Invest in UK buy-to-let property with £1,500 per month.

invest in UK buy-to-let

Do you consider to invest in UK buy-to-let property but you don’t have a deposit saved? Don’t worry, there are alternatives, and you might love this one.

Mortgage providers typically deposits of 30% – lenders want to be confident that monthly rental income adequately offsets mortgage payments, usually with a margin of safety. Unfortunately, for many of those starting out in property investment the 30% deposit requirement is prohibitively high, especially given the rise in housing prices over the past 5 years. There is now a new way to buy UK property without a large upfront deposit.

Investors have the opportunity of buying off-plan, in other words in property that is still under development. Investors pay the 30% deposit over 24 monthly instalments while the construction of the property is taking place. Upon completion, a mortgage can be obtained for the remaining 70%.

For example, a GBP 120,000 apartment can be bought and the 30% deposit of GBP 36,000 is divided into 24 monthly payments of GBP 1,500, allowing you get on the property ladder without a large up-front deposit.

In fact, this is only one of a range of specially devised payment plans available. Each plan is designed to suit both your current financial circumstances and future long term income requirements, meaning you have the convenience of investing at a rate suited to you. At the same time, safely investing your money into an income producing asset which you own and you control.

Added benefits: discounts, rental assurance and property management

In addition to the no-deposit purchase, other major benefits include:

  • 10% Discount to Market Value: Properties on offer are discounted by 10% to market value as proven by sales of local comparable properties. A guarantee is offered. You will not find the same value for money and specification level elsewhere.
  • 5 year Rental Assurance Plan: Properties are available with a 5 year safeguard guaranteeing that the property will be rented, ensuring a successful buy-to-let investment and meaning you never need to worry about rental voids or other unforeseen rental issues.
  • Property Management: Every aspect of your purchase is taken care of, from property selection, management and updates throughout the build period, mortgage arrangement and full rental management.

Invest in UK buy-to-let – is this for me?

These plans are a unique opportunity to purchase prime UK real estate investment properties, and are appropriate for all kinds of investors, but are especially suited for:

  • Investors who have limited lump sum allowances for deposits but who nonetheless would like to grow their buy-to-let portfolio
  • First time buyers who’d otherwise struggle to acquire the level of mortgage deposits that today’s property market requires
  • Investors looking to acquire second properties
  • Over 55’s seeking to keep tax payments low as part of the revised UK pension rules

These property payment plans are so attractive that, on average, 56% of investors go on to purchase a second property within 2 years.

Where to invest in UK buy-to-let property – regional towns and cities

Investors have traditionally focused on the London market. But prime central London has seen property prices increase by 42% over five years to June 2015, according to Knight Frank. The average London property is now priced at GBP 529,675, according to Rightmove, with an average rental yield of only 4%. A chronic lack of supply of new homes matched with continuous population growth is creating a ripple effect from London throughout the rest of the UK. This particularly benefits prices in cities with good commuter links and proximity to business.

Key UK Property growth areas

Below we provide an overview of a few key UK buy-to-let property hotspots. For investors seeking a lower value entry point, key areas to focus on include Birmingham, Manchester and Peterborough, where prices start from GBP 120,000 and yields of 8% can be achieved,  significantly higher than those in London.

Peterborough
A cathedral city with a population of 200,000 thousand and a 50 minute train commute to London, Peterborough is a prime example of a town whose property prices are benefitting from ripple effects from the London market. Prices are more accessible than those in nearby Cambridge, where prices have risen over 40% above pre-crisis levels.

Manchester
As the second largest urban area in the UK, with 2.6 million residents, there are significant reasons to look closely at property development and investment opportunities in so-called ‘London of the North’. With an influx of new companies, including the migration of major BBC radio networks, adding to the growing vibrancy of the city, Manchester is a city with clear ambition for growth. Inner city investment has already occurred with a number of multi-million pound commercial and residential property development projects underway. Prices have been rising at a steady pace in line with UK price growth. With average prices below £150,000, just below pre-crisis peaks, according to Hometrack, it is a market that offers relatively accessible investments for those who believe the rise of the urban lifestyle is here to stay.

Birmingham
With 2.5 million residents in the surrounding counties and over 1 million in the City itself, Birmingham rivals Manchester as the UK’s second largest city. While economic growth in Birmingham flagged for many years, the city is in the midst of a renaissance, with major investment in city infrastructure and in property developments in the city centre. Major companies such as HSBC & Deutsche Bank have moved service centre there, and with its central position and excellent transport links, the city is poised to grow as a service and logistics hub. Furthermore, at an hour and a half by train from London, and the high speed rail HS2 route connecting Birmingham to London in 38 minutes by 2027 it will become increasingly attractive to commuters, especially given that home prices are reasonably accessible for a large city – averaging less than £140 000.

Leeds
With 2.2 million residents in the surrounding counties and over 700 thousand in the city itself, Leeds is the UK’s fourth largest urban area. With average prices below £150,000 and a little under pre-crisis peaks, having risen in line with UK averages, Leeds offers access to urban real-estate at moderate entry prices.

Derby
With a population of over 200,000  in itself, and over 1.5 million in the Derby-Nottingham urban area, Derby is only 30 minutes away from Nottingham, 45 minutes from Birmingham, and 1h30 to 2 hours from Manchester and London, making it a unique central location for accessing many of the UK’s major cities. Home to the Rolls-Royce aero-engine HQ and Britain’s only train manufacturer, it also has a vibrant economy of its own.

Southend on Sea
With a population just under 200,000, and just under an hour by train to the city of London, Southend is a unique coastal commuter town, while London Southend Airport and business service centre also help drive the local economy.


CHRIS LAND, FINANCIAL ADVISOR

Chris has 9 years’ experience as a UK pension specialist and licensed financial advisor. He specialises in helping clients make balanced financial decisions to grow their personal wealth.

Chris is licensed with Globaleye, an award-winning international financial advisory firm established in 1999, with 10 offices and 15,000 clients worldwide.


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