Five Common Myths about UK Property Investments
UK property is among the world’s most highly regarded assets among investors, prioritising stability and reliable growth; precisely why investors from all over the world set their sights on key regions of the UK, over and above other property hotspots worldwide.
Even today, there are numerous long-standing myths about the country’s real estate sector that can be dangerously misleading. Specifically, the following five myths are among the most common right now, each with the potential to adversely affect the decisions of investors:
- There’s greater supply than demand for city-centre living
The COVID-19 crisis may have had a major impact on the property purchase decisions of the UK public. However, in almost all areas of the UK demand for city-centre living continues to comfortably outpace supply. It is worth remembering that just because house price growth has been slowing for some time in London, it does not mean the same is happening elsewhere.
Take Manchester for example, where five-year property price growth is expected to exceed 17%.
- You should never invest in properties before they are built
This can actually be a uniquely profitable approach to property bond investments. This is due to the fact that prior to a property development project being realised, there is no risk of subsequent capital gains increasing the price of the property. Immediately after a home or commercial property has been built, its market value could begin to skyrocket.
Consequently, buying into the property at the earliest possible stage could have saved you a small fortune, while maximising subsequent profits.
- The cheapest buy-to-let properties are always the biggest money-makers
Some say never look a gift horse in the mouth, as bargains are few and far between, others will tell you that if something looks too good to be true it almost always is. In this instance, it is the latter that has it right. Bargain buy-to-let properties are typically sold at bargain prices for a reason; areas of low demand, unreliable tenant histories, and comparatively poor rent yields are all more likely to apply with a BTL property sold cheap.
No BTL investment decision should ever be based exclusively on the initial purchase price of the property.
- Now is not the time to be considering property investments
It may seem logical on the surface to wait and see what happens with the pandemic and the economy before investing in property, when in reality the best thing to do is invest in property and then wait to see what happens. The latest estimates suggest that the UK’s economy is set for a period of growth faster than at any point in the last seven decades.
Long story short, nobody is predicting anything other than big things to come for the real estate sector, making now the time to invest.
- If I change my mind, exiting the sector is too much trouble
The UK’s real estate sector is perhaps the easiest of all to exit; demand continues to outstrip supply for all types of desirable properties in all regions of the UK which means that if you purchase a decent property in the first place, people will be fighting tooth and nail to buy it from you at a later date.
There may be no such thing as a 100% safe haven, but the UK’s real estate sector is just about as close as it gets right now.