As an investor, I love the U.K. residential real-estate market. Here’s why.
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I am often asked why I focus my investment portfolio on residential property in the U.K. There are many other assets that I could invest in: the stock market, cryptocurrency, commercial property or international real estate being just a few possible options. But for me, there is something special about homes in the green and pleasant U.K.
Of course, part of the reason I like this market so much is that it is my area of expertise. It is important to know about whatever you choose to invest in. It is a good idea to become a master of one sector rather than an amateur of many. But there are some tangible reasons to choose the U.K. property option as well. It is a juicy and profitable market if you know where to look. In this article, I will look at just three of the many reasons why I love residential real estate in the U.K.
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1. Limited supply, increasing demand
The U.K. is a small country, but it is a popular destination for people from across the world. From tourism to education to immigration, the U.K. is a prime destination for many people. Commonwealth nations are a particular source of this popularity, and many citizens of those nations choose to make Britain their home. As the population grows, so does the need for housing.
In a small country with protected countryside (known as “greenbelt land”) where construction is very tightly controlled, the supply of housing is limited. Combine that with an increase in demand, and you can see why the U.K. is such a good choice for investment! While we can meet this demand by continued construction, property in popular areas will still be in high demand. It is a safe assumption that property prices will rise in real terms here over time, based on this factor alone.
2. Hidden gems
A lot of overseas investors look to London as a key place to invest. But the return on investment (ROI) in London isn’t particularly strong. Great property deals are often found in the Midlands and the North, places often overlooked. As a property trainer, the strategy I teach my students is to “buy low, rent high with a property manager nearby.” This allows them to find the bargain properties even if they are not in their local area. Finding the hidden gems is key to the property market in the U.K., especially for those that are just starting out and are not multimillionaires … yet.
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3. Commercial to residential conversions
With much of retail struggling because of current circumstances and many people choosing to work from home, commercial to residential conversions are an amazing opportunity right now. The even better news is that the government has recently reformed planning law, making it a whole lot easier to do this without excessively long planning-approval processes. This makes now a perfect time to get started with this strategy in the U.K.!
In this period of transition, while the world is changing, there are many opportunities to help make the necessary improvements and be fairly compensated for doing so. Creating new homes out of old commercial property is just one of them. There are so many ways to make money in real estate in the U.K., and I really hope this article has gotten you thinking about how you can get involved too.
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