Long-term UK property investments

August 23, 2022

The UK property market is a prime example of how long-term investments can reap the best rewards for savvy investors.

There are numerous ways to invest in UK property, from ‘flipping’ houses for a quick profit to purchasing a buy-to-let, or even investing in a real estate investment trust (REIT) as a more indirect option.

Most experts agree, though, that property investment should be viewed as a long-term asset - the longer you hold onto it, the more money you are likely to make. This is backed up when taking historic property performance data into consideration, as well as when comparing property investment with stocks and shares or other more volatile options.

While some prospective investors may baulk at whatever is going on in the current market, including economic uncertainty and other external events, taking the long view reassures most investors that bricks and mortar can be a stable place to focus your attention.

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Case study: Manchester

Employing a ‘watch and wait’ strategy has certainly paid off for those who invested in Manchester property two decades ago.

Recent research published by Plumbnation, which analysed figures from the Office for National Statistics (ONS), revealed that over the last 20 years - between 2002 and 2022 - house prices in Manchester have soared by 331.26%. The average home in the city now costs around £210,647, compared with £48,845 back in 2002.

The results make it the fastest-growing city in the UK over the time period, and they demonstrate an overall trend in the UK housing market for ongoing capital appreciation, despite any hurdles. Over the past 20 years, the country has experienced several financial crises, recessions and various economic and political difficulties that have thrown things off-course for a period of time, but the property market’s overall growth trajectory has been positive.

The report also looked at how various property types have performed over the time period, influenced by changing trends and preferences over the years. The average price of a flat or maisonette, for example, has risen by 258.85% in two decades, from £49,943 to £179,220, marking quite a hefty gain for property owners.

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Off-plan investment

Investing in off-plan property is one popular method employed by many buyers to maximise the gains they can make on their investment. This is particularly effective for those who want to enjoy the benefits of investing in a new-build but at a cheaper price.

Buying off-plan means investing when the property is not yet built. When compared to a fully market-ready new-build, the price can be considerably lower. By the time the property has then been fully constructed, the value could already have risen, and some investors choose to ‘cash in’ and sell at this point. Others will hold onto it to reap longer-term rewards.

As an example of this, one of The Prestbury Advisory’s Liverpool sites, which currently has units available to buy off-plan, has prices starting at £158,500. With a 4.5% year-on-year growth projected, and taking into account the 5% off-market discount available to buyers, investors can expect to see the value grow by £23,420 over the two-year build period.

Furthermore, those with a view to the future are recognising the benefits of investing in a newly built property as opposed to a more dated one. With soaring energy costs as well as the worldwide focus on environmental accountability, the energy efficiency of new properties compared to older homes is a huge draw for investors right now. As tenants and buyers increasingly hone in on energy performance certificates (EPCs), owning a property with greener credentials is another way of future-proofing your investment.

The Prestbury Advisory has a carefully curated and continually moving portfolio of property investments to offer investors. Call us on 01625 725 779, or email us at contact@theprestburyadvisory.com to find out more.

Long-term UK property investments

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