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Throughout the pandemic, we saw the ever-changing priorities of home buyers as they searched for more space. The entire UK population was confined indoors to minimise the spread of the coronavirus. Therefore, as people spent more time at home, they started to reconsider their home requirements, analysing what they require from a space. For instance, the rise of homeworking led to many people needing a spare room to convert to a home office. People also started searching for homes with more outdoor space. Research shows that more buyers are looking for homes with access to open spaces such as woodlands and parks.
The location and surrounding areas are just as important as the development itself. Whilst looking at the location of the property, it is also important to consider the local amenities in the area. High-quality amenities and easy access to transport links, parks, offices, and supermarkets, will attract a larger pool of potential tenants and residents. Working professionals will often want to live close to their places of work. Alternatively, those with younger families will want to live closer to schools and healthcare. Therefore, choosing the perfect location all comes down to personal requirements.
Other than the amenities available, one must consider the property market in the local area and overall region. Some property markets are much more affordable and demonstrate a more robust market growth. Many investors choose to purchase in city centres such as Manchester and Sheffield. Namely because of significant rental demand and high rental yields in the area.
To illustrate, the average house price in the UK has now peaked at £274,000. According to Rightmove, you can purchase a property in Sheffield for £130,480 on average, below the UK average. However, a more affordable market should not frighten you because inexpensive doesn’t necessarily mean unprofitable. Prices in Sheffield are forecasted to grow by 10% this year. Over the past year, prices in the city have increased by 25%. Therefore, buyers can secure profitable purchases with much smaller budgets.
Investors with a short-term financial goal should focus on the rental potential of a property. Those looking to generate quick income from higher rents should look at areas with rising rental demand. The rents you can set and realistically achieve, depend on a few factors.
Rental yields are influenced by the property price, location, and rental demand, in the local market. Rental demand in university cities is generally higher, as there is a growing student scene. The more students there are, the higher the demand for accommodation. Furthermore, some student cities hold higher graduate retention rates. Therefore, as more people look to reside in the city, demand for housing will grow naturally. Consequently, boosting rental prices, mitigating the risk of vacant properties, and ensuring a continuous cash flow for landlords.
Investors with long-term property goals will generally explore the growth potential in the surrounding area by evaluating regeneration schemes underway. Regeneration projects focus on revamping and transforming the cityscape by improving existing amenities and developing new areas. Regeneration schemes can include creating pedestrianised zones, large community spaces to host events and festivals, green spaces, new shopping districts and so much more. Indeed, these factors will contribute to a booming economy as more businesses are attracted to the area, thus, creating more jobs. Ultimately, this will increase the potential capital appreciation in the area, as the desirability of the city increases.
If you purchase a development off-plan, near a regeneration zone where the area has just started to be revamped, then upon completion, the property will increase in price. Hence, generating instant equity. Of course, this is beneficial if you plan to sell your development as soon as it is complete.
A lucrative investment stems from a development located in a well-connected area. An excellent transport network will welcome more commuters, increasing rental demand in the area. Above all, properties near train stations, bus stops and airports are more desirable to tenants. As a result, locals can commute to workplaces more conveniently.
The long-awaited HS2 line is currently the most significant transport development across the UK. The new line aims to provide efficient services and reduce travel times between cities. Therefore, people working in the Capital can rent homes at a lower price outside the city and still commute to work.
All our developments, especially those off-plan, have been carefully selected based on their overall reputability, security, location, price and potential returns. Each investment and developer we work with undergoes complete due diligence. We take a look at the previous work of developers to ensure developments are completed to a high standard. Our clients are at ease knowing we only work with reputable developers delivering high-quality and energy-efficient properties in prime investment locations. Why not speak to one of our consultants today to secure your next investment, off-plan?
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