Going Against the Tide
Parmdeep Vadesha
September 03, 2008
While many have heralded the stabilisation of the UK market, a survey from the Building Societies Association revealed some fairly unexpected results. Among the respondents who were asked if now is a good time to purchase a property, a significant 27 per cent, or over one in four, said that now is the time to invest in property. This resilient group of people has gone against the beliefs of many who are discouraged by the depressing forecasts, predictions of interest rate increases and an overall recession.
For those who are keen on investing in bricks and mortar for investment purposes will be glad to know that they are making the right decision. According to the latest Buy-to-Let Index from Paragon Mortgages, rental increases have combined with declining property prices to improve landlords´rental income profits or the percentage of the property´s value obtained in rent every year. According to the report, landlord´s rental earnings have risen by almost 12 per cent over the past year and by 6 per cent over the past 6 months. Paragon Mortgages states that a healthy tenant demand has been the driving factor in the rent increases, allowing landlords to reach greater yields than they have seen for over two years.
In addition to this, a new report from Centre for Cities also predicts that the private rented sector will witness an upsurge in size by a remarkable 50 per cent by 2021. The report quoted a Hometrack research that predicted 3.6 million renters in 2021. The increase will be brought about by a strong demand from young and mobile professionals, students, migrant workers, one-person households, and those who can´t afford to buy properties.
With all the positive news, it makes sense to invest in property, or to expand existing portfolios. For budding developers, the most common strategy is to buy a property cheap and have it refurbished, either to sell it for profit or to let it. Before you set out for that purchase, here are some pointers you should consider:
1. Check how long the property has been on the market. If it has been for sale for more than a few months, it means that it may not be deemed a profitable property at the current asking price unless you can see an angle others have missed.
2. When buying an older property, you should be prepared for some surprises. Make sure that you visit the property several times with different tradespeople so that you will be able to gather more information.
3. Seek the help of professionals. Engage the services of roofers, timber and damp experts and electricians. They will be able to provide you with estimates and are often more helpful than a surveyor in the early stages.
4. If you are interested in a property in need of modernisation, be sure not to exceed your limit. For starters, you can opt for a dated property instead of a wreck. A new central heating, bathroom, kitchen and re-decoration will do wonders for an older property.
5. Set a budget and add in some contingency financial support. You could begin the renovation process with a small cash fund. When you have done redecoration and carpeting, you could get a small re-mortgage, which can go towards a new kitchen or restoring fireplaces.
With the market presenting a lucrative opportunity for property investors, it seems sensible to implement a financial strategy that´s bound to provide monetary refuge in the long run.
For those who are keen on investing in bricks and mortar for investment purposes will be glad to know that they are making the right decision. According to the latest Buy-to-Let Index from Paragon Mortgages, rental increases have combined with declining property prices to improve landlords´rental income profits or the percentage of the property´s value obtained in rent every year. According to the report, landlord´s rental earnings have risen by almost 12 per cent over the past year and by 6 per cent over the past 6 months. Paragon Mortgages states that a healthy tenant demand has been the driving factor in the rent increases, allowing landlords to reach greater yields than they have seen for over two years.
In addition to this, a new report from Centre for Cities also predicts that the private rented sector will witness an upsurge in size by a remarkable 50 per cent by 2021. The report quoted a Hometrack research that predicted 3.6 million renters in 2021. The increase will be brought about by a strong demand from young and mobile professionals, students, migrant workers, one-person households, and those who can´t afford to buy properties.
With all the positive news, it makes sense to invest in property, or to expand existing portfolios. For budding developers, the most common strategy is to buy a property cheap and have it refurbished, either to sell it for profit or to let it. Before you set out for that purchase, here are some pointers you should consider:
1. Check how long the property has been on the market. If it has been for sale for more than a few months, it means that it may not be deemed a profitable property at the current asking price unless you can see an angle others have missed.
2. When buying an older property, you should be prepared for some surprises. Make sure that you visit the property several times with different tradespeople so that you will be able to gather more information.
3. Seek the help of professionals. Engage the services of roofers, timber and damp experts and electricians. They will be able to provide you with estimates and are often more helpful than a surveyor in the early stages.
4. If you are interested in a property in need of modernisation, be sure not to exceed your limit. For starters, you can opt for a dated property instead of a wreck. A new central heating, bathroom, kitchen and re-decoration will do wonders for an older property.
5. Set a budget and add in some contingency financial support. You could begin the renovation process with a small cash fund. When you have done redecoration and carpeting, you could get a small re-mortgage, which can go towards a new kitchen or restoring fireplaces.
With the market presenting a lucrative opportunity for property investors, it seems sensible to implement a financial strategy that´s bound to provide monetary refuge in the long run.
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