Successful property investment Q&A with Allison Thompson, National Lettings Managing Director, Leaders Romans Group

  • A guide to the UK’s constantly changing property market and its laws

The UK property market is constantly changing and, with over 168 laws dictating over 400 rules and regulations, keeping on top of what must be abided by as a landlord can be challenging and sometimes costly. Because changes to UK laws and regulations can happen several times a year and sometimes at short notice, it is vital that landlords keep their fingers on the pulse.

As a first-time investor these rules and regulations can seem overwhelming, so it is important to engage an ARLA Propertymark or RICS member agent to help let and manage your property and provide advice and knowledge.

  • The most common mistakes made when investing in property (and how to avoid them)

One of the most common mistakes property investors make is not having a plan or clear investment goal. Investors may have different motives for investing in a property, whether it’s rental yield, or for family or pension investment, but not everyone has a clear goal and plan to achieve this, and this is essential.

Another common mistake is not having cash for contingencies, or unexpected circumstances. As it is known in life, not everything goes to plan, so it is always better to plan and prepare for every scenario possible, than be under-prepared.

  • How to buy investment properties significantly below market value

Property auctions have increased in demand over the years as an opportunity for investors to acquire properties below market value. While purchasing through an auctions process does offer the opportunity to acquire a property under market value, some properties then require significant up-front costs for refurbishment for the property to then be available to let. So, it is important to be mindful of the possible additional expenses when you’re buying to let through auctions.

  • Choosing your mortgage and property

Always use a broker when choosing a mortgage – they’re the experts in their field and can help find the best opportunities available and best investment for you. When acquiring a property, it is important to remember that stamp duty, legal fees and taxation are additional fees on top of the price for the property and these are all things brokers can help manage and sort.

Every investment is different and will always be different depending on the investor, finances, and property choice.

  • What type of property to buy to maximise your profit potential?

Property prices have done well across the UK over the last couple of years, with some areas seeing double-digit percentage rises, which is great news for landlords. As for what type of property to buy, this depends solely on the investors’ appetite for stability or higher profits – whether to invest in a property for single occupants or multiple occupants. According to Paragon’s PRS trends report for Q4 2021 the average yield by property was 7.5% for HMOs, 6.3% for bungalows and terraces and 6.1% for semi-detached and detached and 5.4% for flats.

Investing in a property for single occupants provides an investor with a stable rental income, while investing in a property for multiple occupants can provide higher rental yield, but it also requires more management and bigger capital expenditure.

  • Where the best places are to look for property to buy

Rent prices across the country are continuing to rise with demand growing and stock shortages. As for the best location in the UK, the Liverpool property market is ‘on fire’ at the moment when it comes to capital growth in cities. According to Zoopla, the property price growth over the year to February 2022 was higher in Liverpool than in any of the other major city.

For property types in Liverpool, terrace prices increased by 10%, flats by 11%, semis by 12% and detached homes by a staggering 14%. Rental prices in Liverpool have been rising at almost double the UK average rate. Investment and expansion in Liverpool is set to ensure some great opportunities for price and rental growth for landlords and investors.

 

 Leaders Romans Group

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