With global uncertainty affecting every sector of the economy, a key question for property investors is “How stable is the UK property market?” With rates set to fall more than they have in over a decade, the UK property market could be in a bubble. But contrary to popular belief, it’s not just house prices which are falling – commercial property is also suffering at the hands of a slowing global economy. With all of this said, how should property investors take advantage of the situation and make some significant profits?
The answer to that question lies in two areas: the housing market in London and Manchester, and the ongoing revitalisation of the cities by developers such as Manchester’s First Manchester and Liverpool’s Central Station. Property has always been seen as an attractive investment, with most investors opting to put their cash in bricks and mortar, ideally as an investment for the future, rather than a short term, high yield solution. However, despite recent changes to tax rules in the UK, there still are great returns to be had from investing in commercial property. In order to maximise on these returns, property investors will need to look beyond the capital assets in London and Manchester, and focus on the area’s prime residential and commercial centres. Two of the most popular locations for UK property investment in Manchester and London are Burnley and Cheshire, where high demand from renters combined with a stable, affordable housing market provide strong incentive to both property buyers and existing tenants.
One of the major advantages of making UK property investment ventures in Manchester and London is the strong employment levels in both of these cities. In addition to the famous Manchester job parks, Cheshire is home to thousands of high skilled jobs, predominantly in the finance, insurance and banking industries. This includes positions like those provided by the Manchester Teachers Union and the GMU. The population is also ideal for high density, mid-size businesses in the financial sector, which is especially useful for investors looking to take advantage of the economic recession to make a profit on their investments. While Manchester itself is a lively city, many people prefer to live in the centre of the town, rather than the outskirts, which is where the arts and culture come into their own. There are also many cultural attractions such as the famous Cheshire Cat for lovers of theatre and music.
It is also becoming more common for UK property investment ventures to target areas outside of central London. One of the reasons for this is that it is easier to tap into the other parts of the country by taking an international approach. Many of the other large cities in England have relatively well established social environments, with professional services and amenities, so it is often possible for investors to access the other parts of the country via travel or relocation services. By investing outside London, it is also possible to tap into the educational and cultural offerings offered in other parts of the country. Many schools are now offering classes through distance learning which makes it possible for interested investors to get a better education without the commitment that attending classes regularly would entail. As well as this, there is the added benefit that the city offers a more pleasant living environment with nice places to eat and shop for locals.
Investment in the UK property market can be further strengthened by taking part in exchange or futures trading for gold. This allows the investor to take advantage of fluctuating gold prices and increase his investment return by buying at the right time. However, there is a downside to this strategy and that is that foreign investors who participate in gold exchange or futures trading must have sizeable funding available in order to cover any potential losses that may occur during the period. This has made investors willing to look at alternative investment strategies such as gold certificates, which allow them to diversify their portfolio without the need for large amounts of funding.
Another beneficial UK property investment strategy is through the purchase of rental properties. By investing through a real estate agent, the investor is able to buy a property at a cheaper rate than that of the market value. The rental income that a landlord receives is dependent upon the amount of tenants that he is able to manage on a regular basis. It also allows many investors to own multiple units in one rental property.
One of the oldest but still a very effective UK investment strategy is the purchase of shares through auction houses. There is a great demand for these types of auction houses in UK as they are able to accommodate a high number of prospective investors. Unlike the sale of goods which are always on offer, the purchase of shares at auction houses is not generally advertised in local newspapers, leading to a greater level of competition among bidders. Although this can sometimes work against the investor, it is still considered to be one of the most popular investment types.
Investment in property through the purchase of apartments is often met with great success by landlords. The increase in tenant demand is often met with an increase in rent prices. There are many apartment complexes that have been constructed with such ease and efficiency by landlords that they are often able to increase their rents without much difficulty. Such investment opportunities have allowed many landlords to earn significant returns, particularly when they are involved in tenant exchanges.