What we do: Investment Property UK

How to get into property

Before making an enquiry to a property, have you considered whether you want to buy a property or explore the other ways you can invest in property?

1. Buying a Property
2. Buy shares in a listed property company
3. Buy shares in a REIT
4. Crowdfunding
5. Peer to Peer Lending

There are a number of ways to access the UK property market. We will briefly explain how to invest in UK property and outline some of the advantages and disadvantages of each:

Buying a property

There is an age old saying that an Englishman’s home is his castle. Meaning that a person has control of what happens in their own home. Many people prefer to buy the actual property, the brick and mortar (as some people say) for the sense of security that they feel from owning the legal title.

Having been active in the property industry for more than 11 years and working with a lot of overseas investors from Hong Kong, Middle East, South Africa, Israel and Russia, we are absolutely aware that investors don’t just buy property for the investment returns. They like the idea of having a foothold in another country and having something tangible, like property.

If you are looking to find out more about the UK property purchase process or the differences between the freehold and leasehold ownership, our property investments guides will help empower you with the knowledge you seek.

One can find suitable investment properties via online auctions, property portals, estate agents - like One Touch.

Buying shares in a listed property company

The typical available on our website requires a minimum investment of £60,000. If you don’t have that sort of budget, then purchasing shares in a listed property company may be a the way to access the property market with less capital. The London Stock Exchange has over 50 listed property companies and REITS. Just like when choosing a property, you would have to conduct your due diligence on the sector and the specific company.

It is easy to get it wrong, as there are lots of changes that can take place. For instance, a change in trends has resulted in a significant downturn in the fortunes of retail investment companies. Shopping centre owner, INTU has gone into administration. If you owned shares in that company you would probably have lost all your capital. Whereas - when you own a buy to let property - even if the market demand goes down, you still receive the rental income and with all-time low interest rates, you will certainly be able to maintain the mortgage payments. Buying shares in property companies which focus on healthcare have been more resilient. One such company is Primary Healthcare Properties (PHP). It pays a dividend of nearly 4% from leasing doctors surgeries to the government.

UK investors buy shares via online investment platforms like AJ Bell or Hargreaves Lansdown can benefit from tax savings when they invest through their ISA or SIPP. Overseas investors can also set up International Trading Accounts but some of the overseas platforms only have a limited selection of shares to invest in.

Buying shares in REIT

A REIT is an abbreviation of Real Estate Investment Trust. Shares can be purchased.

More Risky Property Investment Options Include:

Crowdfunding

Generally you would provide equity towards a development for a share in the profits. The risk profile makes it only suitable for sophisticated or high net worth investors. The higher risk means you could also achieve higher returns; if the developments works out as expected you could achieve between 11% and 18% returns. However, you could also potentially lose all your capital invested because you would sit behind the creditors if the developer went bust.

Peer-to-peer lending

Is slightly less risky than crowdfunding in most instances because provide the loan to a developer and take a first charge on the property. That way, they have access to the assets in the underlying property. With the lower risks come returns between 4% and 6% per annum.

You can invest as little as £100 into Peer-to-peer lending platforms. With peer-to-peer lending, you would earn interest on the loan and the capital is repaid upon completion of their project.

The main difference between crowdfunding and peer-to-peer lending is that with crowdfunding you own the equity (the property), and with peer-to-peer lending you are loaning money, so you own the debt.

Conclusion

Property is a non-liquid asset and during tough times you may not be able to sell your shares or you property. However, there is a good steady income on offer and some capital growth opportunities that will provide handsome returns for medium to long term investors.

Do you like the sound of the traditional route and the simplicity of – the bricks and mortar? This is where One Touch can help you with your property search to find more property investment opportunities in the UK. Helping to find the best property to match your investment and lifestyle goals.

Investing in UK property pros and cons

There are many reasons why people choose to invest in the UK property market. It has proven resilient over the years, and prices have bounced back despite economic troubles or pandemics. The demand for property still outweighs supply by a hefty margin, and failure to build enough housing has meant that house prices continue to rise. You can be confident that the value of your property will rise if you retain it in the long-term.

Another benefit of buying property in the UK is that there are lots of options open to you. You can rent a property as an HMO, a single family let or as a serviced apartment. Alternatively, you could consider the commercial property market and invest in care homes or student property.

Whilst property in the UK is mainly seen as a positive asset, there are some drawbacks. Taxes levied on investors such as stamp duty and capital gains tax, might affect the overall profitability of the investment. Also, mortgage interest relief, which previously allowed investors to deduct mortgage payments from their overall income tax bill, has been phased out.

It can also be difficult to obtain a mortgage for a buy-to-let property, and you may need a larger deposit. Additionally, most mortgage lenders do not issue mortgages for commercial assets such as student property and care homes and so investors will need the cash sum for these.

Despite the drawbacks, investor interest in property is still high and there is a reason for it. Kept as a long-term investment, the possibility for good levels of capital growth is high. If you're interested in investing, why not read our best places to invest in UK property guide?