When looking for the perfect investment opportunity, you want to make sure you get the most value for your money.
In particular, for those looking at UK property investment, ensuring that you do this means you can claim more of your returns as profit and begin earning income from your property much faster.
You must take care when selecting your investment; it’s very easy to be captured by a property that may not necessarily be the perfect fit, which could lead to lower profit yields and unnecessary problems later down the line.
The world of property can be like a minefield.
Sometimes, when looking for high-quality properties below market value, you can be faced with an assault of hidden charges and issues that you won’t even notice until you’ve departed with your money.
This is where research comes into play – by being thorough in your decision-making, you can ensure that you’re purchasing the best value properties.
So, want to know how to make the most of UK property investment?
Here are some top tips to help you on your way!
Invest in an Affordable City
The average house price in the UK, as of November 2022, was £295,000.
For some, this price might be setting off some alarm bells.
Don’t worry, this figure looks quite daunting, but it does not depict the whole picture.
It’s important to remember that the national average considers areas such as London: where property prices are far above the rest of the nation.
The good news is that there are areas in the UK where it is much easier to find the perfect investment properties at a below-market price.
For example, take a look at the North West.
This area is seeing some of the fastest rates in the country at the moment, which means that investors could see greater levels of capital appreciation over time (because high growth mixed with low prices is an ideal combination when seeking high returns upon selling a property).
This can prominently be seen in Liverpool. As of 2023, the maritime city maintains an average price far below the national average – meaning investors are more likely to obtain below-market-value properties there.
According to Zoopla, the average property price sold in Liverpool is around £206,336 (with specific property types, like flats/apartments, at an even lower level). With low prices and high rental yields, this is one of the best areas to invest in right now – and a great example of how to make the most of below-market-value properties in the right area.
Find The Right Strategy – Consider Off-Plan
Another vital part of the process to consider is which strategy – or property type – you will be specialising in as an investor.
The key to this is simple – choose the best route to suit your needs.
Many property investors, for example, will find student properties more straightforward and affordable to pursue than residential buy-to-let properties – the trade-off being a lower potential for capital appreciation.
If you want to take advantage of the best below-market-value UK properties, most will not be sold on the open market. Instead, they will be sold exclusively through property investment companies.
Off-plan properties like this are not fully completed and are still in the construction stage – meaning that they are often sold for below-market-value prices.
There are a whole host of benefits to buying properties off-plan.
Firstly, because they are still being constructed, they will be brand-new developments and avoid the usual issues that older properties face (such as damage or typical wear and tear).
Alongside this, off-plan properties are often placed in areas that see high levels of regeneration (more on that shortly!), making them particularly lucrative investments.
As these properties are often more affordable (and usually utilise payment plans to help spread out the costs of investing), you also may not need to concern yourself with borrowing a buy-to-let mortgage. And with UK mortgage rates rising rapidly, this should be particularly alluring for investors looking to get the most value out of their money.
Consider Regeneration Efforts
Once you have zeroed in on your strategy and a general area to invest in, it’s time to look a little closer.
When it comes to making the most out of property investment, you need to turn your eye towards where the highest rental yields are available.
Rental yields will establish just how much of a return you’ll make back in your investment,
So, if an area has a 6% yield – you’ll make 6% of your investment back in a year.
Of course, to see more of a return on your investment, this means that you want this amount to be as high as possible.
However, there is a slight workaround for this.
Consider the areas that are undergoing extensive regenerative work.
These locations will usually draw in massive levels of new inhabitants looking for up-and-coming areas to live in.
Property prices will tend to be much more affordable in these regeneration hotspots than those usually seen in more traditionally popular property spots (i.e. London).
Why Should You Invest in UK Property? [2023]
Property investment in the UK is undoubtedly one of the best methods to secure a reliable and steady stream of passive income. However – if you take anything from this guide – it is only truly successful when you take the time (and effort) to fully understand all the various steps of the process before jumping right into it.
A whole host of different techniques, property types and entry points have not been mentioned in this article – all of which could be ideally suited to your investment needs.
So, take your time.
Research everything thoroughly, absorb all the necessary knowledge, and then take your first steps into the world of property investment!
