Looking to make your first property investment?
We’re here to help you get started. Meet Maria.
As a first time investor, Maria has had her fair share of highlights and challenges during her initial property investment.
We speak to her about what kickstarted her investment, how she went about choosing the perfect development and what life has been like since she exchanged.
With the goal of creating a property portfolio, Maria has a wealth of experience that she’s ready to share.
Nearly 40% of people have not invested for later life. Now is the best time for you to get ahead of the curve.
Is Now a Good Time to Invest in UK Property?
Given the circumstances impacting the UK property market over the last few years, this is a fair question. It’s true that external factors such as Brexit and COVID-19 have created uncertainty, but UK property remains a robust asset with a history of providing returns.
The major factor affecting the UK is undersupply. Supply and demand is the lifeblood of the market and right now, demand is vastly outstripping supply.
This is creating an incredibly competitive market – especially in regional areas where affordability is already generating interest from both renters and investors.
Alongside low interest rates, a range of mortgage products and the stamp duty holiday, this has created a fantastic environment for first time investment.
Want to know more about why you should invest in the UK? We’ve got 19 reasons right here.
Stamp Duty Holiday Is Ideal for First Time Investors
With the chancellor announcing a temporary holiday on Stamp Duty Land Tax (SDLT) for the first £500,000 of property sales, there’s never been a better time for investors to consider UK property – at least until 31 March 2021.
Those buying Buy-to-Let properties usually have to pay an extra 3% in Stamp Duty on top of base rates for each band.
Under the new rules, investors now only pay 3% on any purchase up to £500,000 with no base rate.
This can mean incredible savings, especially for those investing from overseas where affordability is increased through foreign exchange.
Frequently Asked Questions from First Time Investors
What is risk tolerance and how do I figure out my risk tolerance?
Simply put, risk tolerance is how much risk you’re willing to take on in your investments. There’s no hard and fast rule to work out your tolerance but essentially, if you’re having sleepless nights at the thought of a downturn, you’re probably taking too much of a risk.
Always work with a financial advisor to determine how much risk you’re able to take on and how you should structure your assets.
Can I get a Buy-to-Let Mortgage when I’m retired?
As BTL mortgage payments are usually covered by the rental income rather than a work income or pension it is possible to get a mortgage in retirement. Lenders will certainly vary. For example, will not allow a mortgage to run past 70. A 60-year old, however, could still take out a 10-year mortgage and clear the debt by selling the property.
How do I choose where to invest?
Location is a vital part of any property investment and should be a major priority during your research. Ideally, you want to find a location that is ‘up-and-coming’ or currently delivering results. Research the performance of similar investments in the area and check market forecasts.
You may also look for areas undergoing regeneration as this typically drives demand. Consider nearby amenities such as transport links, restaurants or schools as these are things tenants want.
How do I build a property portfolio?
The most important thing to remember is everyone starts somewhere. Invest in a single good property and then scale based on your results. There are various strategies for building a portfolio (such as the Five Year Plan) but generally, you want to maintain a positive cashflow and re-invest wherever possible.
Always work with trusted partners to ensure that you have the means and the planning in place before you consider scaling your investments.
What is investment diversification and why is it important?
You’ve no doubt heard the term ‘putting all of your eggs in one basket’. This is why we diversify. Having a range of different investments in different places is a great way of mitigating risk, ensuring a downturn doesn’t put you in a spot you can’t recover from.
It also allows you to mix and match various risk and yield levels, allowing you to be more flexible in where you reinvest.