Fresh Invest | Property Investments | Overseas Property Investment | UK Property Investments | Buy to Let Property | Investment Properties

Registered? Sign in here. Not registered? Sign up to for great benefits. (lost your password?)

Freephone: 0800 043 6956 info@freshinvest.co.uk

registered investor login
Fresh Invest

UK Buying Guide

The UK has for many years been one of the cornerstones of the world economy, what happens in the US and UK normally reflects worldwide.

The Country:

Within the EU the UK also plays an important part. Our economy has moved more towards that of the serviced industry from an industrial production background.

The fact that our economy is one of the oldest and most successful in the world makes investing in the UK an attractive proposition.

Property Values:

Property values in the UK seem to follow a 20 year cycle, with prices steadily increasing from the late 80’s / early 90’s until 2008.

The hope is that prices will bottom out either 2009 or 2010 and then the prospect of the extended build programme for the London Olympics in 2013 will give the economy a much needed boost.

One thing that we cannot escape from is that we are an island with limited space and an ever increasing population, because of this land is always at a premium.

There is a severe shortage of property and developers struggle to keep up with the necessary build programme.

Investment:

The U.K investor has had a long and profitable relationship with property; this can be traced to the fact that a large amount of U.K nationals own their own homes unlike many other European countries.

The fact that many prospective investors have seen their own property increase in value over the last 20 years makes it a lot easy to view property as an investment; they can look at their capital appreciation in property against their appreciation of their shares.

The UK is seen by many as a “safe bet” for long term property growth, especially London and some areas of the South.

This has seen a lot of European property funds invest heavily in these areas, trading high profile buildings between themselves, may German property funds have taken advantage of the decrease in values to expand their portfolios.

Purchase Procedure:

Generally investors will purchase their properties with a mortgage.

Mortgages in the UK are easily obtainable and are generally offered at between 75%-90% loan to value on a buy to let basis.

Buy to let mortgages are also generally linked to what rental the property can command.

Residential purchases are between 75%-100% loan to value and the interest rates are normally more favorable than buy to let rates.

Investors will also need a good mortgage broker and solicitor in order to make the purchase as seamless as possible.

Summary:

House prices have fallen substantially during the year 2007-2008 from a relentless 10 year rise.

With the UK economy falling into recession there is unlikely to be a recovery in the near future however this creates interesting investment opportunities as The Bank of England reduces rates to stimulate the economy  the reducing prices of all property gives increasing yields and were the prices not falling returns are substantially above bank rates.

Investment is about timing, the underlying stock of residential property needs to be improved and extended for the first time buyers demand that for many years have been suppressed while prices have cantered away.

As the bottom of the property ladder becomes reachable there comes a time when prices become affordable to this substantial market segment but due to a moribund new build programme demand will exceed supply and prices will rise again.

As prices fall “negative equity” spreads to purchasers who moved during the previous 1-3 years and who took maximum loans to value mortgages many will cut their losses and move to the rental sector.