ownership whereby each person has a fixed share (e.g. 25%/75% or 50/50) and if the person passes away their share goes to their estate or as per their will – not necessarily the other owner. We do not normally use this form unless specifically asked.
Q- If I wanted to re-sell my investment property in a few years, could you do this and get it done quickly?
Yes. We can help you re-sell your property and we can also buy back. Normally, your solicitor will be involved and the re-sale process will take about 3 months and you should budget for this. If you are looking to re-sell well within 2, you should not purchase, as you may not make much profit due to purchase and sales costs.
Q-What is Net Guaranteed Rent?
We offer the Net Guaranteed Rent System as standard.
Gross Rent System – 8 %: This is the market rent for properties in this area. A property costing £69,999 will on average deliver £5,600 gross rent if fully occupied for the whole year with a regularly paying tenant and no void periods. The rent you actually get would be less than this on average and if you are unlucky and get a bad tenant or a long vacant period you may get much less. On top of this the agent would charge you a management fee which can vary from 12% to 18% of the rent. They would also charge your for repairs and maintenance as these arise.
Guaranteed Rent System – 7%: The rent is paid even if no rent is collected from a tenant. Thus owner still gets rent even when:-
- -Vacant Period – property is not let out
- -Tenant Not paying rent
- -Any other reason why rent is not coming in.
Effectively the agent becomes your tenant and agrees to pay the rent no matter what. On top of this the agent would charge you a management fee which can vary from 12% to 18% of the rent. They would also charge your for repairs and maintenance as these arise.
Net Guaranteed Rent System –6%
This is the most important figure and is the system we operate. This is the net rent you get into your bank account after ALL costs and is guaranteed – no matter what. For H3 type house costing £69,999 you get Net Guaranteed Rent of £4,200 per year. On top of this you get capital growth in value with houses expected to double in value over next 10 years.
-There are NO management fees to pay us when you are on Net Guaranteed Rent. Most agencies charge 10% to 15% + VAT = 12% to 18% management fees and this would not apply.
This is the system we operate as default. Our underlying baseline net Guaranteed Rent Rate is 5% of original properyt price and this is fixed for first 3 years and then rises each year in line with rent inflation. However, in the first 3 years we give an extra 1% (so you get 6%) as our maintenance costs are less becuase properties are freshly renovated.
Overall Net Guaranteed Rent system is better than getting Gross Rent and basic Guaranteed Rent. It gives you certainty of income with no worries – and on average the net rent you actually get is better.
Q-What happens after 3 years – Do you offer Long-Term Net Guaranteed Rent?
After the first 3 years clients can continue with the Net Guaranteed Rent System. Long term, the Net Guaranteed Rate is initially 1% lower at 5% of original price (because our maintenance, repairs and re-renovation costs are higher- as property is not freshly renovated). However at the end of each calendar year, the rent is reviewed to determine the net guaranteed rent for the following whole year. Thus the rent will fall slightly at the end of the initial 3 year period and then increase at the end of each annual review. The first review will be on 31 December in the year the initial 3 year period ends. From thereafter, the total Net Rent received by Buyer is expected to increase each year, in line with increase in Average Rents. For Example, if the actual gross average rent paid by tenants has increased by 5% in the previous 12 months, then the Net Rent will be increased by 5% for the following year. Thus a client getting £4,000 per year rent after the initial 3 years, will get £4,200 next year. We have many clients who have been on these services and our Guaranteed Rent System for over 10 years.
The reason for the reduction in rate to 5% after 3 years is because our maintenance and repair costs are higher but we still wish to offer these Free of Charge. This is what our clients want. 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.
Q-Which Locations in the UK give best Long-Term Capital Growth?
Clients think that capital growth on houses is better in London and the South and is better on more expensive properties. This is not true. On average, the long-term capital growth rates on houses in all areas of the UK and all price points are remarkably similar. The average annual housing growth over the past 60 years in the UK has been around 7% per year in almost all areas of the UK and on average houses have doubled in value every 10 to 11 years. Over the past decade the average growth rate throughout the UK has been lower than this but there may be catch up in the next decade.
As an example, the 2-bed houses which we sell today for £70,000 were selling for around just £300 in all these northern areas over 70 years ago. At the same time, similar 2-bed houses in London were selling for five times the price – for £1,500 each. After 70 years, these houses in London are selling for £350,000 each compared to £70,000 here – Still 5 times more expensive. So over the very long term the average capital growth rates have in-fact been very similar.
Over the short-term however there can be differences in growth rates and our view is that capital growth in the decade to 2030 is likely to be higher in the North than the South. After a period of recession, the northern towns in the North West and the North East are now booming economically with falling unemployment, increasing population and rising housing demand. Investors are switching from South to North and prices here are set to double in the next 10 years.
Within the North capital growth are likely to be very similar in all good communities. We have properties in 28 different areas in the North, and whilst there are minor differences, the average recent historical growth in property values has also been very similar in all areas. So, providing you select a good renovated property at the correct market price in any of these 28 areas, your capital growth rate over the long term will be similar.
Q- Is Past Capital Growth a good indicator of Future Growth?
On any particular low cost property, the historical past growth rate is not helpful in forecasting future growth as it is greatly influenced by changes in the condition and renovation of the property. Thus the growth in property showing high price growth in past 5 years may not necessarily be due to housing capital growth – the property my simply have been in poor condition and was renovated and re-sold at a higher price. Thus it is very hard – even for experts, to predict the future capital growth on any particular property from the current market position which takes into account known factors. The advice we can give clients is as follows. Providing the properties are categorised well and reflect the current market position, they can select ANY property they like and the future capital growth is likely to be similar to other properties of that type. Past growth and other known factors have surprisingly little influence on future growth.
Q-What do online property prices in the North vary greatly – even on the same street? Some advertised prices are lower than yours.
Look at the current for sale prices of similar well renovated properties – not just the lowest priced properties for sale. As house prices in the North are low generally, the prices in the same area will vary on the condition of each property. Properties on the same street may vary greatly depending on condition. A property in a very poor condition requiring extensive repairs, roof work and full renovation can cost well over £20,000 to fully renovate and be thus much cheaper than a good well renovated property. As the properties we offer will be fully renovated and guaranteed for as long as you remain a client you should compare them with well renovated properties. Lower priced listings stating “guide price” or “offers over” will be auctions, where the actual selling price is much higher than guide price and there are also auction costs of around £6,000.
Q-Why are historical “sold” prices shown online much lower than current prices.
Historical sold prices on houses will be lower because of three main reasons:-
-Many properties that have been sold in the past few years have been vacant properties in a very poor conditions. Owners and investors have acquired them and renovated them fully and then rented them out. The previous sold prices are low. Website values forecast are based on these past prices and algorithms and do not take property renovation into account. They are thus not always representative of a property that has been recently renovated. You will also note that prices on the same street vary greatly in the North. This is because the status and condition of the property has a big impact on its price – as prices are much lower than the South.
-Prices have been rising in the market. Thus the historical prices will on average be lower. On houses, on average, prices have been doubling almost every 10 to 11 years
-Many properties are sold via Auctions. The actual cost of the property may thus be around £6,000 to £8,000 higher than the price recorded – as the auction costs are not recorded with the sold prices.
Q-Why are such low-cost investment properties from Find UK, better than other properties?
Such an investment property from Find UK and our process is much better than ordinary properties for many reasons: –
- The properties are selected with long-term investment in mind
- All aspects of the processes are clearly laid out beforehand in the Reservation Agreement – so eliminating uncertainty
- Properties are recently renovated with Guarantees in place to avoid future repair costs and reduce risks.
- Rental yields are guaranteed providing certainty of income.
- Processes are designed for Clients living in the South, UK expats and overseas investors or those who want a “hands off” approach, with full support for all aspects of the purchase and subsequent management.
- It is a total investment solution – not just a property purchase
Q-What are the KEY STEPS in the purchase process for a low-cost investment property?
- Discuss your requirements and determine that such an investment is suitable for your needs. Look at the property offer sheets and select a type of property. E.g. Type H2
- Provide ID information (passport copy photo page, address). All information is kept confidential, but we need this to follow AML procedures.
- Our admin team will send you the Reservation Agreement for the selected type of house e.g. 2 bed Standard H2. The minimum specification of the house type will be specified. You can switch to any other type later at property selection
- The Agreement is a key document that sets out all of the process and clearly shows what we have to do, and what you have to do. We would follow all of the terms and the process shown in the agreement.
- Arrange a Zoom Video Meeting. You can also visit prior to Reservation or later. At the visit you can see our operation, the different areas and the types of properties.
- Once you are happy with all of the terms etc., you can make a Reservation by signing the Reservation Agreement and lodging £3,000 payment into the Client Account. All funds stay in the client account until property transfer. Purchase is thus a 2-stage process with initial reservation and then property selection.
- We work with you in the next 4 to 6 weeks to agree and allocate a specific property of the selected type with which you are 100% happy and then that property is transferred to you and registered under your name at the UK land registry. A solicitor firm from a panel of local independent solicitors that have agreed fixed costs, is used to do the transfer and we oversee the process. After purchase the solicitors provide the Land Registry Title Documents and Purchase Completion Summary to the buyer.
- Clients normally go on the Net Guaranteed Rent system and your net rental income is paid into your bank account in your country or UK (or elsewhere) at end of each calendar quarter. We deal with all aspects of the property and its management. It is a full “hands-off “service. Net Guaranteed Rent is 6% of property price per year. There are no Management Fees or other costs.
- After purchase we will apply for HMRC reference number so that your rent can be paid without any deduction of income tax (up to £12,570 UK income) per year.
Q.Who are your Clients?
Our clients fall into 3 main categories: –
1.Overseas Nationals – Many overseas buyers are looking to the UK for a secure place for medium to long-term investment. They are not looking to immigrate into the UK immediately (although some may consider it in the future), but simply wish to grow their money securely and with the least amount of hassle. They usually have some link with the UK or intend to send their children to study here in the future. Many may have studied here themselves. They are looking for a company that offers a complete solution; this includes finding investment property, dealing with the purchase process and lettings and management, paying the net rent to them, dealing with UK authorities and possibly managing the future re-sale of the property. Some of them may wish to come to the UK in the future and even re-sell their investment properties to buy an ‘own use’ property.
2.UK Expats- Many of our clients are actually UK nationals who are working or living overseas. They want to invest for the long term in a safe and secure country (i.e. their own country – the UK). Some may eventually wish to retire in the UK and may sell one or more of their investment properties to get an own use property. Others will simply keep these properties for long term investment and they may pass these on to their children. Having a real asset that they own outright and that grows in value, generating good retirement income makes sense for them and they feel safe in having such a property in the UK. Many clients start with one property and in later years acquire more to build a small portfolio (see customer case studies section).
3.UK Residents – Many UK residents living in the south or in London are now considering low cost houses for investment and long-term pension type income. Prices in London and South are very high and % rental yields much lower. The same property which we sell for £60,000 here in Lancashire county near Manchester 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 ow higher. Our clients from the UK also like our “hand-off” system where we work differently to normal Estate Agents and Letting Agents and provide a much more comprehensive service looking after all aspects of the purchase and the subsequent long-term management with a Guaranteed Rent System. Our UK clients are mainly either busy professionals working in or near London or those that have retired or coming up to retirement.
Q- Why does this service seem to be exactly what I am looking for?
You are probably a UK expat or overseas national living abroad. Or you are a busy professional or retired person in the South looking for a company that does everything for you. Our services have developed over the past 12 years, based on the needs of our clients who were originally all resident overseas (they were customers of our sister property companies in Dubai). As we expanded to sell to clients from all over the World, we tailored our service and solutions to meet their requirements and keep them satisfied and happy. This is probably why our service appeals to you. It is indeed what you are looking for!
Q- I am seriously interested. What should I do next?
Discuss your requirements with us. Provide your full ID information, select the type of investment property needed and get the draft documents and agreements. Thereafter, you can decide to visit if you think you are likely to purchase. You should do your research and make a decision soon.
You should not rush to purchase anything, but it is worth getting the information as soon as you can. After a period of price drops and stability, prices are now rising in the UK. Once your reservation agreement is signed, the prices are fixed.