Looking To Expand Your UK Property Portfolio? Here are The 4 Things to Watch
Given the demand for rental property, the increase in buyer demand and the rising property prices in the UK, many homeowners and property investors are thinking about expanding their portfolio. Many landlords are looking to make the most of the increased demand for rental properties; for the first time in six years, renting a property in the UK has become cheaper than buying one, due to which the demand for rental properties is on the rise. In 2020 and 2021, many investors and potential buyers decided to hold out on future investments, due to the uncertainty around Covid-19. Now, as the vaccine has rolled out, the UK housing market has revived, and the buyer demand is continuing to increase, property investors are thinking of expanding their portfolios. As per estate agents in Rainham, here are the four things to look out for while expanding your property portfolio in 2022.
1 Understand market trends
As more and more people started working from home, the buyer’s preference changed drastically in 2021. Instead of looking at city centre properties, potential buyers and homeowners were now looking to move to the outskirts, the suburbs and the boroughs where they could purchase spacious homes at relatively affordable prices. However, in 2022, as offices start to open up and people start going back to work, the demand for city-centre properties could start rising again. With that being said, some experts believe that the demand for bigger properties with open spaces and private gardens will continue to rise in 2022, as the future potential buyer is looking to improve their lifestyle. As an investor, you need to understand the market trends and invest in the property market accordingly.
2 Choose the right locations
If 2021 proved anything about the housing market, it was that the UK housing market was chaotic and frantic. From November 2020 to November 2021, the average property prices in the UK increased by a whopping 10 per cent! Surprisingly, London saw the lowest annual growth with a mere 5 per cent increase in property prices. On the other hand, Newark in the East Midlands saw a large annual growth of 20 per cent in the year and the average price of property in Rochdale in Greater Manchester increased by a massive 18.5 per cent. In a shocking turn of events, prime locations such as Westminster in London saw a 6.9 per cent drop in property prices. Keeping the above figures in mind, potential buyers and investors need to choose the right property in the right location. According to the experts, Nottingham, Kilmarnock, Leeds, Romford, Northampton and Newport are all set to see the highest growth pace in 2022. Northampton and Nottingham are the best areas to invest in for long-term investments, whereas Newport and Romford are the best areas for buy-to-let investments.
3 Find the right property
Before you start adding properties to your portfolio, make sure that you invest in the right type of properties. Do you want to invest in a two-bedroom apartment in the city or a two-bedroom house in the outskirts? Would you rather invest in an apartment in an upcoming building or buy a spacious mansion? As an investor, what is your investment strategy? Would you rather invest in a property that will give you decent monthly rentals or a property that will appreciate over time? Essentially, you need to understand what type of investor you want to be, what type of properties you want to invest in, and then based on that, you need to find the right properties in the right locations.
4 Get the right mortgage
Most property investors want to pay off their mortgage as quickly as possible, which is why they apply for shorter mortgages. However, if you are looking to invest in multiple properties over a certain period, it might be a better idea to opt for a long-term mortgage. When you have a short term mortgage, you might be able to pay off your mortgage quickly, but you will be stuck paying high amounts every month which might not leave you with enough capital to invest in another property until the mortgage is paid off. On the other hand, by opting for a longer mortgage term, you will be able to pay a lesser amount every month which could leave you with enough to put down a deposit for a new property. Of course, a longer mortgage term will mean more interest. Based on your future goals and the kind of portfolio you want to have in the next 10 or 20 years, you need to decide what kind of mortgage you want. Getting the right mortgage from the right lender is of utmost importance – after all, when it comes to the rate of interest, even 1 per cent can make a big difference.
