Category Archives for "UK Property Investment"

Property Investment UK

Why property investment in the UK is so attractive

Where else could you achieve these huge benefits?

Property investment in the UK is still attractive, despite the headwinds of higher stamp duties on investment properties, a tougher borrowing environment, and changes to the tax relief on buy-to-let mortgages and wear and tear costs. Here are a few of the major reasons to invest in UK property.

Demand for property outweighs supply

The law of supply and demand has impacted the UK property market for centuries. A continuously growing population fuels demand for new homes. This boosts the price of homes and is great news for property investment in the UK.

According to the Office for National Statistics (ONS), the UK population is forecast to grow to:

  • 2 million in 2026
  • 70 million in 2029
  • 9 million in 2041

This is population growth of more than 11%. To put this in some perspective, the UK would need six cities the size of Birmingham to house it – or 13 Manchester, or 12 Liverpool. That’s a huge demand for extra housing.

UK property investment has continually proved itself as a solid investment

The average UK house price has doubled every eight to 10 years during the last 100 years. Even during financial crises, property investment in the UK has proved more resilient than other assets. When the stock market almost halved in 2008/9 because of the Global Financial Crisis, the average UK house price fell by just 14%.

Stock markets tend to have crashes every 10 years or so. The Oil Crisis was blamed for the slide in the mid-1970s. Then there was Black Monday in October 1987. The dotcom bubble burst in 2000. Throughout such stock market volatility, UK investment property has remained remarkably resilient and astoundingly stable. As ‘safe as houses’, as they say.

(Read our article “If you’re a long-term investor in stocks, you’re a long-term loser” to discover the truth your financial advisor would rather you not know.)

Inflation-proofed income – great for retirement

When you invest in buy-to-let property in the UK for the long term, you benefit from the rental income that you control.

Generally, rental prices increase in line with inflation. Sometimes they rise slower, and sometimes faster.

If you are investing for retirement, the inflation-proofing quality of buy-to-let investment property in the UK will be very attractive to you – especially when measured against the cost of an annuity designed to protect your income against inflation.

You make money on other people’s money

In the UK, you can borrow to invest in property. This means you have the potential to make money on other people’s money, thus boosting your comparable return.

As an example, let’s consider an investment of £200,000, using £50,000 of your own money as a deposit and a £150,000 buy-to-let mortgage to fund your investment. Let’s say that the mortgage interest rate is 4.5%, and you achieve a gross rental yield of 7%.

You will make a gross income of 2.5% on the £150,000 you borrowed, after allowing for the interest payment. Put another way, your gross rental income is £7,250 (7% x £50,000 + 2.5% x £150,000), or 14.5% of the capital you invested.

It gets even better. Should the property value increase by, say, 30%, it would now be worth £260,000. Before costs and tax, this is a profit of £60,000. That’s 110% on your original £50,000 investment.

Such incredible potential returns are all thanks to the benefits of leveraging in property investment.

Perfect passive income

Finally, here is the one that will really make a difference in your life. Who wants to work for their money, when you could be sitting at home (or on a beach) enjoying the fruits of someone else’s labour? Hire an investment property manager to manage your property, and benefit from the perfect passive income that could give you the lifestyle you deserve.

Summing up

For its potential to produce incredible passive income and capital growth over the long term, property investment in the UK is a highly attractive option. Projected population growth should help it to produce the kind of returns it has historically, as you benefit from using other people’s money to maximise the return on your own investment capital.

For more information about investing in UK property, contact the team Gladfish today, at  +44 207 923 6100.

Live with passion

Brett Alegre-Wood

Section 21

Section 21 Why You Can Keep Using It… For Now

So the government announced this reform, of itself it’s nothing dramatic as long as they do a much better job on the Court Reform and the Section 8 strengthening.

The problem we know is that the government is inept at reform so it’s likely to have further negative effects on the market.

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Video Transcription:

Hey, guys. Brett here, Brett’s Property Rants. What I want to do is, I want to just go through the Section 21, the end of Section 21, because the government’s come out and announced that, effectively, Section 21 is going to be no more. Now, importantly, that doesn’t mean now. They still have to go through a whole in processes and so it’s unlikely to happen before … certainly not in 2019, especially with Brexit. 2020 is more likely, but sort of back end, I imagine.

I just think that the government’s going to be so focused on the Brexit stuff that this will become a backdoor issue. But literally, they’ve hardly done any consultation. They’ve already made the decision, even though … It’s almost like to come out and say, “This is what we’re doing,” right after. And actually what they’ve said is that they want to do a further consultation on longer tenancies, and so this is one of the things that they want to do, is actually get the longer tenancies.

So basically, it’s still way long way off. Right now, I think the important thing is, as landlords, and what is going to start to hear more from me now, is we need to get together, and we need to become one voice as an industry, as a body, so we actually get heard. Because I think we’ve got to realize, the government is arrogant, and they think, “Well, there’s no way landlords are going to vote with Labor because Labor’s talking about all these rent controls and restrictions and things like that. So we’ve got them. We don’t need to worry about them. They’ll vote for us.” But I think what we need to start doing is saying, “Uh-uh, you’re not guaranteed. What we will do is disrupt you by voting for a third party or somebody else.”

Because I think they have to understand that what they’re doing is they’re trying to appease tenants, because Labor, they feel Labor’s been taking the tenants away, so, therefore, they’re doing these things to try and get the tenants back on side. Meanwhile, they’re saying, “Stick it to you, landlords.” They’re so arrogant about everything they’ve done, and that’s the thing that really peeves me off. In most businesses, you have a business and this is your income, you can deduct your expenses. If something goes wrong, you’re given a chance to put it right.

All the legislation that’s coming out now, it’s not a question of putting it right. It’s a question of, “Here’s the fine.” And the local councils are going to do it, and here’s … Effectively, what we’ve become is we’ve become the punching bag for the local councils to extort money out of. And make no mistake, most of this stuff is extortion. I mean, the very fact that one of their proposals is that with the tenant fee ban if a tenant is late 14 days, you can’t charge them interest. So basically, tenants can have an interest free loan. It’s ridiculous. Nowhere else are you able to get an interest free loan for 14 days. But, hey, punching bag landlords, that’s what they’re doing.

Anyway, back onto the Section 21. So it’s unlikely to happen straight away. There’ll be some further consultations, and that’s why I’m saying we need to come together as one voice. Really, what this all about … And look, to be fair, the whole Section 21 thing, how this affects us will depend on, number one is, how they strengthen the Section 8 and how they solve the court problems. Because make no mistake, this whole issue is not about Section 21. Section 21 has been one the most effective ways to get a tenant out, because you don’t want to rely on Section 8, as much as you would like to. There are so many times I’ve seen in court now where the judge rules with the tenant and gives them so much leeway at the expense of the landlord.

It’s like there’s no chance of getting that money back, and this is the problem. It’s almost like, “Oh, yeah. Oh, it’s a tenant. Oh, okay. I know you did the wrong thing but have another chance. Go away. Come back in two weeks time or three weeks time or six weeks time.” And then what a tenant starts to do, it starts then, “Oh, I’m sick today, and here’s my doctor’s note. So I can’t turn up. Let’s put it off.” So it’s another time. This is the sort of stuff that’s going on in the courts. Not only that, it takes so long to get. So they need to strengthen this.

One of the things that I’m now looking at is not using the court bailiffs, but actually using the High Court bailiffs. In other words, private institutions to go and get that debt. So when you’re in court, you actually ask to say, “Can you give it to the High Court?” It costs you money. So the other way’s free, there’s an admin fee. This way costs you money, but actually, you get it quicker, because with a High Court bailiff there’s no 14 days warning. It’s, “Right, get out now. We can go round there and execute that possession warrant.” There’s all these sorts of things, the questions around that.

The major thing is, okay, Section 21 goes, fine. Actually, it doesn’t matter. What we need is a way to end the tenancy when there are issues, which is Section 8. The problem with Section 8 is, most people will tell you how things go in court, which is that the tenants get lots of leeways. The problem is, it takes so long to get to court that it costs so much money. This is all about court reform and what they’re going to do there. The problem is, there’s no money in the courts. There’s no money. It’s ridiculous. I mean, it’s so underfunded. One of my best mates, he used to be a barrister in the criminal prosecution service, and it’s amazing how his income went from this down to where he actually got out of the industry voluntarily early, become a university lecturer because there was no money in it. Because the governments were austerity and austerity for like 10 years.

Look, the problem for me is what’s going to happen and what’s going to happen with Section 8. They’re the two keys issues that you need to consider and you need to continue to watch out for. But it’s not happening straight away, so you hear [inaudible 00:05:45] for it. So don’t expect definitive answers right now. Nothing changes. You can still use your Section 21s in the appropriate way. And look, for me, this is another landlord bashing thing is, most landlords don’t misuse it. Most landlords use it correctly and properly and do the right thing. But unfortunately, a small percentage do, and that’s what the shelters and the governments and that are jumping on and using, “Oh, look, this is happening all the time. We need to fix this.” It’s like, rubbish. You’re a bunch of idiots. Anyway. All right, guys, have a great day and live with passion. See you later.

Property Investment Manchester

For property investment, Manchester is hard to beat

Six reasons you will want to invest in Manchester

Manchester is a highly desirable place to work, live and play. It is being developed at a faster pace than most cities in the UK and is attracting high numbers of businesses and young professionals. For those considering property investment, Manchester should be high on your list of UK locations.

Here are six factors that underpin the potential of investing in Manchester property.

1.    Manchester is a mecca for retail and leisure enthusiasts

Manchester has some of the best retail and leisure facilities in the UK. These range from the world-renowned intu Trafford Centre, to the Arndale, Exchange Square and Market Street, and fantastic boutique shopping districts around the city.

For the culturally minded, there are more than 30 museums and galleries to visit. For fresh air enthusiasts, Manchester is a stone’s throw from several of the UK’s most beautiful rural areas.

Manchester is also the home of two of Europe’s best football teams (Manchester United and Manchester City), and Old Trafford is the home ground of Lancashire Cricket Club.

2.    Manchester is the place for exceptional education

With hundreds of schools in the city region, and 25 primary and secondary schools rated as outstanding within three miles of the city centre, parents are spoiled for choice for their children.

There are also 20 higher and further education establishments. The total student population is one of the largest in the UK – presenting an exceptional opportunity for investors in student accommodation.

3.    Manchester’s tremendous transport

Manchester benefits from road and rail networks that connect the city to all corners of the UK. When HS2 services start running, London will be only an hour away.

The Manchester region is served by regular bus services, and rail and Metrolink services.

Manchester Airport is the North’s only major international gateway. It serves more than 22 million passengers each year – a number that is expected to rise to 50 million by 2030.

4.    Manchester is a city open for business

The city region houses a population of 2.8 million in its 10 metropolitan boroughs – the largest UK city region outside of London.

With a GVA of £63 billion, Manchester’s economy is extremely diverse with major employment sectors including:

  • Financial
  • Advanced manufacturing
  • Life science and healthcare
  • Energy and environment
  • Creative, digital and technology

Many major companies are located here (including names such as Barclays, BNY Mellon, Cargill, Heinz, BAE Systems, the BBC, Google, and IBM) attracted by the city and its stock of well-educated workers. The rate of start-ups here is also strong.

Consequently, the growth of more than 2% per year in employment that Manchester has experienced in recent years is expected to continue.

5.    Regeneration and development are booming in Manchester

Manchester is the beating heart of the Northern Powerhouse, and billions have been spent and are being spent on regeneration and development. Key projects include:

  • The Manchester Enterprise Zone (business and office space, manufacturing, health, and bioscience facilities)
  • The Corridor (now the UK’s largest academic campus)
  • Manchester Science Park (a world-class science and technology hub)
  • Spinningfields (mixed-use development in the heart of the city centre, providing space for mostly financial and professional services firms)

Regeneration projects include:

  • NOMA (an £800 million project)
  • St John’s Quarter (a mixed-use development including 2,500 new homes)
  • Ancoats (developed with £1 billion from the owners of Manchester City FC)
  • Greengate (2,000 apartments to be completed in the next 15 years)
  • Middlewood Locks (A £700 million mixed-use development)
  • Kampus (200 new apartments, and independent bars and restaurants)

The latest Deloitte Crane Survey forecasts more residential units will be delivered in the next three years than in the previous 10 combined.

6.    Manchester – where the population just keeps growing

Manchester’s city population has grown by 6% in the last three years – three times the national average. With more businesses moving to the region, HS2 soon to run services here, and a young, diverse and well-educated population, this rate of growth is set to continue.

Summing up

World-class retail, leisure and education make Manchester a good place to live and learn. The incredible transport links and young and vibrant population make it a good place to do business. Add it all together, and Manchester is a great place for property investment.

You can learn more about the best property investment opportunities in Manchester by contacting the team at Gladfish.

Best Regards,

Neelam Springer

making money from property

5 Ways for making money from property in the UK

Profitable property investment strategies for all investors

Making money from property is one of the most satisfying ways of investing. And there are many strategies that you could use to do so. In this article, we describe five of the most popular.

1.    Long-term buy-to-let property investment

When you purchase buy-to-let property, you are investing for the long-term potential in a growing private rented sector in the UK. By investing wisely and getting good tenants, you should profit from inflation-proofed rental income and long-term capital gains from rising property prices.

You can take advantage of the benefits of leveraging in property investment, which massively improves the returns on your invested capital.

You can pass on many of the duties and responsibilities of being a landlord by hiring an experienced and competent investment property manager. With effortless property management, you should benefit from perfect passive income.

2.    Short-term flipping

Investors who want to profit from capital gain, without holding property for the long term, can do so by using a strategy commonly called ‘flipping’. Two ways you might flip property are:

  • Buying a property that needs refurbishing, doing the work, and selling for a profit
  • Buying off-plan property and selling before the property is complete (or shortly after completion)

If you choose the first method, making money from property this way takes discipline, a tight control of costs, and a systematic approach. You’ll need to consider that a short-term fall in property values could damage your forecast returns.

With the second method, you are somewhat protected against the potential for short-term price volatility – thanks to the discount when you invest in off-plan property. By the time you come to sell, this discount will act as a buffer against a fall in the market. If the market price has increased, this will be translated into a larger profit.

3.    High-yielding holiday lets

Investing in holiday let property is similar to investing in buy-to-let property, except that making money from property this way relies on a steady stream of short-term vacationers rather than the more stable income from longer tenancies.

There are some tax advantages over buy-to-let investment. For example, you can offset all your mortgage interest payments against your letting income, and the cost of furnishings can be deducted from your income before tax is calculated. Also, because this type of investment is classed as a business, profits become ‘relevant earnings’ for pension purposes – meaning you can increase your pension contributions.

Holiday lets pay higher yields, but you will need to market your property effectively to take full advantage. (Read our article “Is holiday let property a good investment?” for more information.)

4.    Fixed-term hotel room investments

For cash investors with a fixed timeline for their investment, and who want a guaranteed return, investing in hotel rooms may appeal. You gain exposure to a high-yielding property investment, without having to buy (and run) an entire hotel! In brief, this type of investment works as follows:

  1. Do your research and select a popular destination.
  2. Select a hotel that offers the benefit of location and good management.
  3. Buy the hotel room.
  4. Receive income from your investment (usually around 8%).
  5. Your capital is returned at the end of the fixed-term of your investment.

This could be a great way for making money from property if you have a cash pot that you don’t need now but will need in, say, five or seven years (for example, to pay school fees for your children).

5.    Diversify with developer loan notes

Have you ever wished you could make the profits that banks make when they loan money to others? Developer loan notes allow you to do just that. In effect, you lend a developer money over a fixed term to help them fund their project. In return you get:

  • A fixed (and high) rate of interest
  • A guarantee on your capital invested
  • The flexibility to take your capital back early

The amount needed to invest is smaller than for most other property investments, and you can build a portfolio of loan notes paying interest and maturing at different dates – allowing some exceptional budget planning.

Summing up

There are many ways for making money from property. The five described here are among the most common. Which is best for you depends upon your personal circumstances, investment objectives and other factors. For a confidential, no-obligation discussion of your options, contact one of the team at Gladfish today.

Cheers,

James Cox

Property Investment UK

Why property investment in the UK is so attractive

Where else could you achieve these huge benefits?

Property investment in the UK is still attractive, despite the headwinds of higher stamp duties on investment properties, a tougher borrowing environment, and changes to the tax relief on buy-to-let mortgages and wear and tear costs. Here are a few of the major reasons to invest in UK property.

Demand for property outweighs supply

The law of supply and demand has impacted the UK property market for centuries. A continuously growing population fuels demand for new homes. This boosts the price of homes and is great news for property investment in the UK.

According to the Office for National Statistics (ONS), the UK population is forecast to grow to:

  • 2 million in 2026
  • 70 million in 2029
  • 9 million in 2041

This is population growth of more than 11%. To put this in some perspective, the UK would need six cities the size of Birmingham to house it – or 13 Manchester, or 12 Liverpool. That’s a huge demand for extra housing.

UK property investment has continually proved itself as a solid investment

The average UK house price has doubled every eight to 10 years during the last 100 years. Even during financial crises, property investment in the UK has proved more resilient than other assets. When the stock market almost halved in 2008/9 because of the Global Financial Crisis, the average UK house price fell by just 14%.

Stock markets tend to have crashes every 10 years or so. The Oil Crisis was blamed for the slide in the mid-1970s. Then there was Black Monday in October 1987. The dotcom bubble burst in 2000. Throughout such stock market volatility, UK investment property has remained remarkably resilient and astoundingly stable. As ‘safe as houses’, as they say.

(Read our article “If you’re a long-term investor in stocks, you’re a long-term loser” to discover the truth your financial advisor would rather you not know.)

Inflation-proofed income – great for retirement

When you invest in buy-to-let property in the UK for the long term, you benefit from rental income that you control.

Generally, rental prices increase in line with inflation. Sometimes they rise slower, and sometimes faster.

If you are investing for retirement, the inflation-proofing quality of buy-to-let investment property in the UK will be very attractive to you – especially when measured against the cost of an annuity designed to protect your income against inflation.

You make money on other people’s money

In the UK, you can borrow to invest in property. This means you have the potential to make money on other people’s money, thus boosting your comparable return.

As an example, let’s consider an investment of £200,000, using £50,000 of your own money as a deposit and a £150,000 buy-to-let mortgage to fund your investment. Let’s say that the mortgage interest rate is 4.5%, and you achieve a gross rental yield of 7%.

You will make a gross income of 2.5% on the £150,000 you borrowed, after allowing for the interest payment. Put another way, your gross rental income is £7,250 (7% x £50,000 + 2.5% x £150,000), or 14.5% of the capital you invested.

It gets even better. Should the property value increase by, say, 30%, it would now be worth £260,000. Before costs and tax, this is a profit of £60,000. That’s 110% on your original £50,000 investment.

Such incredible potential returns are all thanks to the benefits of leveraging in property investment.

Perfect passive income

Finally, here is the one that will really make a difference to your life. Who wants to work for their money, when you could be sitting at home (or on a beach) enjoying the fruits of someone else’s labour? Hire an investment property manager to manage your property, and benefit from perfect passive income that could give you the lifestyle you deserve.

Summing up

For its potential to produce incredible passive income and capital growth over the long term, property investment in the UK is a highly attractive option. Projected population growth should help it to produce the kind of returns it has historically, as you benefit from using other people’s money to maximise the return on your own investment capital.

For more information about investing in UK property, contact the team Gladfish today,

Cheers,

James Cox

what_type_or_residential_property_is_best_for_retirement_income

What type of residential property is best for retirement income?

Village, high-yield, or inner city?

A new client, Scott, spoke to me a week or so ago and asked about property as a retirement income generator. He’d been told by his financial advisor that an annuity would provide the best and safest income in retirement. A friend of his had said that he’d be better off putting his money into buy-to-let property. Being an intelligent kind of guy, he wanted to investigate further before making a decision. Read More
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