Category Archives: Tips

Buying A New-Build Property Could Pay in the Long Run

Posted on by Aspen Woolf

A study by the Home Builders Federation (HBF) has found the cost of upgrading an older property to the same standard of a new-build could be as much as £50,000! Therefore, on top of the initial property purchase, the overall cost may exceed what you’d pay for a new-build in itself.

With this in mind, investors should consider purchasing a new-build outright, especially if the location is desirable and there’s potential for long term capital gains.

Renovation Costs

Renovating an old property for investment can cost thousands of pounds.

Image credit: Nolan Issac via Unsplash

The Home Builders Federation survey looked at refurbishment work that is often required when people move into a new home. Estimates of these potential costs are listed below, although some prices may of course differ depending on the size of the property:

  • Fitted kitchen – £7,900
  • House re-wiring – £8,850
  • New bathroom – £3,800
  • New central heating system – £6,185
  • Roofing – £4,000
  • Doors and windows – £4,900
  • Guttering and insulation – £1,000
  • Utility appliances and electrical equipment – £1,000

If looking to refurbish, one should really take these potential costs into consideration. If they begin to add up significantly, then it’ll make more financial sense to invest in a new-build. Add to this the energy savings you’re also likely to make. Plus the added bonus of having a new-build warranty, which is usually set at 10 years.

Energy Savings

A new-build property will have the latest in energy efficiency and standards.

Image credit: Matthew Hamilton via Unsplash

Buyers are often drawn to new-build homes because of their increased energy efficiency. Compared with Victorian-style properties, they could be up to 65% more effective in preserving heat due to fitted airtight doors, insulated roofs and double-glazing.

The HBF study shows that 94% of homes built in 2016/2017 can boast an A-C energy efficiency rating –  this is just a quarter in second-hand properties. New-build homeowners will therefore save hundreds, and sometimes thousands, of pounds in utility bills alone each year.

New-Build Advantages

New-build properties offer investors a low cost, modern opportunity.

Image credit: Echo Grid via Unsplash

Some older buildings in the UK may simply not meet the standards required for 21st century living. Remodelling them completely may take up too much time and money for it to be considered financially viable. Usually something done out of a labour of love rather than investment purposes.

On the other hand, new-builds are always constructed to modern standards and have to pass multiple council planning, build, and health and safety requirements. They’ll be equipped with energy-efficient boilers and vacuum insulation panels, not just saving you money on bills, but also meaning replacements won’t be needed any time soon.

You’re also likely to experience long-term capital appreciation as new-builds are often hand picked in areas with high social and economic growth potential.Some buyers may not be aware that new-builds are zero rated from VAT. As the buyer, these savings will be passed onto you, helping reduce your overall costs. As briefly mentioned before, fittings in a new property are covered by a 10-year NHBC warranty protection on structural defects. So if anything does go wrong, you won’t have to worry about footing the bill.

Deciding between a large-scale renovation or a new-build property depends on the property itself, as well as your personal circumstances and goals. However, as refurbishment can cost as much as £50,000 as noted in the Home Builders Federation study, it would make more financial sense to plump for a new-build instead.

 

If you’re looking for ideas on where you should buy your investment property, take a look at The UK’s Top Buy-To-Let Hotspots in 2017 Revealed!

For more advice and information on where you can invest in property, get in touch for a chat.

Forget London – Commuter Towns are the Hottest Places for Property Investment!

Posted on by Aspen Woolf UK

London has been a global beacon for finance and investment for decades, growing from strength to strength. However, with the eye-watering increase in property prices in recent years within the capital, many workers find themselves unable to afford to live comfortably in the city. The potential gains for buy-to-let investors have also been significantly hampered, with average rental yields for London homes being as low as 3.2% in February 2017.

For several years now, young professionals have been moving out of London and into towns within an easy commuting distance in order to find a home to buy or rent at a price that doesn’t break the bank. And this is exactly where savvy investors should be looking.

Whilst the prestige of owning a London property might be appealing, when you compare the ROI to investing in commuter towns, there’s no question as to where you’ll get more for you money. After all, isn’t that the whole point of investing in the first place?

Take Luton for example, where you are just 23 minutes from London by train. But for that small distance of just 30 miles, buyers can save an impressive 65% on property prices! While the average price of property in London is currently £685,877, in Luton it is just £239,618, a massive £446,259 less! And with a 10.4% increase in average rents in Luton since 2014 (the highest in the UK, by the way), investors can achieve rental yields of 6% (double that of London) making Luton one of the most profitable places in the UK to be a landlord.

 

So what should you look for when considering investing in a key commuter town?

 

Travel Time

Travel Time

Obviously the time it takes to travel into the capital (usually by train) is a key factor in a commuter town’s appeal – hence the epithet ‘commuter town’. Ideally you would want to keep this under 45 minutes.

 

rental yields increasing

House Prices and Rental Yields

Of course the difference in property prices and relative rental yields you could achieve compared to the capital will always be top of your list of things to take into account as an investor. Make sure the cost of the property is in line with the yield you want to achieve. Just because a property is expensive doesn’t guarantee it will yield higher rents.

 

UK Train Ticket

Commuter Travel Costs

Any savings that residents make on the cost of buying or renting a home in a commuter town is also impacted by the cost of their commute into London. Every Londoner is very aware of this. With some similar length routes costing more than others, it’s worth checking the prices for season tickets from the town you’re exploring. This is key in determining the commuter appeal.

 

Local amenities

Local Amenities

Whilst those living in commuter town will still look to the city for some of their more ostentatious entertainment (with it being easy to travel to), you still want to be comfortable in the town you’re living in, so easy access to shops, good schools, bars and restaurants, etc are an important consideration. Pay attention to development in the area as well as this often brings in new amenities. By noticing small improvements in the town and investing earlier, you could gain even more in capital growth just a year or two down the line.

 

London Cross Rail Logo

Upcoming Investment in the Area

This brings us to our last major point, which we just touched on. Any large-scale investment projects, such as town centre regeneration, in areas within the commuter belt are worth taking note of – and for towns that may previously have been thought of as a little too far out, transport infrastructure developments like Crossrail and can provide a huge boost. This is very fundamental when looking for new commuter towns to invest in. When the government is investing in the local transport system or even upgrading the train stations, that is usually followed by increases in house prices as well as more residents moving in due to the improved networks.

These factors all combine to provide the perfect enticement to potential residents and investors. With all this knowledge fresh in mind, now is a great time to look at potential property investments in commuter towns.

 

If you want to know what other factors to consider for your property investment then take a look at What Size Property Should You Buy for the Best Investment, or check out our Six Surprising Things That Affect Property Prices.

And if you’re already looking to start your investment journey, then take a look at the property we currently have available.

Landlords! Here’s What You Need to Know About Right to Rent

Posted on by Aspen Woolf

One of your responsibilities as a private landlord is to check if prospective tenants have the ‘right to rent’ in the UK. It stems from the Immigration Act of 2014, a measure designed to make it difficult for illegal migrants to remain here undetected.

The 2015 Immigration Bill builds on this, granting increased eviction powers for authorities and criminal penalties for non-compliance.

Investing in property comes with more responsibilities than you may think.

As a landlord, these ‘right to rent’ responsibilities can only add extra weight to an already stressful workload. In addition, some tenants make it difficult to obtain their personal information or simply produce fake documents.

This is why we recommend making your investment through a professional lettings agent such as Aspen Woolf. We’ll take care of these requirements on your behalf, using a team of legal specialists to verify documents and even take liability if financial penalties do arise.

By doing so, this will help secure your investment and maximise its potential earnings.

 

Official Legislation

Landlords must check that their tenants can legally live in the UK.

Details of the ruling can be found under Section 22 of the Immigration Act 2014, which declares that landlords: “must not authorise an adult to occupy premises under a residential tenancy agreement if the adult is disqualified as a result of their immigration status.”

To comply with these requirements, you must view original immigration documents, make copies and keep them for 12 months after the tenancy expires. If these documents are held by the Home Office, a landlord’s checking service can be accessed online here.

If you’ve made these checks and discover your current tenant is living in the UK illegally, you must report this as soon as possible. Once this has been done, the process falls out of your hands and you’re under no obligation to force an eviction.

However, if you don’t make sufficient effort to report a tenant without the right to rent, you may face a civil penalty up to £3,000.

Although there are various stipulations to adhere to, the legislation does not apply to the under 18s or those not renting the property as their main home. If you’re unsure of anything, additional details can be found on the official government website here.

 

Managed Lets

An agency can handle these checks and legislation for you.

One useful aspect of the legislation is that an external agency can carry out these ‘right to rent’ checks on your behalf.

Aspen Woolf can recommend fully licensed companies to do so and can draw up a written agreement which passes responsibility onto them. We can also recommend the correct due diligence platform that will perform detailed background checks and credit reports on all potential tenants before they move in.

This is of great help to landlords who don’t always appreciate the extra hassle that comes with some independent buy-to-let investments. If you need any further information regarding our ‘right to rent’ compliance, please feel free to get in touch today.

As a landlord, you may be interested in whether Build-to-Rent is the future of property investment.

What’s the Right Age to Start your Property Portfolio?

Posted on by Aspen Woolf

Although age provides no barrier for a property investment, it’s best to make your move as early as possible. This is simply because the longer you hold real estate for, the more likely long-term gains will be made.

This shouldn’t necessarily deter older investors, however. Some managed lets within the buy-to-let sector provide guaranteed rental yields over 3-5 years’ time – a perfect way to strengthen your retirement funds with no hassle and very small risk involved.

Either way, the basis of a successful property purchase remains the same; location and demand. Your age shouldn’t be too much of a decisive factor in the investment, especially if you have an experienced estate agent on side who’ll oversee the process.

 

Younger Investors

Many experts recommend getting on the property ladder as early as possible.

Many property experts recommend getting on the ladder as soon as financially possible. The UK property market tends to hold up, even after significant events such as Brexit, so the chance of you losing money in the long-run is relatively small.

According to PwC, one of the world’s leading professional services network, house prices will increase by an average of 6% by 2019. This will placate to around 5% growth by 2025, fuelled by persistent supply shortages. Property looks a safe bet in the UK.

With the typical length of a mortgage being 25 years, this is more reason for younger investors to swoop early. Once paid off, you’ll have more time later in life to relax without the constant strain of bank repayments.

As your intention is to start a portfolio, there’s increased opportunity to acquire further properties down the line. Doing so means you’ll have the equity to obtain additional buy-to-let mortgages, as well as providing income if one property sits vacant between tenants.

Of course, the property game is one with a series of ups and downs, and you may not get everything right straight away. However, starting early means you’ll gain experience as time goes by, recognising when to invest and when to sell throughout positive and negative property cycles.

 

Older Investors

Older investors are more likely to have the funding to start their property portfolio.

As noted, there’s nothing to stop middle or pension-age investors starting a property portfolio as well, although obtaining a buy-to-let mortgage will be trickier. Lenders impose stricter regulations for older borrowers, with a typical age limit of 75.

Older buyers are more likely to have expendable funds at their disposal, negating the need for a mortgage in any case. Most sellers prefer a cash payment route, providing you an extended pool of options and a far quicker transaction time to boot.

For those in retirement, playing the property market is an exciting venture and can provide a fantastic boost to your quality of life. As well as initial short-term rental income, you’ll also have something concrete to leave behind for your loved ones.

In conclusion, age shouldn’t be a factor if you’re looking to begin a property portfolio. However, taking the plunge as early as financially viable is recommended as it provides better access to a buy-to-let mortgage, more chance to recover from a downturn, and increased opportunity to grow your portfolio over time.

Older investors shouldn’t be put off however, especially if they’re cash rich. As many investment opportunities for managed lets are cash-only, this provides you access to properties that guarantee short-term rental yields as high as 10% in some areas.

Still need convincing that property is a great place to invest? Take a look at Why Property is Still the Most Lucrative Investment in 2017.
If you’re ready to invest in property, take a look at the opportunities we currently have on offer.

Is it Worth Furnishing Your Residential Rental Properties?

Posted on by Aspen Woolf

As a landlord, furnishing your rental property or leaving it empty is entirely up to you. It all depends on your budget, how much rental income is desired and the kind of tenant you’re looking to attract.

There’s also the middle ground to consider. This is where you provide basic furnishings such as a bed, sofa, oven and washing machine, but require the tenant to supplement this with their own belongings.

 

What Counts as a Furnished Property?

Providing a dining table and chairs might be expected in furnished rental properties.

There’s no legal definition for a furnished property in the UK, but tenants will expect some or all of the following items to be provided:

  • Bedroom: bed, chest of drawers, wardrobe
  • Living Room: sofa, armchairs, television
  • Dining Area: table, chairs
  • Kitchen: fridge, freezer, oven, microwave
  • Utility appliances: washing machine, dryer, dishwasher

Of course, it’s also advised to spruce up the property as best you can. Ensure flooring is solid with carpets or wood installed to the proper standards. Curtains and blinds are another expected feature, as well as attractive paint jobs or wallpaper. Another recommendation is to provide access to a Wi-Fi internet connection.

As a side note, consider your legal responsibilities as a landlord when furnishing the property – these can be found on the government website here. Landlord contents insurance is also highly recommended.

 

Furnished Rental Properties

It's up to you as the landlord to decide how far to go if furnishing your rental property but many tenants may expect there to be a bed.

Kitting out the property is likely to attract more enquiries. Modern renters don’t tend to have their own furniture so will be actively searching out furnished homes, especially in the case of students or young professionals.

If you’re worried about the added expense, consider it as an investment. Tenants may come and go, but your furnishings will always be there. In addition, you’ll now be able to charge higher rents to offset these initial costs.

Inexperienced landlords may not be aware of the tax benefits of furnishing your property. Although the ‘wear and tear’ tax has been reformed, the new relief system still enables residential landlords to deduct costs on replacing furnishings, appliances and kitchenware.

 

Unfurnished Rental Properties

If you're aiming your rental property at families who may already have their own furniture, you may choose to leave your property unfurnished.

Unfurnished homes may attract less interest overall, but much depends on the expected tenants. For example, families – whose reliance on the rental sector has rocketed over the past decade – are likely to possess their own furniture anyway. Rents will be generally cheaper also, meaning more enquiries from lower earners are likely to come in. Families, on the upside, tend to stay in the same property for much longer. Ensuring your rental income remains stable for the foreseeable future.

Landlord’s want the least hassle possible and unfurnished properties offer that. There’s no removal fees to contend with (now or in the future), less concern over general deterioration and no insurance requirements.

However, remember that some basic amenities will still be expected by potential tenants. These will include sufficient heating, electric and gas supply, along with flooring, curtains and perhaps a washing machine, oven, refrigerator, etc. You can add to this ‘inventory’ as time goes by as your budget increases.

Whichever option you decide upon is entirely up to you and much depends on your finances and rent expectations. However, investing in a managed let via an estate agents provides the best of both worlds. You’ll receive a fully furnished property with all the potential hassle taken care of.

Whether you’re a first time property investor or already have a portfolio, you might be interested in whether Build-to-Rent is the future.
You can find out about managed let opportunities available throughout the UK over on our Investments page.

How to Protect Your Property Portfolio in 2017

Posted on by Aspen Woolf

A successful property portfolio requires ongoing investment and long-term maintenance to sustain performance. Without protective measures in place, its market value and rental returns will be threatened.

Be it for just one or a string of properties, there are certain ways to ensure your portfolio sustains long-term capital growth and provides healthy yields along the way. Here are some ways to protect your investment through 2017.

Landlord Insurance

Landlord and Income Protection insurance are both important to investors.

Landlord insurance is specifically manufactured to suit the buy-to-let market. However, specialised cover is needed depending on the type of property and tenants in question.

Basic landlord insurance typically includes the same type of protection as your usual house insurance, covering against fire and flooding, for example. However, additional extras will be required to safeguard against such actions as unpaid rent, malicious damage, loss of income and legal disputes.

For furnished properties, contents insurance should be taken out to cover such items as kitchen appliances, furniture, utilities and carpets, etc.

Income Protection Insurance

Many investors rely on personal income to maintain mortgage payments, especially if they’re self-employed. However, should you lose work through no fault of your own – due to illness, for example – then income protection provides a regular monthly salary for a specified period in replacement of the expected wage.

Know your Interest Rates

Do your research and keep an eye on interest rates as a landlord.

For buy-to-let mortgages, you have the option to lock in your interest rate or use a variable rate over a set period of time. Whilst the fixed rate won’t budge over the repayment period, the variable rate tends to follow the Bank of England’s base rate and so can be changed at any time. Knowing which option to choose depends on the current market conditions.

For 2017, it appears there is pressure from Governor of the Bank of England Mark Carney to raise interest rates, although many lenders haven’t succumbed as yet. At time of writing, there are still ultra-low rates available and many people are taking long-term, 10 year fixed deals due to current uncertainty post-Brexit.

Tax Planning

Changes are coming to taxes in April 2017 so landlords should research their options and plan accordingly.

Being phased in from April 2017, tax relief on residential properties will be restricted to the basic rate of income tax. This will push higher rate payers into the 20% relief bracket. To cope with the additional pressures, some buy-to-let landlords have moved their portfolio into limited companies or transferred properties to family members in a lower tax bracket.

Tax repercussions are a complex matter so it’s recommended to use the know-how of a professional accountants or letting agents to protect your property portfolio from tax inefficiency.

Further Advice

Before settling on a purchase, research the expected 2017 property hotspot areas such as Manchester, Edinburgh and Liverpool, which are backed up with vast student numbers and young professionals who move into the rental market.

Other measures are to acquire high-quality home security equipment, such as CCTV cameras and intruder alarms, to deter crime and satisfy insurance requirements. For additional protection, consider how your Will deals with your portfolio.

 

If you’re looking to expand your property portfolio, you may be interested in the UK’s Top 10 Best and Worst Areas to Invest in 2017.

What Should Every Landlord Know About Tenant Referencing?

Posted on by Aspen Woolf

For landlords in the UK, the integrity and reliability of your tenants will determine the success of your property portfolio. A staggering £5 billion is lost in unpaid rent and property damage every year, leaving landlords out of pocket and with a difficult fight on their hands to claim compensation.

To reduce this likelihood, it pays to thoroughly scrutinise potential tenants before they move into your property. Although plenty of tenant referencing agencies have emerged in recent years, not all of them are as effective as they should be – the statistics show that landlords are still being seriously affected by arrears and repair costs.

Tenant referencing companies should provide the most comprehensive background checks on your behalf. Before utilising their services, landlords should ensure the following is  provided.

Identification Checks

A good place to start is with simple I.D verification. If dealing with foreign tenants, it’s actually required by law to check their residential status under the 2014 Immigration Act. If you are housing illegal immigrants, a fine of up to £3,000 can be imposed for each tenant.

 

Get more than credit checks when getting a new tenant.

Credit Checks

Credit checks alone aren’t sufficient in testing the competence of a tenant. Despite being advertised as such by some referencing agencies, they’ll only trigger a warning if the individual has a county court judgement or other adverse payment defaults. Most tenants won’t be included in this category so, although a necessary part of the process, they aren’t fully reliable.

Supporting Documentation

During the application process, prospective tenants must have all the required supporting documents to verify their submission. Ensure any paperwork is an original, authentic copy, hasn’t been tampered with and contains genuine photo I.D certification. Look for any further discrepancies within the documents, such as an inconsistent bank statement.

 

Make sure you're comfortable that your new tenant can afford the rent.

Income Reference

With the proper documentation at your disposal, you can find out the affordability prospects of the tenant. Verify their job title, employment status, salary and any other income before leasing out your property. So many landlords sacrifice this aspect of their referencing in favour of the immediate earnings. This will come back to haunt you if the tenant can’t keep up their rent in the long-term.

Previous Landlord Testimonial

A fantastic way to supplement the aforementioned checks is to simply enquire with the tenant’s previous landlord, if applicable. However, you should go further than the obvious “did they pay up on time” line of questioning. Ask of their general attitude and care towards the property, as well as their reliability and responsiveness to enquiries.

 

Doing a number of checks into your new tenants will be a good investment in the long term.

A bad tenant is simply a drain on your investment and is likely to lead to an infuriating, costly eviction process further down the line. As a landlord, it’s your responsibility to assess tenants as strenuously as possible, using a reputable referencing agency for full clarity.

During the interview stage, don’t be scared to ask in detail about the individual’s history, expected income and supporting documentation. Try and strike up a positive rapport with them, showing how you’re a reasonable landlord and will be on hand if any problems arise. This way, they’ll be less inclined to betray your good nature and disregard your property.

Now is a great time to get into the rental market or build your property portfolio. If you’re interested in learning more, check out our article on how property rentals are currently exceeding property sales.

Read This Before Setting Up a Limited Company for Your Property Portfolio

Posted on by Aspen Woolf

Rearranging your property portfolio into a limited company is a decision many investors consider, primarily for tax reasons.

However, because such a decision depends on your personal circumstances and as new property tax laws are being implemented in 2017, it’s recommended you seek the advice of a professional accountant before making such a move.

Tax Changes

From April 2017, the government will introduce changes to help diminish the dominance of landlords in the UK buy-to-let sector.

The current system allows multiple property owners to claim tax relief on all mortgage interest payments when working out their profits. However, under the changes proposed by former Chancellor George Osborne, mortgage interest tax relief will now be cut back from a possible 45% down to 20% by 2020.

Tax changes are coming that will affect property investors who are not part of a limited company.

Image credit: RachelH_ via Flickr

Those affected most by these new regulations will be higher-rate taxpayers whose mortgage interest is at least 75% of rental income. In addition, basic-rate taxpayers could now find themselves pushed into a higher tax band because of the new changes.

However, one saving grace for landlords is that limited companies are exempt from the incoming mortgage amendments. That’s why many property owners are restructuring their status to become a corporation.

Setting up a Limited Company

Despite the initial attraction to become a limited company, there are various pitfalls to avoid before doing so. They’re only beneficial for certain types of investors, whilst long-term ramifications and the availability of mortgage finance could also affect the decision.

To begin with, transferring the status of a property from private ownership to a limited company is classified as a sale – from April 2019, this will result in a capital gains tax bill on any profits, as well as a stamp duty charge of 3% for properties worth over £125,000.

In addition, obtaining a future mortgage could be trickier as some lenders restrict their options to companies as opposed to individuals. However, setting up a special purpose company that only contains a property portfolio is looked upon much more favourably.

There are pros and cons to setting up a limited company.

Image credit: Woodleywonderworks via Flickr

Advantages of Becoming a Limited Company

As well as the increased tax relief for becoming a limited company, there’s also no income tax to pay on profit as your portfolio grows. Despite having to now dish out corporation tax – which itself will decrease to 18% by 2020 – this is still substantially lower than the higher income tax rate of 40%.

Another positive aspect to consider is that funds can still be withdrawn from the company and used as personal finance under a Director’s Loan.

Professional Advice

In many cases, setting up a limited company will result in some fantastic tax advantages for your property portfolio but can also bring its own drawbacks. For example, there’s the hassle of preparing new bank accounts, registering with Companies House and the HMRC, along with further tax calculations to work out.

It's best to seek legal advice before setting up your company.

Image credit: thetaxhaven via Flickr

Because of this, it is often advisable to employ legal advice so you become as tax efficient as possible and negate costly mistakes.

If you’re worrying about your property investments, take a look at our article on why there’s no prospect of a housing market crash.

Property Investors to Benefit from Tax Relief

Posted on by Aspen Woolf

With all of the hubbub surrounding the changes to Capital Gains Tax and how that is likely to affect the nation’s numerous landlords, little has been made about another part of the Chancellor’s budget speech which he delivered on Wednesday 16 March 2016. George Osborne announced an extension to the Entrepreneurs’ Relief, something that will see long-term investors in unlisted companies able to enter the fray.

It is hoped that the changes will make it easier for businesses to attract investment into their projects, and the property sector is one of the main areas that the Chancellor hopes will benefit. Property startups with adequate backing could help ease the current housing crisis that is blighting much of the UK, especially the capital.

What are the changes?

The new rules for Entrepreneurs’ Relief mean that, for the first time, external investors can now benefit from the 10 per cent tax rate. This is regardless of the size of the holding that they have and it is also applicable to unlisted trading companies, meaning that the breadth of the relief has been extended considerably.

These external investors will be allowed to enjoy the 10 per cent tax rate on all profits made up to the £10 million mark providing they sell their holdings after being involved with the company for a minimum of three years. The changes are set to come into effect at the start of the new financial year on 6 April 2016.

Under the current rules, external investors were unable to take advantage of the relief unless they were at least five per cent shareholders in the company in question and made directors. Until the changes were announced in the most recent budget, external investors would have been required to pay the full rate of Capital Gains Tax if they could not make their investment through the Enterprise Investment Scheme.

This was limited to companies who dealt in what was considered to be a qualifying trade by the EIS, and only those who meet the criteria could attract money from the scheme. One such industry that did not qualify under the previous rules was property development. However, now it is hoped that the changes will encourage those who develop and sell both residential and commercial property to seek outside investment, thus creating more housing to help meet the seemingly insatiable demand.

Changes to taxes are coming

Image credit: andreypopov via 123RF

More funds mean more housing

Greater funding will undoubtedly lead to more affordable housing across the capital and beyond. Smaller local property developers are likely to be amongst those who take full advantage of the changes, and it is this breed of developer that will be able to make a dent in the housing shortage should they get the investment that they need.

Many analysts are already hailing this shift in policy as good news for the UK’s housing sector, as well as bringing a welcome boost to the Alternative Investments Market (AIM). As this particular market is classified as ‘unlisted’ it will be eligible for investment itself, something that will be seen as a gift at a time when the junior stock market is suffering due to the volatility seen over recent months.

It's time to get building

Image credit: madmaxer via 123RF

All in all, this is a positive move from the Chancellor. All that remains now is for developers to pick up the reins and start building.

If you enjoyed this post, you might also be interested in The Need for Accessible Student Accommodation Is At An All Time High and Generation Rent – Why Are So Many Millennials Choosing To Rent?

The 11 Best Places In Europe To Invest In Property

Posted on by Aspen Woolf

With more and more people scanning the UK property market for bargain basement prices, finding a great deal is becoming increasingly difficult. While there are still areas of Britain showing impressive growth and attractive yields, things are not what they used to be for investors.

With that in mind, many of those who wish to expand their property portfolios are now looking further afield for their next purchase. Naturally, for Brits, the first port of call is Europe. Here we take a look at the top 10 European cities for people who want to put their money into property. Let’s get started:

1) Brussels, Belgium

brussels belgium

Photo Credit: Nathan Guy via Flickr

As Belgium’s capital city and home to the headquarters of the European Union, Brussels is somewhere that deserves more than just a cursory glance. The city has high rental demand, but be aware of the high transaction prices and the taxes that you will have to pay here.

2) Riga, Latvia

Riga, and Latvia in general, has a great pro-landlord rental market and the red tape is not as overwhelming as it can be in other parts of Europe. Transaction costs are low and GDP growth is high. Yields may not be as great as elsewhere, however.

3) Berlin, Germany

Berlin Germany

Photo Credit: amira_a via Flickr

With the largest European economy behind it, Berlin is certainly a strong player in the European property market. The cost of transactions here are reasonable and the yields are very good. The rental market, however, is more tenant-friendly than pro-landlord.

4) Istanbul, Turkey

Istanbul is currently experiencing economic growth on scale that it hasn’t seen before. Despite the property market being decidedly pro-tenant here, the high yields and reasonable costs make Istanbul a place worthy of your attention.

5) Amsterdam, Netherlands

Amsterdam Netherlands

Photo Credit: faungg’s photos via Flickr

Amsterdam is another tenant-friendly city, but it certainly shouldn’t be dismissed because of it. Amsterdam has an extremely strong economy and the prices here are modest considering it is such a major city. Reasonable income tax levels are a plus here too.

6) Hungary, Budapest

Budapest has some minor ownership restrictions in place and the income taxes on rentals are a little on the high side but there are still areas worth taking a look at here. Yields are generally good and the law is more on the side of the landlord than the tenant. Transaction costs are sensible too.

7) Talinn, Estonia

Talinn Estonia

Photo Credit: Jiri Brozovsky via Flickr

Estonia is enjoying strong economic growth of late and the property market is beginning to reflect this. However, transaction costs remain remarkably low here while the yields are decent, although by no means high. Income Tax, however, is expensive here.

8) Bratislava, Slovakia

Rental income tax rates here are attractive to prospective investors as are the transaction costs. There are, however, some issues over property rights here and the rental yields are at the lower end of the scale.

9) Ljubljana, Slovenia

Ljubljana Slovenia

Photo Credit: jaime.silva via Flickr

The property market here is very landlord-friendly and the low transaction costs can prove enticing. The economy here is good, but buyers should be aware of the high taxation policies in place for rentals before committing to a purchase.

10) Vienna, Austria

As an extremely well established city, investing in Vienna comes with a certain degree of comfort. The stable political system here means that surprises are unlikely in the foreseeable future and the transaction costs are relatively cheap considering the city’s popularity. The rental market, however, is geared largely towards the tenant here.

11) Helsinki, Finland

Finland’s economic outlook is strong and the housing market here is buoyant. Yields are by no means high here, but the transaction costs are very reasonable indeed. The balance between landlord and tenant is fairly equal here too, however, the high income tax on rentals may put some investors off.

 

No matter where you choose to invest it is always important to do your own research and find out as much as you can about the property market in each city. We have taken the main points from our own research and experience and wrapped them up into a cosy little nutshell for you. If you have your personal experiences to add about any of these cities, let us know! We’re always happy to hear!

Feature image credit: Charles Clegg via Flickr.

If you enjoyed this blog post then perhaps you would like to read “What The Future Holds For the Property Market if a Brexit Comes To Pass“?