Finding the best place to invest in UK property at the moment is no easy task. Property investors need to consider prospects for capital growth, look at the potential for property prices to rise and rents to grow in a particular area.
(PRWEB UK) 18 September 2012
Colordarcy also highlight another positive for buy-to-let investors in September's Rightmove Report which reveals that 60% of tenants expect to be paying higher rents in 12 month’s time with most of those who took part saying they expect rents to rise in London and the South East.
Loxley McKenzie Managing Director of Colordarcy said, “Finding the best place to invest in UK property at the moment is no easy task. Property investors need to consider prospects for capital growth, look at the potential for property prices to rise and rents to grow in a particular area.
The areas where yields are high are not necessarily where investors will find rising property values and often it is more likely to be the other way around in the UK.
Yields can be high where property prices are low simply because the cost of purchasing the property and running costs are higher. This reduces the actual profit from rent.”
According to analysts at Colordarcy, “Buy-to-let investors will make more profit on rent in Northern England but they will generally be making less of a profit on the value of an investment property come exit time. On the other hand they are more likely to see the value of the investment property rise by investing in property in London and the South East.
For portfolio investors too, this creates an interesting conundrum – do they go for a small portfolio of properties in London or spread the risk?
There is no right or wrong answer to this according to Colordarcy, however there are ways for investors to enjoy the best of both worlds when investing in UK property.
The first of these is student property.
According to Knight Frank, average yields on UK student property will increase by 5% this year with rents already increasing by 2.4% this past 12 months.
Combine this with low entry prices on student developments in cities such as Liverpool and investors can enjoy a much better and safer return on investment. Voids on student property are low compared to other buy to let properties.
Hotel rooms, particularly in London are also seen as a low risk way to make a fast return from property. Net yields can be between 7 and 10% in the best locations.
So Colordarcy advise that in the UK, it is not just about location, it is also about the type of property investment. By choosing their investment wisely portfolio investors can spread risk and benefit from having the best of both worlds.
Notes to the editor:
Colordarcy is a leading property investment company that specialises in finding positive cash flow investment properties worldwide. Colordarcy investment property portfolio includes some of the best properties for sale in Brazil, Florida, Turkey and the United Kingdom.
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