Property Investment Advice & Guide
It’s an interesting time for investors. Over the past 10 years many people have made a lot of money through property investment in the UK. Everyone's and his dog has been a property investor, knows the market and is able to give you property investment advice. But over the last 2 years we have seen a serious dip in property prices due to the credit crunch causing lack of mortgage funds and lenders unwillingness to lend. Mortgage Providers have been seriously hit, many having gone out of business completely probably never to be seen again. Buy to let mortgages have especially been hit with a huge drop in products available and loan to values slashed. At one point it was looking like we were only going to be left with BM solutions. With this huge upset and uncertainty in the financial industry, it’s no surprise that people are wary about buying property at the moment. The credit crunch has obviously had a missive knock on effect. Less equity in your property gives you a lack of confidence and consequently people tighten their belts. This has an obvious effect on the retail sector with many repercussions to other business's and inevitably and unfortunately people loss their jobs. Homeowners are then unable to pay their mortgages, repossessions start rising and lenders become more frightened to lend. Its a vicious circle and one that takes time to re-adjust.
I'm drowning here, and your describing the water!
OK so what does this mean for the property investor? Is investment in the UK property market still a good idea? Well we believe it is and its possibly one of the best times to become an investor in UK property. We are not going to suggest that all properties in the UK are going up in value now so go invest. To be honest there is a few places in the UK that will still see drops in prices. But on the whole and over the last few months’ things are definitely starting to turn. The signs are looking good and the intelligent investors should really be able to see that now is the time to buy UK property investment. Why invest at the height of a property boom when you can invest during a property bust. Its the same with stocks and shares. Many people buy shares when they see prices going up. This is the point where the successful stockbroker has already been in and out laughing all the way to the bank. As we said before though, its not just a case of buying any property and seeing it raise in value. You need to be a bit more clued up and buy in the right places and at the right price! Price is where we can help, but we always advise to do your own due diligence. On the whole is seems we are at the bottom of the market and when buying property below market value you are basically giving your self a buffer if prices do still go down. But you will still only maximize profit if you take into account the area and prospects within that area. You need to double check why that property is below market value. Is it because nobody can sell a property in that area and nobody wants to move there. Maybe there aren’t any jobs around locally so you aren’t going to get "new meat" moving into the area. To negate this issue, many investors look to buy around City's such as Manchester or Leeds and of course London. London is a great example of how a big city can be a safe bet for property investment. But if you want to go that step further you will need to do further research and look at the future prospects of the area. Is there maybe a new train service starting which will give access to a major city? Maybe there's been a serious investment of business's in the area which is going to mean lots of jobs causing a high demand on property. As you can see there are a lot of things that can effect property prices but on the whole its a fairly safe bet if you do your due diligence.
Supply Vs Demand
The UK is an island, and they are not building any more land. There is a massive shortage of housing and its only going to get worse. So lets keep an eye on the mortgage lenders because once they do start lending again, people will want to start buying properties again which will create demand. And we all know high demand vs. a shortage will create price rises. So its just a fact that property investment is a good idea. But do your research and you can be a lot more successful. We are currently starting to supply some research on area's of possible interest so feel free to use the resources below to get yourself started.
Bath - Birmingham - Bournemouth - Bradford - Brighton & Hove - Bristol - Cambridge - Canterbury - Cardiff - Chester - Coventry - Derby - Edinburgh - Exeter - Glasgow - Gloucester - Leeds - Leicester - Liverpool - London - Manchester - Newcastle - Norwich - Nottingham - Oxford - Peterborough - Plymouth - Portsmouth - Preston - Salford - Sheffield - Southampton - Southend
Overseas Investor Guide & Resources
Its always been an attractive proposition to own and invest in overseas property. "Buy the property of your dreams and live a life of luxury". But unfortunately the reality for many people has been a nightmare. 10 years ago Spain was all the rage. British people were all lining up trying to buy that place in the sun and with 80% mortgages and properties at relatively low prices it was now a reality. The Uk was seeing a fantastic growth in their own properties, allowing everyone to re mortgage, release that equity and spend it on a property overseas. Spain was the number one and they just couldn't build enough properties. Or could they? Places like Torrevieja and parts of Malaga where just building sites lined with apartments blocks and townhouse's full of promise. But it was inevitable that this bubble would burst at some point. These properties were just not worth the money!
The property crash has been international and many places especially in Europe have seen a massive drop in prices. Some people would suggest that the prices are now where they should be. The fact is that lenders overseas are also not lending so much. Its next to impossible to borrow money in some places such as the USA so properties in Florida have seen prices drop by up to 70%. A good sign of a properties value no matter where it is would be the rental yield. In the UK you will find that buy to let properties normally bring in about 4 to 6% of their value each year as an income. Properties in Florida for example are now showing yields of up to 12% which means you could say they should be worth more money. But with out the lending facilities people just cannot buy these properties and therefore the values drop. Here is a sure sign though that once lenders start lending again, people will want to buy these properties with 12% yield which then pushes the prices up again.
Where do I buy?
When offering property investment advice, there is a lot of factors you need to think about especially when buying overseas property. Is it just an investment or is it more of a holiday home. You will notice that many of the overseas property that WPI promotes will have a mixture of investment and 4/5 weeks usage each year.
3 Rules Of Buying Overseas Investment Property
- Is the property near an international airport? - Properties that you are looking to rent out for holidays should be at least within an hour of an airport. Or where there is due to be an airport. Prices will often go up once a certain air line has started flying to the destination such as Ryan Air or Easy jet.
- Is the property near the beach? - Beach front property will always rent out before a property further away. Properties in Spain suffer a lot unless they are near the beach. This is why you will notice that many developers who build inland will now build around a golf course to add attraction to the development. If its not near the beach then are there other points of interest near by such as Disney.
- What does it look like? - Its no good buying something that's really cheap just because its cheap. Does it have a nice balcony and swimming pool. It is a good size? Would you like to go on holiday there?
These are just a few of the general things that you need to think about but obviously places vary quite a lot and you need to be looking into the financial stability of the country and future prospects of the area. Below is a resource that we will be adding to over the next few months but it may help you in your research when looking to invest overseas.
General Investment Property Advice
Below is some more general property investment advice for those starting out and looking to build a property portfolio. Remember WPI do send out offers of UK property below market value and overseas property below market value. Please sign up to our property club above and start receiving property investment deals straight into your mail box for free.
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