What type of property should I buy as an investment?
Smaller less expensive properties have performed much more strongly, with one bed properties showing five year rental growth of 8.2%. This is supported by more people living on their own & therefore opting to rent smaller 1 bedroom properties or living in shared multiple occupancy type accommodation as younger people don’t want to be tied down by a mortgage & want the flexibility to move.
Do we look to buy into the security of an established prime area at a premium, or a less expensive area that we think is definitely on the up, in the hope it will pay dividends in the longer term?
Average house prices in London are currently 2.3 times the UK average, the largest differential since records began in 1973, according to The Nationwide. There is still huge rental demand in the capital so it’s about finding the right property & focussing on the rental yield rather than buying with a view of capital appreciation. If you’re looking outside of the capital then look an areas with good transport links to city centres, good schools for young families and areas close to universities if you’re looking at student markets.
Is it still worth investing in the Property Market?
The rental market will still expand by more than one million households over the next 5 years despite measures to turn generation rent into generation buy!
Undersupply of rental homes, which is likely to be exacerbated by the policy changes affecting buy to let investors, will continue to underpin rents in markets where demand is strong. These include popular city centres where there is higher value employment and limited options to get on the housing ladder.
Despite Government measure to help first time buyers, we expect to see the traditional rental demographic of sharers and young professionals continue to grow, where the supply of housing is tight, costs are high and options to move into home ownership are limited.