Are the higher prices for new build properties worth it?

Are the higher prices for new build properties worth it?

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Many prospective investors and clients of ours often have hesitations towards off-plan and new build properties for the simple reason that they’re often more expensive than second hand houses or apartments. While this may be the case for many, sometimes people fail to take into consideration the numerous benefits that new build property investments provide.

In today’s article, I will be outlining some of the reasons why new build property can be worth paying a premium for and some of the benefits they provide over second-hand property.

Repair and maintenance

As I’ve mentioned, off-plan property can often come at a higher price than second hand deals. One of the reasons why this is the case is the higher quality of the build with newly constructed property. The facilities and equipment on-site will be a lot less liable to break or malfunction which will naturally lead to fewer maintenance issues with your property.

Second hand property on the other hand can be notorious for the constant upkeep that is costly and time-consuming for many property investors and Buy to Let landlords. The money that you sink into keeping your property fit for tenants can ultimately cancel out the reduced rate you paid for it in the first place. You may end up paying just as much or possibly more in the long-run for a second-hand property instead of a new build, so it may be more prudent to buy off-plan to avoid potential repairs and maintenance issues in the future.

Longer rates of tenancy

A happy tenant is a good tenant, and they will be happier with quality on-site facilities that cater to their every need. This is what new build properties offer, and this will keep your tenant happy with their living space and therefore more likely to stay on living there for several years.

This will keep your void periods to a minimum and ensure you will be earning a regular income over the long-term without needed to constantly repopulate your property.

Easier for first time buyers

For many first-time buyers a new build home is the only way they can get onto the property ladder. That’s because schemes such as Help-to-Buy and Shared Ownership are only available on the purchase of a new home.

A wider scope of financing will also be available on a new build property is also readily available subject to status. Up to 75% Loan to Value mortgages are commonplace, and with the excellent facilities that new builds offer, many first time investors see off-plan property as an excellent way of getting onto the property ladder via a deposit rather than shelling all of their money into a second hand property in a worse condition than a new build.

Wide range of warranties

Nearly every new build property will come with an NHBC warranty in place amongst others that will cover your property in the event that anything goes wrong with facilities breaking on-site.

Superior fittings

Just like buying a sparkling clean, brand new car, there is an attraction to buying a new house that has never been lived in by anybody else.  Furthermore, if you buy a new build off-plan, you will discover that many developers have a variety of internal fitting packages to choose from. You may be able to select floor tiling, carpets, kitchens and even white goods from a number of options that the developer can offer at competitive rates.

However, the range will not be unlimited, and you may find that owners of an older property have carried out high quality improvements to an older property that you absolutely love and would not even have contemplated.

Higher level of security

New homes come with higher levels of security. The majority of builders either pre-wire for a burglar alarm system or fit one as standard. These kinds of measures can help to bring down the cost of your buildings and contents insurance.

This will give your tenant peace of mind moving forward and keep them happy, which I’ve already alluded to be an especially important in keeping a sustainable rental income for several years.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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Buying off plan property- your solicitor’s role in everything

Buying off plan property- your solicitor’s role in everything

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Many people are deterred from buying off-plan property because they worry it will be a long arduous task that they don’t have the time for. It certainly can be depending on what you buy and who you invest with, but by working with the right people who take most of the work out of your hands, it can be relatively easier.

In this article, I will outline what a solicitor’s role is when you purchase an off-plan Buy to Let property.

The start of the process

Once you have decided to proceed with an investment, you will pay a reservation fee to put your unit on hold with the developers. This is when your solicitor will be assigned to you either via the developer or by using your own. It’s usually more efficient to use the developer’s nominated solicitor simply because they have progressed several sales on the scheme in question, whereas your own solicitor won’t be as familiar with the deal.

Once you are in touch with your solicitor post reservation, you will usually have around 1 month before you put pen to paper and exchange contracts. The following steps will take place over the course of the upcoming weeks prior to this happening:

Step One

Your solicitor will first send you a Client Care Letter, which confirms their terms of business, costs and the like. Once you sign this and send it back to your solicitor, they are then obligated to act on your behalf throughout the sales process. The solicitor will request all the necessary paperwork from the developer’s solicitor. This includes all the legal documents and the contract of sale.

Step Two

The solicitor reviews the documents and contract and will then ask for the search fee once they are satisfied everything is in order. Once this is paid, they will arrange for the search to be done.

If there are queries that arise from the review of the legal documents, the solicitor will liaise between you and the developer via its solicitor. Only when any issues have been resolved will the solicitor continue. This is where it pays to have a good solicitor and supports the theory that it’s best to go with the developer’s nominated legal team. They will know exactly what should be in the contracts because they will have dealt with many sales progressions on the chosen deal.

Step Three

During the third week, the solicitor will ensure that any and all queries have been resolved and that the search is satisfactory. With all this in place, you’ll receive a copy of the contract to review. You’ll need to sign this, and you’ll also receive a request for the deposit.

Step Four

This is when you’ll need to send the signed contract back to the solicitor. You’ll need to arrange for the deposit money to be paid into the solicitor’s escrow account.

Once they have received your signed contract and deposit, the solicitor will arrange for the exchange of contracts and payment of the deposit to the developer.

Step Five

Once you have actually exchanged, the process doesn’t stop there. Through the next few months, your solicitor will be in touch with you at regular intervals. You’ll need them to handle:

  • Transfer deeds
  • Mortgage deeds
  • Certificate of title
  • Searches on land registry and land charges
  • Stamp Duty Land Tax.

This may all seem like a relatively simple process, but each stage can feel time consuming if your solicitor isn’t on the ball or generally isn’t familiar with the deal itself. They need to understand the complexities of buying property off-plan because of the tight deadlines involved. Your role in all of this is to provide what the solicitor needs when they need it to make the process a smooth one.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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Best places in the UK to invest for capital growth purposes

Best places in the UK to invest for capital growth purposes

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One of the primary objectives for any property investor is to secure capital growth on their bought property. In today’s article, I will outline some of the best areas, regions and locations in the UK that are ideally placed to experience good levels of capital growth in the long-term.

Manchester

Manchester regularly tops the charts for the best places to invest in the United Kingdom, and when you look at its fundamentals, it is not hard to see why. A quarter of Manchester’s population are in their twenties, the prime market for rental property and subsequent capital uplift in property prices once they have reached a point in their career where they can buy. Its strong employment market also adds to its appeal as people follow jobs. Around 80 of the FTSE100 companies have some sort of presence in Manchester, and with wages around 30% lower and living costs around 70% less, it is unsurprising why young professionals may pick somewhere like Manchester over London.

Residential price growth is predicted to be strong, with property specialist JLL predicting a 4.2% rise in prices, compared to a 2.4% rise elsewhere. Rents are also meant to increase above the national average at around 3.5%, allowing for strong capital uplift and rental yields.

Birmingham

Manchester has long been an investors favourite, and other cities such as Birmingham were left in its wake. Keen to shed its industrial reputation, the 2022 Commonwealth games coming to Birmingham and the construction of HS2, that could be about to change. HS2 will slash journey times to London to under one hour which will make it even more convenient for commuters and those who wish to do business in both Birmingham and London. With average house prices in Birmingham sitting at £191,331 compared to £627,818 in London, it is easy to see which city would be preferable for people once the transport links have been improved.

In fact, many companies are starting to look towards Birmingham. Large corporations such as Deutsche Bank, HSBC and PwC have relocated their headquarters to Birmingham and an improving standard of living has increased the city’s appeal to young professionals. The booming jobs market will only attract more young professionals to the city, who will also need a place to call home.

LendInvest included Birmingham on its top 10 buy-to-let postcodes in its Buy to Let Index Report, placing it one spot above Manchester. Perhaps now it is a city that should be at the forefront of investors’ minds.

Liverpool

Liverpool has undergone massive levels of government led projects and local efforts to improve the infrastructure and facilities of the city. Most notably is the Albert Dock Waterfront scheme in the city centre which is a £5.5 billion scheme set to transform 2.3km worth of land along the docks. Proposals are in place for a luxury cruise liner terminal here as well as a £2.5 million Isle of Man ferry. This will all lead to huge levels of growth to property in this vicinity and many new developments are being constructed to capitalise on this.

As a result of the aforementioned regeneration, Liverpool has experienced huge levels of capital appreciation in recent years which is set to increase even more in the near future. Home.co.uk showed a 20% increase in prices on flats in Liverpool from November 2016 to November 2017, rising from £111,394 to £133,876- (http://www.home.co.uk/guides/house_prices_report.htm?location=liverpool&lastyear=1) JLL are also predicting a 23% increase on house prices in Liverpool over the course of 2017-2021, meaning investors are well placed to take advantage and get a piece of the action before further growth takes place.

These are three of the main cities that Tarquin Jones are focusing on in terms of property sourced- certainly when it comes to capital growth. With London no longer the mecca of capital growth in the UK, many domestic and overseas investors are targeting Manchester, Birmingham and Liverpool as ideal alternatives to fulfil their property investment goals.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details. 

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What to consider before purchasing UK Buy to Let property

What to consider before purchasing UK Buy to Let property

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I understand there is naturally going to be caution before any investor decides to purchase a Buy to Let property, especially amongst first time buyers. In order to address some of the concerns that you as a buyer may possess, today’s article will cover what you should consider before putting your money into any form of property investment.

Consider the markets

Before looking at specific properties, it’s worth knowing what the markets are like as a whole in the UK. See what some of the country’s biggest property agents are saying about the state of the markets i.e. JLL, Knight Frank, Savills etc. They will give expert knowledge on the best cities to invest in the UK and provide up to date property news, so you know how your purchase will be affected.

Researching average property prices, analysing whether they are increasing or decreasing, and reading up on the latest property and political news to ensure no policies are being implemented that could negatively impact profits that can be achieved.

Consider each property sector

There is such a wide variety of property investment avenues and whilst most follow the same set of fundamentals i.e. supply and demand, there are still differences to each of them and need to be judged on their own merits.

Residential property, student units, commercial sites, hotel rooms, care homes, car parking spaces etc.… It’s important to know what each of these achieve and how they stack up against each other. For example, student property is great for securing regular rental income but less so for its capital growth prospects. Traditional residential plots are better for capital growth but are normally more expensive.

It’s up to you to know what’s best for your money but researching each property investment sector will enable you to choose a property that best fits your goals.

Consider the location

You need to know where the prime areas in invest in the UK are. Some are more lucrative than others and you don’t want to tie your money in a location that isn’t growing as much as it should.

The first thing you should know about the area you’re investing in is if there’s a strong demand for property in the area. If this is not the case, then your property will sit empty and you won’t earn regular rental income. A major UK city with great transport links, employment prospects and at least one university will have a strong demand for property versus a supply shortage. This pushes prices up whilst keeping rental income sustainable over a period of time.

Many first-time investors only consider their local area when it comes to investment which is a rookie mistake. The best place to invest is rarely around the corner from where you live and with a slew of managing companies out there to handle all the lettings responsibilities of your property, it enables you to look anywhere in the country.

Consider who you work with

Working with trusted and established developers, solicitors, managing companies etc. is key to every investment you make. The last thing you want is to be let down by unscrupulous or incompetent companies who leave your investment in serious jeopardy.

Take the time to investigate the developer’s background for the property you’re buying. Make sure they have a track record of delivering sites on time and that sales progression will run smoothly. The same principle applies to the managing company you may employ to take your property on for you.

Consider new builds vs second hand property

You may want to invest in a picturesque 3-bed period setting house, but then realise it requires a lot of maintenance work to bring it up to a good standard that will cost lots of money and eat into your profits. Also, if you choose a house, you may be responsible for finding tenants, and must be on-call to address any of their questions or problems.

Whilst these sorts of houses are innately charming, investors can be deterred by the constant upkeep and renovations. Many now opt for new builds or houses that have been refurbished by an experienced developer. The benefit of these types of investments is that being new, fixtures and fittings are likely to be in good working order. Also, blocks of flats are usually managed by an external company, which means investors do not have to spend their time sourcing new tenants and answering queries.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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How to generate enough money through property investment for retirement

How to generate enough money through property investment for retirement

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Happy New Year everyone! Tarquin Jones are back for 2019 and we hope you’ve all had a great start to the year.

To kick off the new year, today’s article will cover one of the main motivations for many buy to let property investors- earning enough money to retire with through property investment. Hopefully the tips within this will help you self-fund your own pension when you decide to retire.

Choose an area where there is an low supply

Following on from point number one you’ve now chosen an investment in an area with high demand. The key is to uncover areas with a limited supply. Ideally, you would want to identify the demand in an area before other people have discovered it. Sometimes it is not always feasible to seek out undiscovered areas in the UK.

What is to stop other developers from recognising the appeal and lucrative returns, and build luxury retirement homes in areas that will eventually rival your own investment? You will need to consider the and barriers to entry. In areas such as Devon, there are lots of National Parks and Areas of Outstanding Natural Beauty, which must be conserved. Local government initiatives that control the supply of property can include restrictive planning permission for new build properties. Aside from local measures, the national government prohibits building on vast swathes of land under the Green Belt (Protection) Bill 2017-19. This means that there is only a limited amount of space to build upon, thereby limiting competition from other developers.

Choose somewhere in an area with a high demand

Firstly, you will need to evaluate the demand for the property type you are purchasing in that area. There would be little point in buying a student property in the middle of the countryside away from all universities, or in a town where the local university is able to cater for most students. Similarly, with retirement property older people tend to move away from cities and settle in quieter villages in the countryside or by the sea, so it makes sense to look for retirement complexes that are situated in these areas. Our UK retirement home investments are often situated in seaside towns in the south west of England, in counties such as Devon and Cornwall. In an area where an existing retirement village is located, one in four people are over the age of 65.

Unique position or service offering

If it is the case that you invest in a city with lots of competition, you should choose a property that has a unique appeal. This could be the additional onsite amenities, the build quality, the historical aspect of the building or location.  “Often our retirement home investment opportunities are refurbishments of Grade II listed buildings, and their historical heritage really appeals to the elderly generation. Our investments also include luxury amenities such as spa and beauty treatment centres, cinema rooms and fine dining experiences”. Says investment director at One Touch Property.

Sustainability of investment

Once you have done your due diligence and have selected an investment in an area where there is an undersupply, it is time to start considering the longevity of the investment. You don’t want to pick an investment with a limited market. For example, you may choose to invest in a retirement home in Portugal which accommodates British expats, but Brexit may affect the number of British people choosing to live in Portugal which would dramatically affect the income you receive. Therefore, if you are looking to invest for long-term income, it is also better to think long term.

By following what I’ve mentioned here, you will give yourself the best chance of making lucrative investments that will allow you to retire on your own terms and live the lifestyle you’ve become accustomed to. Living off the income from your property portfolio post retirement or selling what you own are two ways to reap the rewards you’ve sowed down the years. Regardless of your choice, investing in property is widely considered one of the best ways to secure your retirement fund years down the line.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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UK Property Markets- what to expect in 2019

UK Property Markets- what to expect in 2019

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With Britain’s impending exit from the European Union, many investors both home and abroad have apprehensions about investing in property in the UK. However, there has been success stories with many domestic and foreign investors which looks set to continue in many parts of the UK.

In this article, we will make a few predictions on what we expect to happen with the UK property markets in 2019.

No clarity on London markets until Brexit is sorted

If the deal Britain gets is a bad one as far as our exit from the European Union is concerned, then it’s likely matters in the London markets will continue to be stagnant and therefore not change all that much. It’s been no secret that prices in the capital have remained dormant for the last year or two as a result of the Brexit referendum.

London has long been the best place to invest in order to achieve capital growth- it hasn’t had a strong yield for several years, so with the main selling point for London property not there are the moment, many investors have turned to other major UK cities in order to achieve their investment goals. This trend we feel is likely to continue in 2019, but it’s also possible the London markets could rebound if political matters surrounding Brexit improve.

Regional markets will prove the most resilient

With so much uncertainty in the capital, it’s expected that regional property markets in other areas of the UK will be bolstered and continue to prove, which has been the case since 2016.

In a recent article based on Hometrack’s UK Cities House Price Index, Zoopla named the best cities to buy property. They included Leicester, Manchester, Birmingham and Edinburgh in the top 4, with Liverpool, Sheffield and Leeds making it into the top 10.

We expect market conditions in 2019 to favour more regional areas of the UK as London will likely feel the brunt of any political ramifications instead.

Rise in interest rates

Governer of the Bank of England Mark Carney has indicated that interest rates will continue to rise but slowly over time. With that in mind, it’s highly likely that the current base rate of 0.75%, which increased from 0.5% earlier this year, is set to rise at a similar pace throughout 2019.

We think 1% is a minimum expectation for interest rates to rise to, and this could possibly increase later on in the year depending on how Brexit pans out. This will naturally increase the cost of many mortgages to households, which may deter some investors from residential property, but not nearly enough in our opinion to have a majorly negative effect.

Supply and demand gap to increase even further

This is perhaps one of the easiest predictions to make regarding property markets in 2019; the reason being that the gap between properties being built and the actual demand for them has been growing year on year for several decades.

With all of the political talk surrounding Brexit, there are no real measures or serious indication from the government that will adequately increase supply to meet the ever-growing demand.

With this in mind, we can only see house prices as a whole rising across the UK (we accept the national average may be slow to increase but this is largely as a result of the stagnant London markets massively affecting the average.)

Slow start to 2019, but things to pick up as the year goes on

With the vote on the Brexit deal in parliament in January and the UK’s expected exit from the European Union by April/March, it’s entirely likely the markets will be uncertain for the first half of 2019, but many experts are predicting the property markets to pick up once the political situation is clearer later on in the year.

Next year, JLL says they expect an initial slump at the beginning of next year, showing 1 per cent growth in the first six months, then picking up in the second half to make 1.5 per cent growth by the end of the year. This should grow to 11 per cent in the next five years.

Adam Challis, head of UK Residential Research, says “With UK earnings growth set to return to a more normal rate of 4 per cent per annum by 2021, real wage growth and more modest property price increases will unlock transactions that have been hampered by a lack of affordability.”

So, these are just a few of the things to expect regarding the UK property markets in 2019. Obviously, much of this is subject to Brexit but we feel that many of these predictions will happen and shape the UK markets to increase in capital growth for the most part.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.  

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Best Northern UK cities to invest in

Best Northern UK cities to invest in

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The Northern Powerhouse continues to have the desired effect of regenerating major northern UK cities. As a result of this, investors looking for excellent Buy-To-Lets delivering on capital growth and rental returns are turning to these northern hotspots.

IP Global’s latest report has listed the following as the best UK northern property hotspots-

Liverpool

The North West of England in general is a prime property hotspot and Liverpool sits right at the heart of all the regeneration the region is experiencing. £5.5 billion has gone into the city centre alone in terms of rejuvenating the cities infrastructure, transport links and amenities. This money has trickled out into surrounding areas like Bootle and Birkenhead which combine excellent rental yields with capital appreciation- the L7 postcode alone is bringing in average rental returns of a huge 12.63%.

House prices in Liverpool have risen by 2.4% over the last year and monthly rents have risen by 5.2% over the same time period to £765. Properties in the private sector are becoming more and more popular with landlords with 26% of all homes built last year being bought by investors. This just goes to show the city is proving popular with those looking to capitalise with Liverpool set to become a true international city in the upcoming years.

Manchester

Forming part of the North West with Liverpool, Manchester is also pinned by IP Global’s report as a major property hotspot. JLL predicts rental growth to hit 16.5% over the next four years, average yields in the city are currently around 7%, with properties priced at an average £182,630 – a 10.4% rise over the past year according to the figures.

Graham Davidson, managing director at Sequre Property Investment, said: “Investors who continue to chase capital growth in the south rather than switching to the north-west may find themselves struggling not only to break even on rental yields, but to make any capital growth profit.”

Birmingham

The prospect of HS2 has played a massive role in Birmingham’s status as a UK property hotspot. Many major companies and businesses have relocated there, HSBC and Deutsche Bank being two, and as such demand for property here is incredibly high. Here, yields according to IP Global are 6.2% annually, while an average property can be bought for £200,430, which is 8.9% higher than last year.

New proposed metrolinks running in the city centre easily links it to the HS2 station and Birmingham International Airport contribute to the major regeneration happening. With big works being done to Birmingham New Street station as well, many investors are eyeing up off-plan developments at the heart of all this with huge capital appreciation expected in the future.

The Birmingham area is set to be transformed for the 2022 Commonwealth Games, so investors who buy now will be set to benefit from this added investment as well.

Leeds

IP Global’s report shows that Leeds is struggling big time to meet the ever-growing demand for property. 90,000 new homes are needed by 2021 but there are only 60,000 in the pipeline. This shortfall is only set to bump up prices even further in Leeds with the city already rising by 4% over the last year. Rental growth is expected to rise by 18.8% by 2022 as well according to research.

Yields of 6.8% can be achieved in the area, with average homes costing £196,720 and rents fetching £947 a month.

Hamish Pound, the head of investment at IP Global, said: “We advise investors to focus on supply and demand because an imbalance here is likely to provide the greatest gains.”

A common feature of all these major cities is the fact they are all big student/university towns. This only serves to increase the demand further as more and more flock to these hotspots to study and live there. Prices can only go up further because of the supply struggling to meet this sustainable growing demand.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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Why to invest in property rather than live in it

Why to invest in property rather than live in it

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Property investment is something that many want to do but are not able to do it just yet. Alternatively, there are those who do have the means to invest but don’t do so for several reasons. This may be down to fear, lack of education or just a general unwillingness to do anything about it. In this article, I will make the case for property investment and why you shouldn’t delay if you have the means to do it.

BTL and residential search the same thing? Definitely not!

Many first-time investors will be looking to treat a property as a place for themselves to live as well as an investment. This is the wrong approach to take- a residential home carries completely different objectives to those of a property investment, and because of this, many first-time buyers look exclusively within their local area. This limits the buyer to properties in one location as opposed to many across the country, and with a slew of managing companies providing a completely hands-off investment approach, this enables investors to look anywhere with no limitations.

Saving money

Expensive and ever-rising rents are straining young people’s potential for saving. In addition to consistently low wages and very little chance of a raise, young professionals are struggling to live within their salaries.

As well as this, having a relatively low salary, with little opportunity for promotion, is restricting the chance of getting a mortgage from a lender. The only viable route to home ownership for many people in the younger generations is borrowing from family or parents.

The top three suggestions for the best way to get on the property ladder revolved around relying on ‘the bank of mum and dad’ or other family members to help.

Investing as an alternative

Property investment could be the key to young people getting themselves into property ownership. Traditionally, the UK has been focused on owning and living in a property but opening the idea of buying a property to rent out could help first-time buyers on their way.

Investing money into property that can then be used to provide an income is a viable option for young people to consider. Once the mindset has shifted, they will find that it’s no longer a pipe dream, and they could potentially invest without relying on family help.

Securing a mortgage for a Buy-to-Let property isn’t necessarily impossible for people aged 18 to 25, although some lenders won’t allow it. There are group investment schemes open to young investors, and with some research and sensible decision making, owning a home could be safely within their reach.

Change in millennials approach

It’s becoming harder and harder for the younger generation to own their own property which is down to wages not increasing in accordance with rising property prices. Not only is there a financial side to this, but also a change in attitude. Many young people accept they won’t own the property they live in and welcome the flexibility that renting brings. Buying a property to rent out as opposed to live is therefore becoming more and more popular amongst young people

While the older generation is stepping up to help their children reach their goals of owning a home, it could be that there is another way. Home ownership need not be beyond the reach of younger people, but they may need to change their mindset and accept that they won’t be living in the property they buy.

Shared ownership

Around 12% of respondents said that buying a property with a partner or friend was the best way for young people. Around a tenth thought that a Shared Ownership scheme is the way to go. The least popular responses included marrying a rich person at 5% and buying an overseas property at just 1%.

Pitiful pension schemes and interest rates

Between the state pension and low interest rates, there is a big chance many will retire with a small pension fund and their money having accumulated little in the bank. An extensive BTL property portfolio allows you to self-fund your pension and live a life of luxury in retirement.

The rental income you attain will be enough to live the life you’ve become accustomed to, or you could sell large chunks of your portfolio for a huge profit. Either way, you are not reliant on any bank or pension fund to secure your future.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

 

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Why to invest in car parking spaces

Why to invest in car parking spaces

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One of the most commonly overlooked forms of investment just happens to be one of the most profitable right now. It seems crazy to some that a piece of tarmac at an airport can deliver such high returns, but to any serious open-minded investor this makes perfect sense and can prove a shrewd low-cost investment. Here I will detail some of the reasons why you as an investor should start taking car parking spaces as a serious opportunity to create wealth.

Demand always increasing

Airport parking in the UK is worth around £9.5 billion per year (gross rental income) so it’s no surprise to see many investors wanting a piece of the action.

The bulk of car parking space deals are situated at airports so naturally there is always a strong demand for usage. Consider how many people go on holiday every year- 2017 statistics from NATS, the UK’s leading provider of air traffic control services, reported over 770,000 flights that summer alone, which is the highest number in its history. Airports have to expand just to meet this growing demand and this means major extensions to parking bays, or even building whole new ones. The concept of high demand and low supply which drives up property prices applies to all forms of property and car parking spaces are no different. Demand is outstripping supply and as such, increases in prices and returns are inevitable.

How does it work?

It works much the same as most forms of property investment. Simply put, you put your money into a car parking space on a hands-off lease meaning you buy this and essentially forget about it. The seller will usually, but not always, offer a buyback option in which you can sell your space back to them or continue letting it out.

You will receive a Title Deed upon purchase which confirms your ownership. Your minimum income can be written into the contract so that the freeholders are obliged to pay you a certain amount of rent. Your income can be paid monthly, quarterly or yearly and is not subject to VAT.

How much do I need?

One of the most attractive aspects of this type of investment is the relatively low entry cost. You would typically need around £20,000 minimum to buy a car parking space, although this can be higher depending on which airport you are buying in. Airport parking works as a perfect option for those looking to make their first investment or those with a low cash deposit looking to make good rental returns.

Diversify your portfolio

Investments such as this can flesh out an investor’s portfolio, and what I mean by that is to minimise the risks involved with only purchasing one type of property. If one type of property i.e. student lets takes a hit and you only own this type of property, you are in a position where you have no alternatives available for a good cash flow. It’s important to not put all your eggs in one basket so to speak and because car parking spaces are comparatively low cost, they are a sound option to avoid the volatility that the markets can sometimes be.

No repair or maintenance issues

One of the most common headaches involved with Buy-To-Let residential property is potential tenant damage which can prove costly to the landlord. Fire damage, water damage and general repair and maintenance are all issues which investors can do without. With parking spaces, all of that is highly unlikely to happen which provides peace of mind and leaves many buyers safe in the knowledge that they’ve bought a hassle-free investment.

Know you you’re dealing with

This applies to any investor when they’re looking to invest in any property, but it’s vitally important to do your due diligence when investing in a car parking space. If you’re working with an agent and they inform you of a car parking space deal, make sure you find out about the people behind this deal. Get them to send over all the relevant information on them so you can see if they’re a reputable and established company with a proven track record. Brochures, RICS and sales agreements are the sorts of things you want to have a look at. If everything looks good, that’s when you will want to proceed.

This all makes for a safe, low level low risk investment that is perfect to either start or diversify your property portfolio. The usual cautionary tales do apply but the figures only show consistent air travel growth which is set to continue in the future. It’s an investment avenue that largely goes under the radar but with such a massive disparity between supply and demand, any investor looking for great returns should definitely take a closer look at car parking spaces. It can make for a solid investment with a constant increase in demand.

For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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Tips for starting and building your Buy to Let property portfolio

Tips for starting and building your Buy to Let property portfolio

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Many budding first-time investors have the money, but don’t know where to start when considering property investment.

By following these basic tips, you can identify the most attractive Buy to Lets that fit in accordingly with your goals and aims.

Decide your ambitions

Before making any kind of investment, you need to know what you want to get out of it. Do you want to build an extensive property portfolio focused on long term gains? Or would you rather buy property in order to sell on for capital growth?

There are a variety of property sectors including residential, commercial and student investments. They all fulfil different goals, for example, student property is best for sustainable rental returns, but residential property is superior in terms of capital growth. Know which is best according to your budget and proceed from there.

Know which investments to avoid

Alarm bells go off for experienced investors when they come across a deal that should be avoided. Green investors usually don’t have this same mindset due to a lack of experience and some get their fingers burnt as a result.

Do your due diligence on each and every investment you make. Check out who the developers are and if they have a proven track record of delivering projects on time. Similar background checks should be undertaken for those that progress your sale for you i.e. solicitors, mortgage brokers, lenders etc.

Only once you are satisfied with all of this should you invest your money. Property investment is a massive expense for most people and the last thing you want is for your sale to be held up by greed or incompetence from a party you didn’t do your due diligence on.

Make an investment plan

Once you know your investment goals, you need to devise an investment plan. You may have a sizeable cash deposit but are unsure of where to put it or how much to spend on one particular property.

My advice would be to start off with a low risk, low cash investment that allows a first-time investor to dip their toe in the markets so to speak. This gives you a flavor of what to expect in the BTL markets and earn a decent income along the way. Once you own a few of these types of investments, you may then choose to look into higher risk investments that require a larger deposit.

Even then, only do so if you are willing to accept the risk of losing the money you put into them!

Diversify your portfolio

All property investments carry some form of risk, but you can take steps to minimize this by investing in a variety of different property sectors. Any one type of property can fluctuate in terms of pricing- for example, huge office space take ups may lead to a boom for properties in the commercial sector. Simultaneously, a government measure or political news may lead to a blip for properties in the residential sector. By diversifying, you are able to profit even when market conditions harm one aspect of your property portfolio.

It can help you smooth out the returns while still achieving growth and reduce the overall risk in your portfolio.

Hands on or hands free?

Being a property investor/landlord can either be a full-time job or as hands-off as you like. In our experience, most people don’t have the time effort or means to take on all the responsibilities that being a landlord comes with.

If you want to be hands-on and enjoy making investment decisions, make sure you are able to be fully committed to the running and managing of your properties. Finding a good tenant, maintenance and repair issues and void periods are just a few of the responsibilities involved.

If you don’t have the time or inclination to be hands-on – or if you only have a small amount of money to invest – then a popular choice is to find an experienced and established managing company to handle everything. For those who have busy lives involving family and work, this is the preferred option. Many people see the necessary managing fees as a small price to pay for earning a good income whilst being able to enjoy their lives unhindered by property.

Check the extra charges

When investing in a property, you are going to have to pay a variety of extra fees alongside the actual purchase price of your Buy to Let. These may include-

  • Service charge and ground rent (for a leasehold property)
  • Lettings and management fees
  • Solicitors fees
  • Mortgage broker costs
  • Stamp duty
  • Mortgage repayments

Ask any firm to explain all their charges so you know what you will pay, before committing your money.

While higher charges can sometimes mean better quality, always ask yourself if what you’re being charged is reasonable and if you can get similar quality and pay less elsewhere.

For more information about our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at info@tarquinjones.com for more details.

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