The pros and cons of buying property in UK
Over the years, many investors from the US and Asia have moved to the UK in search of lucrative property investment. However, before you spend your money, you must know what to expect. Here are the pros and cons of buying property in the UK.
The benefits of purchasing a property in the UK are:
- long-term returns
- multitude of options
- prices are on the falling curve
- shortage of new houses
- transit in the UK
Real estate trading is the future of business. When buying a property, we all think of it as a long-term investment. Prices always fluctuate, and it is certain that, at one point, they will go up. If you watch the changes in the market, there will be a window of opportunity for you, not only to get your money’s worth back but also to earn some.
Furthermore, it is crucial to upgrade and renovate your property over time. That is a way to ensure you get the expected price once you decide to sell.
A multitude of options
Who says that selling is the only way of making a profit? Once you get your hands on a lucrative property, there are numerous options for you. If you rent it to tenants, you’ll earn some money over time. Furthermore, it is a great way of making sure the mortgage gets paid on time.
Of course, you can use it as a second home. Having a holiday home is a luxury not many people have. While you can still rent it for a few months, when the time comes, you can use it to your benefit and relax with your family.
The falling curve of the prices
The downturn in prices is the perfect moment to silently make a purchase. Once the value of the property goes down, the only other direction it can go is up. It is just a matter of time when your investment will pay off.
Due to the housing shortage in the past year, prices often fluctuate. On one hand, it can make you uncertain whether to invest or not. On the other hand, the demand for housing in the UK is growing rapidly. In conclusion, the government has a plan to build one million new homes in the next two years. Think of the opportunity! With that in mind, for all of you looking for a way to move to the UK, an amazing moving company like smallworldmoving.com can get you there in no time.
Transit in the UK
The railway in the UK is fantastic. It links London, Birmingham, East Midlands, Leeds, and Manchester. This is the second railway in the UK, and by the year 2033, all cities in the country will be connected. This will not only shorten the time to move from one place to another but also increase the opportunity for business. The time has come for the full service moving experience. If you decide to move and invest in a property in the UK, you are securing your place in the future success of the country.
While there are many benefits in purchasing a property in the UK, let’s look at the other side of the investment coin:
- taxes change all the time
- stamp duty
- it is difficult to get a mortgage
- ongoing risk
The change in taxes
The tax relief and the mortgage interest have changed many times in the past decade. A new change is expected to happen by the end of the year 2020, mortgage interest relief is to be reduced to 20%. This will affect the finances of many people, especially if you are a higher-rate taxpayer.
However, if you decide to become a landlord, make sure you have all your grounds covered. Being smart is not only finding the most lucrative property but knowing whether to invest in it or not.
Stamp Duty Tax
Stamp duty is a tax that has to be paid for every purchased property. All buy-to-rent landlords witnessed changes in the last year. Furthermore, there is a surcharge fee of 3% for every property purchase in the UK. And, it is liable for the entire cost of the property.
Make sure to do the math before signing the agreement. There is nothing worse than realizing you don’t have enough money in your wallet to cover all the expenses.
Getting a mortgage
The base rate in the Bank of England is still at 0.5%. But, lenders are double-checking the entire property before deciding to lend the money. Your portfolio has to be sparkling clean if you wish to get enough money to cover the entire purchase.
Know that your request will be turned down if your property doesn’t generate enough money to cover the mortgage payments. Your credit rating and payment history don’t play any part in this decision, no matter how impeccable they are.
When we take into account all the pros and cons of buying property in UK, investing money in real estate is an ongoing risk. No matter how good you think your deal is, it will always be a financial liability. We never know what the future brings, so make sure you have everything covered before you make a purchase. Don’t make a rash decision, but carefully plan the entire process. Nevertheless, it is essential we take some risks from time to time. After all, you can always hire a financial advisor to help you with your decision.