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Investor Guides
Guide type: Property Investor
Property Investor Guide for UK Residents
27th June 2013
As a property investor, you’ll know that your buying decisions depend on access to accurate and timely information about the property market – so welcome to this Galliard guide to successful property investment. It contains statistical data about the current property market, together with some useful hints about identifying and running properties that will maximise your return on investment.
Recent Statistics
Landlords Growing Their Investments
Around 40% of Association of Residential Letting Agent (ARLA) members have observed an upward swing in the number of landlords wanting to grow their private rental sector investment – a rise of around 30% over recent months.
National Property Statistics
The Office for National Statistics reports that for the period April 2012 to April 2013 the property market experienced the following:
England: 2.8% growth
Wales: 6.2% growth
London: 6% growth
East Midlands: 3.6% growth
Scotland: 1.2% decrease
Northern Ireland: 0.8% decrease
Energy Efficiency Increases House Prices
The UK Department of Energy and Climate Change (DECC) declares that property values can be enhanced by up to 40% by undertaking energy-efficient alterations. Specifically, the DECC observed that adding features such as loft insulation and energy-efficient boilers (to increase energy rating band from G to E) can increase the sale price by an average of £16,000, and up to £41,000 in London.
Top-Performing UK Locations
The Land Registry produces some revealing statistics with regard to hot-spots for house price performance, and data from the last 12 months reveals that London boroughs take up 16 of the top 20 places for house price growth. Popular belief is that the whole of London continues to experience an upturn in house prices, though outer boroughs such as Dagenham and Barking saw slight falls during this period.
Top 20 House Price Increases 2012-2013
| Area | Percentage increase |
|---|---|
| 1. Merthyr Tydfil Council | 15.08% |
| 2. LONDON Hammersmith and Fulham | 13.05% |
| 3. Blaenau Gwent Council | 11.49% |
| 4. LONDON Kensington and Chelsea | 11.48% |
| 5. LONDON Camden | 10.22% |
| 6. LONDON City of Westminster | 9.18% |
| 7. LONDON Wandsworth | 8.94% |
| 8. LONDON Hackney | 8.89% |
| 9. LONDON Haringey | 8.84% |
| 10. LONDON Merton | 8.11% |
| 11. LONDON Richmond Upon Thames | 7.89% |
| 12. LONDON Lambeth | 7.62% |
| 13. LONDON Islington | 7.13% |
| 14. LONDON Southwark | 7.00% |
| 15. LONDON Greater London Council | 6.28% |
| 16. LONDON Kingston upon Thames | 5.87% |
| 17. Milton Keynes Council | 5.31% |
| 18. LONDON AREA Windsor & Maidenhead Council | 5.01% |
| 19. LONDON AREA Harrow | 4.29% |
| 20. LONDON Barnet | 4.27% |
Handy Tips When Buying
Before You Do Anything, Do Your Homework
Successful property investment is founded on accurate and comprehensive knowledge, so make sure your activities are largely funded by your own personal knowledge of professional property investment. Read books, study relevant press reports and pick up free guides on the web; you might also consider forums, exhibitions and courses that offer strategies for professional landlords.
You can also talk to us at Galliard, and we’d be happy to give you considered professional advice – plus we run periodic seminars about the property market, which you’ll find invaluable as a source of up-to-the-minute information and guidance.
Look for Capital Growth
As a professional property investor, whilst you’ll be taking into account rental income, you should also be looking at capital growth and monitoring the rise in your property portfolio values until it’s the right time to sell.
Seek Professional Advice
You’ll probably be using your capital growth to underwrite on-going property investments, in which case, again, you should talk to Galliard – especially if you want to know where to find the property-buying hotspots in London and the South East. In addition, we have a wide choice of properties ideal for the wise investor in the professional letting market.
Taking the Refurbishment Route
If you’re going to buy property with a view to renovating, refurbishment or substantial re-development, make sure you’ve got all the financial bases covered. Property development of this nature almost always ends up costing you more than you anticipated (as with domestic re-builds) unless you’ve got the costs absolutely clear before you start.
Rapid Acquisition and Sale
As a professional property investor, you may simply wish to buy properties speculatively with a view to rapid and profitable sell-on, but be aware that this can be a high-risk enterprise and you’ll need plenty of fallback capital if you’re going to be successful and achieve a profitable balance between gains, break-evens and losses. Galliard has a large portfolio of properties throughout London and the South East, ranging from studio flats to substantial family properties (plus commercial premises and mixed use developments) so we’re in an excellent position to guide you on wise buys.
Buying New-Build
If you’re considering buying new-build property for investment, here are some guidelines that will help you make the right decision.
Assessing the Right Price
If you have a new-build property in mind, but you’re unsure whether the selling price is reasonable because you don’t have anything to measure it against, compare it with already-sold property that, along with its sale price, appears on the Land Registry - or compare it with second-hand properties. At Galliard, we have a wide range of brand-new properties for sale that are ideal for renting – and given our commitment to selling quality properties at competitive prices, you can be confident that our prices will be very fair and highly attractive.
Enjoy Low Maintenance Costs
Received wisdom suggests that, for a second-hand property, around 10% of your rental income will go towards maintenance, whilst NHBC-covered new-builds shouldn’t have any maintenance overheads for the first several years. The NHBC warranty provides two years’ cover for internal and external defects, followed by eight years’ cover for external defects. All Galliard properties are covered by NHBC guarantees, plus we build to standards that mean you can expect to enjoy long-term, trouble-free property ownership.
Benefit From Environmentally-Friendly Design
It’s reassuring to know that new-build properties use around 40% less energy than homes built 20 years ago or more. This means lower energy usage and substantially lower bills for tenants – a fact that will make your new-build property infinitely more attractive to potential tenants than pre-1990s housing; so make sure potential tenants are fully aware of this outstanding benefit. That aside, people in general are becoming far more energy-conscious, which will make your property that much more desirable. In addition, new-build properties produce 60% less CO2 emissions than period properties. Galliard properties incorporate a range of energy-saving devices and materials, and so make particularly attractive rental properties that attract low energy bills.
Attract Good Tenants
Be discerning about tenants, and try to choose those whose incomes, lifestyles and behavior are more likely to ensure that your new-build property will remain in pristine condition under their occupation. Good tenants are generally attracted by clean, tidy and smart new properties and are more likely to keep them in that condition.
Rent Your Property Quickly and Easily
Given that your new-build home is likely to have been built in accordance with high building standards (structure, ventilation, sound insulation, security, electrical and fire safety), your property will be highly desirable and should quickly attract tenants, thus minimising vacant periods.