So I talked in my previous blog about why I think property is a great tool to create income and the lifestyle you want. But I would not invest in property anywhere, for example I am not rushing to buy up properties in Afghanistan at the moment.
I am sure you will agree that there might be some bad places to buy at the moment, there are also some really good places to buy and I think that the UK is one of the best places to buy property.
There are a lot of reason for this, so let me explain why.
- Demand for Property is Growing
Quite simply, the UK population is growing.
Now not to get into a political discussion about the issue, but a big driver for this UK population growth is immigration. In the year to September 2017, government statistics show that 244,000 more people came into the UK than left it in the 12 months. A quarter of a million people in one year!
Now you may think that a lot of this is due to EU immigration, and once BREXIT happens the numbers will fall drastically but the 70% of this immigration comes from non-EU citizens so will be unaffected by BREXIT.
The government has targets to reduce the net migration figure into the UK, but its target would still see 100,000 more people coming into the country than leaving it each year. It remains to be seen whether they get anywhere near this figure, they are certainly a long way off at the moment.
Whether it is 100,000 or 244,000, these people will come to the UK needing accommodation, pushing up demand for property. Many of these people will not want to buy a house or not be in a position to buy a house, meaning that the demand for rental property will increase as well as the overall demand for property.
- Supply is Growing But Not Fast Enough
The supply of new homes is growing in the UK, but after years of not keeping up with the need for new homes the growing supply is far less than the growth in demand.
In 2015 the government set a target of having 1 million new homes built by 2020, but the Federation of Master Builders estimated that at least 250,000 new homes each year would be needed. So the government target for new homes is below what experts believe is actually required. And in fact, the government has failed to meet its own target for new homes.
A big part of the problem in the UK is that we have a high population density to start with and a lot of the land that would be used to build property in other countries is protected by green belt status.
The failure of housing supply to keep up with demand is one of the key factors which keeps pushing up the price of property in the UK.
- Easy Buy to Let Finance
The fact that you can have banks provide you finance to buy investment properties is a massive advantage.
Not only can you get mortgages on investment properties, but the investment finance market is very well established in the UK. There are lots of different lenders in the market with many and different products. These include standard buy-to-let products, HMO products, short term bridging, development loans and commercial property mortgages.
The lenders are also able to deal with a wide range of personal circumstances, so not all lenders require you to be in employment or have 3 years of self-employed accounts. Many will lend to you on the strength of the investment itself.
Being able to buy properties with a deposit only, rather than the whole purchase price, means that you can grow your portfolio much faster.
- Stable Legal Structures
A vital consideration for any investment is how safe your investment will be.
The UK has a very stable, fair and well protected system of legal rights. Your rights as a property owner are clearly defined, your ownership is clearly established during the purchase process and should there be any disputes there are well defined procedures to follow.
- Political Stability
Leading on from the stability of the legal framework in the UK, the political framework of the UK is very stable.
The UK has been free of civil war for hundreds of years, its legal and political system has evolved from documents developed hundreds of years ago – the Magna Carta in 1215 and the Bill of Rights in 1689 (which is still in effect).
Of course, there have been significant changes over this time, but importantly the system is able to deal with change in an evolutionary rather than a revolutionary way. This overall political stability makes the UK a very sound place to invest in.
- Long Term Growth in Property Prices
Every market has its ups and downs, but the long-term trend of property prices in the UK has been upwards, doubling around every 10 years. This trend has been quite consistent since the late 1900’s if not further back.
This means that you can make money by just sitting on property in the long run. If you combine this with mortgaging properties you can make ridiculously high returns on the money you invest.
Lots of reasons in my opinion to invest in UK property !
I hope that this has been helpful and interesting. If you have any questions on this or on ways that we can help you on your investment journey then please do contact me on firstname.lastname@example.org. You can check out our website at www.goldsmith-property.co.uk and our Facebook page for updates on different projects, search for Goldsmith Property Bristol on Facebook.