Why Invest In Property In The UK?

If you haven't bought a UK investment property yet, or maybe you have but you wonder if you've done the right thing, then this information is for you.

We separate the considerations for buying UK investment property into three areas:

Why invest in the UK at all?
If you are going to invest in the UK, why do it NOW?
Why invest in the UK compared to other countries?

On this page we will deal with the first point above - why the UK is a great choice for astute property investors.

We deal with the comparison between UK and USA investing here.

To understand why now is a perfect time for UK property investment, this page has the background.

Finally, if you're not sure that property investment is right for you, then read our fundamental analysis of the benefits of property investment.

The benefits of investment in UK property...

There are many benefits, of which we believe these ten are the most important:

Massive shortage of property long-term
Mature financial system and availability of property finance
Proven growth over 50+ years
Knowledge and understanding of the market
Stable first world country
Established legal system with secure laws
Large base of property to work with
Wealthy population
Lots of information available
Low Risk And Good Rewards

Let's look at them more closely.

Reason One: Massive imbalance between insufficient supply and excess demand

The long term history of the UK is a massive shortage of supply which is getting worse. Households are estimated by the Government (2009 Housing Statistics) to grow from 22m households in 2011 to 27m in 2031 - just 20 years later. That's an additional 250,000 units a year required, on top of the replacement units for the 44% of our housing stock that is older than the second world war!

Since the UK construction industry has never, in recent years, managed to build more than 150,000 units a year it doesn't take a genius to see that demand will continue to outstrip supply for at least the next generation!

Reason Two: Mature financial system and availability of property finance

Despite the credit crunch the banks are back lending to buy to let investors. Our financial system is well established and most investors can still borrow 65% to 75% of the cost of a property.

With Axis assisted finance product, qualifying investors can frequently borrow 100% of the cost price, creating a Low or No Money Down deal!

The ability to leverage your money is probably the greatest advantage of investing in property. The UK makes that extremely easy compared to almost all other world markets.

Reason Three: Proven growth over 50+ years

Because of the shortage of property for the increasing population the property market in the UK has been growing, and growing, and growing. Not just for a few years, but with some minor reverses for more than 50 years! This trend is, in our view, unlikely to vary over the long term and provides a background of stability for UK investors.

Reason Four: Knowledge and understanding of the market

We live here. All of us have a great deal of knowledge and understand of the property market. Of course if you read the newspapers and listen to TV as your source of knowledge you'll be sadly misguided about the whole investment scenario. However, you speak the language, know how the business of buying and selling property happens, can easily acquire the knowledge of more.

All in all, it's easier - and therefore less risky - to invest in a country you know and understand, than in one that you don't.

Reason Five: Stable first world country

It really matters that we are a stable democracy. You are buying property for the long term - say 10-20 years. We don't want riots, breakdown of civil order, overthrow of the Government, military taking over the country or any of the other challenges that emerging and third world economies can suffer from. Stability of the country leads to relative stability of investment. We think that's a good thing.

Reason Six: Established legal system with secure laws

Following on from the previous point, our legal system and our processes for purchasing property provide a lot of protection to ensure things go right. And our insurance system provides further protections. The land registry is fully computerised and genuinely accurate data is held going back, in many cases, hundreds of years.

All in all our legal system, despite it's flaws, works well and protects property owners and landlords to a signficant extent from any major risks.

Reason Seven: Large base of property to work with

It matters that we have 22m housing units in the UK. The encompass everything from mansions and palaces to starter studios for first time buyers. This enormous base provides something for everyone at every price level. And it ensures that the pricing system isn't perfect, which means that opportunities for profit open up all the time.

The enormous base of property also ensures that the market (with a few exceptions) is pretty liquid. Most properties can be purchased or sold, providing the price is right, relatively quickly. Contrast this with a Caribbean island with few properties for sale where you could wait 2 years or more for a buyer!

Reason Eight: Wealthy population

If you have had a hard time or earn the national average wage or less, then you could be forgiven for disagreeing with this headline. But the reality is that the UK ranks 5th in the world in terms of average income per capita, which does make us a pretty wealthy place. This reflects in about 65% of family units owning their own home and a continuing aspiration both to buy property and/or to live in 'nice' rented property.

What the wealth in the population really means is that there are plenty of people who can afford decent accommodation, which drives the prices for rents - critical to your success as a landlord!

Reason Nine: Lots of information available

Because of the maturity and first world nature of our country, we have an enormous amount of information at our fingertips. Government statistics, newspapers, independent research bodies, local councils, property websites and more. We can find out an enormous amount about a particular area, or a particular property, from our own desk at home. And if we start talking to property sales agents and letting agents, we can supplement that with actual experience on the ground.

This level of information is matched by few other countries, and we don't have a language problem either! This makes it easy to compare and evaluate an investment opportunity, which in turn reduces the risk and enables the potential reward to be ascertained with reasonable accuracy.

Reason Ten: Low Risk And Good Rewards

If you take all our discussion points above, we hope that you come to just one, very clear, conclusion. The UK offers a great balance between low risk and reasonable rewards. In fact using Axis techniques our client anticipate low risk and high rewards - an unbeatable combination.

Compared to most other countries the UK remains a strong contender for the best property investment destination for most investors. At the very least, we consider that the UK should be the bedrock of all UK investors portfolio's - and for many investors with limited resources should be all they every commit their resources to.