Yes, you can purchase many investment properties using a mortgage, which can leverage your buying power. There may be certain opportunities, including some Purpose Built Student Accommodation, where a mortgage might not be possible. Our advisors will be able to discuss your options with you once you have an investment in mind.
Yes, you can purchase a UK buy-to-let property through a limited company, and it is a popular choice for investors around the world. In the right circumstances, it can offer significant advantages to investors.
Yes, you are welcome to use your own solicitor. However, it is worth considering that our recommended solicitors will have a thorough understanding of the UK buy-to-let purchasing process and the legal requirements when investing, reducing the likelihood of any costly delays and penalties.
Yes, overseas investors can purchase UK buy-to-let property. Globally acknowledged as a reliable investment, the UK market offers overseas investors consistent rental returns and capital growth in an established market. Read more here to see why the UK property market is number one for overseas investors.
Every investment is unique, and the properties you buy should correspond to your personal financial goals. We advise that first you should consider if you are investing for the short- or long-term, if you would like to purchase with cash or leverage, and if the location of the property is important to your investment. If you would like to discuss this with one of our advisors, please get in touch for a free, no-pressure consultation.
Depending on where you invest and the type of property you are looking to buy, the amount required to purchase varies, but we recommend that you have a minimum of £30,000 cash available if you are looking to invest in the UK. If you are purchasing in a more competitive, high-value market, you are likely to need more than that.
There is no ‘best’ way to invest in buy-to-let property. The important thing is that you do what suits your individual financial goals and budget. If your goal is to grow a portfolio beyond your cash reserves, then leveraging could be the route for you. If you are looking to buy one property and receive the full rental income each month, then a cash purchase may be a better option. To discover which may be the right choice for you, read our in-depth insight here.
As with all investments, purchasing UK buy-to-let property has its own risks. These can include cash-flow restraints or tax and compliance issues. Our advisors would always recommend performing extensive due diligence to mitigate these risks and to make the most of your investment.
Construction delays are not uncommon in UK property development, but usually cause minor inconvenience rather than financial loss. Delays are not always a negative; depending on the investment, investors could in fact benefit from the market rising during construction, rents increasing before completion, and the finishes exceeding expectations.
A buy-to-let (BTL) investment is when a property is bought with the intention of letting it out to tenants rather than for the purchaser to live in it themselves. The most common reasons for this strategy are to generate regular income from rental payments and to benefit from capital appreciation over time.
In property, capital appreciation happens as the property becomes more valuable over time. Reasons for property values increasing over time include an increased demand in the area, economic growth, transport improvements, regeneration projects, supply and demand imbalance and inflation.
Buying a freehold property means you will own the property and the land it sits on. In the UK, freehold is considered the most complete form of property ownership.
Buying a leasehold property means you will own the property for a fixed number of years, and the land is owned by a freeholder (landlord). Common in apartments, owners may be expected to pay ground rent, service charges and maintenance fees.
Stamp Duty is a UK government tax, paid when purchasing a property. The amount is typically calculated as a percentage of the purchase price, but depending on the party buying, amounts may vary. If you are buying a second home or a buy-to-let, you will pay a higher rate, adding a 5% surcharge across all bands. For non-UK residents purchasing property in the UK, a 2% is added to all standard SDLT rates.
In property investment, a supply and demand imbalance refers to there being more buyers/renters than the number of available properties. Such imbalances can drive up property prices, rental prices, yields and increase capital appreciation.
When purchasing investment property, the ‘yield’ is the income you earn from the investment, usually shown as a percentage of its price or value. The yield is of particular importance for investors whose goals are regular income, passive cash flow, retirement income or lower-volatility income.
Yield can vary significantly depending on the investment you make. Recent UK finance data showed the average buy-to-let yield is around 7.2%, but leading property markets, such as the North West, can see significantly higher rental returns of 10-12%. Alternative investments, such as PBSA, are also known to consistently outperform the average yield.
When purchasing a UK buy-to-let property, investors must make sure they are aware of the tax implications, as this will affect the profitability of their investment. These include Stamp Duty Land Tax (SDLT), income tax on rental profits, Capital Gains Tax (CGT) when selling, and Corporation Tax if investing through a company. At The Prestbury Advisory, we recommend that, as with all investments and purchases, you consult an independent tax advisor to discuss your tax position.
The ‘best’ place to invest depends largely on your individual financial goals and investment strategy, and we would always encourage our investors to research various options to see which location best matches your goals. The North West, however, presents a broadly reliable choice, as it offers consistently high rental prices and unprecedented capital growth. Learn more about why investing in the North West could be your key to investment success here.
Who manages the property (or properties) post-completion is up to you and how involved you would like to be. For a hands-off investment, we would recommend working with our sister company, Northbank Residential, a lettings and management team that offers a full range of landlord services.
Globally renowned as one of the most reliable and stable investment markets, the UK property market offers investors regular income, the opportunity to leverage their cash, and long-term asset ownership in an established legal and financial market.
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