Monthly Archives: January 2017

Investing in Your First Property as a Landlord

Although certain sectors of the property market are expected to slightly weaker in 2017, investing in property is still one of the best ways to make money in the UK. Residential property is particularly strong as many people are now unable or unwilling to invest while the job market is so unstable.

Below are some of the most important things to consider when investing in your first property.

Location

Location is extremely important when investing in your first property. Many people think of London as being on the best places to invest in property due to how densely populated it is, however that isn’t necessarily the case. A recent article by Money Week explains how Birmingham currently offers a better return for property investers than London.

Type of property

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The type of property you want to invest in is another thing you should think about carefully. Certain sectors are predicted to perform better in the 2017 than others. For example, industrial property is predicted to perform very well, as large retail chains require more stock space. You should do your research and think carefully before committing and never be afraid to ask for advice from people who are currently operating in the property market.

Current state

When considering a property, you should always think about how much work and money it will take in order for you to be able to let it out. If a property needs a lot of renovation then you not only have to think about the time and expense required but also that you’ll need to have it insured while it’s unoccupied. Residential buildings that are unoccupied are at considerably greater risk so you should certainly take this into account.

Insurance

In addition to the initial expense of a property, you also need to think about how much it will cost to insure. Properties in low crime areas typically cost less to insure so they’re usually a wise investment. A good landlord insurance policy will cover you for structural damage, liability claims and contents. The value and security of the property will affect the price you pay for landlord insurance, as well as where the property is located.

 

Economic and Political Uncertainty Predicted to Affect Property Returns in 2017

Given everything that happened during 2016, it was a very strong year for property – something that came as a surprise to many people. The value of the average house increased by 6.5% over the course of the year and although that figure is lower compared to the previous year, it’s still impressive all things considered.

Many people had predicted a poor year for property at the start of 2016 and after the British public voted to leave the EU in June, that feeling only strengthened. It was expected that many of the wealthier people who live in the capital would move and create a trickle-down effect that would negatively impact the entire property market but that did not happen.

Despite 2016 being a strong year for property, many experts predict that 2017 could be quite different. Halifax’s housing economist, Martin Ellis, had the following to say –

“Slower economic growth, pressure on employment and a squeeze on spending power, together with affordability constraints, are expected to reduce housing demand during 2017.

“UK house prices should, however, continue to be supported by an ongoing shortage of property for sale, low levels of housebuilding, and exceptionally low interest rates.

“Overall, annual house price growth nationally is most likely expected to slow to between one and four per cent by the end of 2017. The relatively wide range for the forecast reflects the higher than normal degree of uncertainty regarding the prospects for the UK economy this year.”

An article from The Telegraph also demonstrates how property returns are likely to be lower in 2017 compared to the previous couple of years. The lower returns won’t affect all sectors, with industrial property predicted to perform well, not least because of the needs of mega retailers such as Amazon, who continue to expand their operation.

Agricultural property could easily take a hit in 2017 however, as the full effects of Brexit on the farming industry are yet to be seen.