UK Properties Continue to Claim Higher Returns on Investment

  • November 23, 2021

UK Properties Continue to Claim Higher Returns on Investment

Why do people invest in real estate? It is one of the most commonly asked questions with a simple answer: to increase their wealth. The motivation may differ from investors to investors such as some may want to save for their retirement, some may want to sponsor their children for college funds, others may have reason to save money for a life event – but having a huge sum of money is the basis of all real estate investments.

How an investment can be successful?

A key feature of successful property investment is seeing its value increasing with time. For that, you cannot invest in any property, development or area but have to conduct thorough research before investing your money. With transactions gradually returning to a normal level after being dramatically disrupted by the COVID-19 led pandemic – property prices are showing slow yet continuous growth in all major realty markets across the globe. If we talk about the UK realty market, we must know about major areas, prime residential developments, and be sure about the investment agenda before investing in UK properties.

Notes before beginning investment journey

  • Real estate is a suitable investment vehicle – only for those, who believe in waiting and investing for the long-term. There is nothing like an “overnight success” in real estate, as the plan is to meet your long-term goals and generate wealth out of it in future but not on an immediate basis.
  • Always focus on diversifying your real estate portfolio that cannot just become a stable secondary source of income but contribute towards capital growth, too.
  • Though residential properties are dubbed to generate income year round yet there will be void periods and the market will fluctuate with your plan. Being an investor, you must be ready for highs and lows in a long-term patch.

How to earn good returns on investment (ROI)?

Investment in London properties or any other stable realty market such as Dubai tends to be less volatile than other investment vehicles. It is considered as the most reliable, privileged, and dependable way to make wealth – as with time, not just the capital grows due to the worth of property but the investor can earn regular income by renting a property. However, the question is still there that how can one achieve hefty returns from their real estate investment?

How to achieve good returns in real estate investment?

Statistically, an ideal investment property must offer capital appreciation of around 10 percent per annum and a major chunk of this profit depends upon the location of the property. Therefore, all real estate agents emphasize the location of property, before purchasing.

Always invest in a growing market

If you cannot invest in already established markets, you must search for a growing location that has the potential to grow your wealth. According to reports, mainstream housing prices will constantly increase across the UK from now till 2026 – with properties located on the outskirts of London showing the strongest price growth.

This rise will also start shrinking year by year with a maximum achieved in 2022 – followed by a further dip in the years after that. For a middle-income person, it is not affordable to buy a piece of land or property in an established area, the remaining option is to either opt for a smaller property or pick another location that offers growth potential.

The property must have basic amenities

Life has become faster and no one has the time to explore far-flung areas in order to find the right grocery shops, healthcare facilities, parks or schools. If you want to grow capital and also earn a stable income, all basic amenities must be in proximity to the investment property including a shopping mall, parks, playgrounds, schools, and healthcare facilities. These facilities attract people, which will eventually increase the value of the property and the area. Otherwise, the area must have a scope of expansion, and here comes the credibility of the developer. That is why; most of the developers announce major amenities in their upcoming residential projects to appeal to the masses.

The area must have scope for business and commercial activities

It may sound controversial in the beginning but a residential area can benefit from the presence of large companies nearby. Always keep an eye on the area where a large company is moving its operations or already existing. The majority of established companies either provide residences to their employees or offer a residential allowance, and the employees tend to reside in nearby areas. A large establishment will increase the value of properties in that area.

Areas with strong rental yields

Capital gains is an important factor to gauge the successful outcome of investment in a property, but strong rental yields can also make the investment worthwhile over time. If we look at some of the best areas in UK with strong rental yields, it may not be astonishing to find London at the top. The year 2021 has already proven itself strong, as tenants’ demand was strong for London – despite racing for space is observed due to pandemic and need for a bigger space was obvious. Other than London, annual rental growth was strong enough to be noticeable in areas like Manchester, Edinburgh, and Birmingham – to name a few.

A strong demand was observed for high-end properties in UK in all these areas, with London being on the top of the list.

Team Copperstones is always there to help you make a right and well-informed investment decision, so if you are interested in buying properties in London or any other key areas of the UK, you can contact us through +44 203 888 5555