Buying real estate in the UK can be a cost-effective way of securing your retirement income or realising an asset that you may have accrued through hard work and dedication. Research by Zoopla Property Group has found that real estate investment UK returns are currently at three per cent above inflation, consistently outperforming most forms of investments available. This has led many real estate investors to consider real estate investment in the UK as a dependable source of income.
The Property Market
UK real estate is not currently in its top state, and it is anticipated that prices will drop further. In 2010, real estate rose by two per cent but had dropped every year since, with prices falling by 16 per cent; however, today, it is a different story. The COVID 19 pandemic have risen and are expected to rise further.
The best areas to buy property in the UK including London, Surrey and Wokingham, where real estate prices are the highest. It is predicted that real estate prices will rise by 6 per cent in 2020, but this is a long way off, and real estate investors have to be calculated of their investments.
There are many different considerations before purchasing real estate in the UK. Property can cost a lot at first sight, but real estate investment should not be based on the initial outlay price alone; you must also consider other costs such as maintenance and tax paid throughout the year. In addition to this, making sure you follow planning rules regarding your real estate investment property can learn expensive if they fail to become approved by council officials, so make sure you carefully weigh up all options before committing to it!
What about stamp duty?
First of all, you must remember to factor stamp duty into your real estate investment. It is a government tax that is payable when purchasing property in the UK if the price you are paying for it exceeds £125,000. This tax also applies over and above council tax.
What about mortgages?
The real estate market these days does not allow much room for saving money on deposits as banks now demand significantly larger down payments than they used to be. As such, some real estate investors make use of mortgages earned through friends or family members rather than choosing bank-financed loans because this can save them a lot of money – although mortgage interest rates can be higher than those charged by banks, the total amount that has to paid back will be less.
Take your time and do proper research before you decide on real estate investment. UK real estate agencies and agents will provide you with all the information that you need about real estate in the UK and the processes involved.
There are different types of real estate financing depending on whether it is residential or commercial real estate. In both instances, the goal is to buy a property from its current owner via a real estate agent on behalf of an investor for more than its market value but less than its asking price through a real-estate mortgage loan or private funding. The difference between these loans is that if the value of the home depreciates during this time, bank-financed mortgages have stricter terms regarding their defaulting, which makes them much riskier for investors.
Don’t forget to make sure that you have considered all of the risks and benefits associated with real estate purchase loans before applying for them. First, make sure that you will be able to pay off the real estate loan even if its terms are very strict regarding defaults. Also, real estate financing is expensive when factoring in maintenance fees, so consider whether the additional cost is worth it or not.
In real-estate mortgage loans where there is a lender involved, their main role is to assess value of your home as well as other property details like any potential mortgage pre-approval process. A realtor can also help you choose which type of real property financing would work best, depending on your situation.