Cheaper Mortgage and Competitive Asking Rates Can Get Profitable Deals In UK
08 Feb 2019
Low-interest rates on a mortgage for first-time buyers can provide an opportunity to gain profitable deals in the current buyers' market. In addition, if suitably invested, the monthly mortgage repayment can be lower than the monthly rent.
The average interest rate on two years fixed mortgage is around 2.5 per cent, and the average interest on 5- a year fixed mortgage is up to 2.91 per cent. First-time buyers can invest through supporting government schemes such as help-to-buy loans, lifetime Isas, help-to-buy Isas etc. Brexit or no Brexit, in both conditions, first-time buyers can gain from buying property at a lower asking price.
Comparing House Price in Capital to Other Areas
The ONS and Land registry data find the average price of homes in London grew 80 per cent in a decade from £266,999 to £473,609(Oct 2008 to Oct 2018), while the price in North East grew 3.2 per cent from £124,448 to £128,488.
Annual transactions in London fell significantly in the last year to 3703 in some of the prime central locations. Unrestrained growth in house prices has been a reason for the decline in the capital city, while many other regions continue to report growth.
Brexit is one of the key factors where economic uncertainty led to the decline in national growth from 8.2 per cent to 2.7 per cent. The capital city also faces an affordability issue where the average house price is 16 times more than the average salary.
Land registry data show average London house cost is close to £650,000, whereas the new build homes are 15 to 20 per cent higher than the market values.
Investors From China and America Acquiring Properties in The North
Several foreign investors are seeking alternative regions to invest in UK property over the decline in growth in the capital city, shortage, and unaffordability.
Proptech firm Datscha states that in the last year to November, around £361 million was invested in UK property by overseas buyers, including £156 million from US buyers. In 2017, American buyers had invested only £15 million in UK property.
The interest of Chinese buyers in Manchester property grew 200 per cent last year due to the direct flight connectivity to Beijing and Hong Kong. Similar inclinations of Indian buyers were seen in the North West of England.
A Chicago-based real estate firm invested in 200 apartment schemes in the Baltic triangle and Manchester.
Baring bought into 240 flat development projects in Liverpool, and several other regeneration developments are happening close to Liverpool waters and waterfronts.
There has been a growth in the private rented sector where Knight Frank claims £75 billion investments will be made in PRS, where over 56 per cent will be made outside London. Currently, the companies are investing 44 per cent outside London in purpose-built PRS projects focusing on apartments with amenities supported by proper transportation connectivity and proximity to shops, offices, schools etc.
To know more about UK properties, click Hamilton International Estates.
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