How to invest in real estate in the UK in 2020

First things first, you need to really assess and understand the real estate market of the UK before you think of making any investments. Are you interested in buying a to-let property? Is this a short-term investment or a long-term investment? Do you want to buy a new home for you and your family or do you want to buy a fixer-upper that you can sell for a profit? There are so many types of properties that you can invest in as well as so many ways to invest in property – from the Help to Buy scheme to shared equity schemes, and even traditional property auctions. Here are some of the best ways to invest in the UK property market in 2020.

Opt for Buy to Let properties

Traditionally, a buy to let investment is when an investor buys a property in order to lease it out. Usually, most people prefer to buy apartments over houses as the demand for rental apartments is usually higher. Such an investment is very lucrative because of the return on investment – you will get attractive rentals and monthly returns. Buying real estate in neighbourhoods that are close to colleges and universities is especially lucrative because there is a constant demand for housing in these areas.

Attend traditional auctions

In a traditional auction, a potential buyer needs to pay 10 per cent of the total purchase price as the downpayment. One of the biggest benefits of a property auction is that you might be able to get a very good deal – usually, houses that are sold at an auction are valued lower than the market value, and if there are no other bidders, this property can be bought for a very reasonable price. As long as you do your research, you’re fully aware of the terms and conditions and you place a bid according to your budget,  property auction is a great way to invest in property. However, you should keep in mind that you might need to attend quite a few auctions before you find the perfect property, so be patient. 

Use the Help to Buy scheme

Under the Help to Buy scheme, first-time buyers only need to put down 5 per cent of the total value as the downpayment. They can also borrow up to 20 per cent of the total value of the property, as long as it is not more than £600,000, which will be interest-free for the first 5 years. First-time buyers who live in London can get a loan of up to 40 per cent of the total purchase price. Using this scheme, you don’t need to save too much money as the initial downpayment, and you even get to borrow money without paying a high level of interest. For a first time buyer, this is one of the most financially economical and beneficial ways of investing in property.

Hire a real estate agent

One of the easiest ways to invest in property in the UK is by hiring a real estate agent. You need to tell your agent exactly what you are looking for – your requirements, your budget, the kind of house you want, the number of rooms, the neighbourhood etc. Your agent will then shortlist a few places which he or she thinks you might like. After that, all you need to do is attend open houses until you find the perfect property. Visit the property a few times, make sure everything is as per your requirements, negotiate a good deal, sign the contract and make the downpayment.

Consider flipping properties

Think of this as a fixer-upper investment. Basically, you invest in an under-priced house that needs a little bit of work and a few repairs. After giving this property a makeover, you put it on the market for a higher price. The difference between the original buying price and the final selling price is your profit. However, since this is a short-term investment, you need to be very smart about what property you invest in. If the fixer-upper is sitting on the market for too long, or if you end up spending too much money on damages and repairs, then the profits will be much lower.

Do some research online

Various properties are up for sale online. You just need to do your research, find the right property that meets your requirements and then visit this property for a physical check. Be sure to hire a valuator who can advise you about the right market value of the property. After that, you should opt for a house inspection to make sure that there is no fundamental damage to the property. The seller will be more than happy to quote a lower price, since the seller will not have to pay any commission to a real estate agent.

Conclusion

Invest in real estate based on your budget, your needs and your long-term requirements. Study the market, understand the real estate trends, do your research and then make an investment.

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