Discounted property is often only associated with UK residential new build and off-plan property. However, ‘resell’ property – which is the type of property normally sold in the open market via estate agents – can also be discounted to the market value. Some vendors (sellers) will accept a discounted price to the market value in order to achieve. Such vendors are hard to find and the discount to the market value must be researched to verify that it does represent a discount.
Experienced buy-to-let property investors eagerly search for discounted and below market value property as upon purchase instant equity is created. This allows investors to withdraw the equity, via a mortgage, to fund another purchase or profit upon its resale at its normal market value. Additionally, discounted property can be rented out at the (higher) normal market value; gaining a higher return on investment.
UK Property Market Conditions
The UK property currently represents one of the best investor’s markets for several years. Rental yields (income) can range from 6% – 10%. Price falls across the general market over the past couple of years have bottomed out with steady prices rises for the past several months. It is important for investors to buy at an early stage of the capital growth cycle to maximise their return.
Banks have provided an investment boost for landlords. Mortgage rates are currently at an historic low, whilst higher mortgage deposits which now required from banks force many would-be buyers to continue to rent. This creates further pressure on existing shortage of rental property in many parts of the UK, creating high rental yields high as renters compete for rental property.
The relatively low rate of the Pound Sterling provides a further incentive for overseas property investors to buy UK property.
How Much Of A Discount Can I Get On UK Property?
The most important aspect when investing in discounted property is not necessarily the size of the discount but whether the discounted price is below the current market value. Research and due diligence are necessary to verify what the current market value in the area and for the type of property is. Additionally, local supply and demand for sales and lettings are critical as this helps determine potential capital growth and rental yield.
Discounted UK Off-Plan Property Investment Advice
Genuinely discounted property is hard to find as vendors rarely wish to sell their property for less than the open market value. Financial circumstances however can often force them to do so.
As noted, it is critical to determine if the discount represents a discount to current prices in the same area for the same type of property and not merely a marketing gimmick.
As a result of our negotiating power, contacts, marketing and experience with vendors; our clients profit from property that is discounted to the market value which a single investor would not be able to achieve. Our clients also benefit from our due diligence process providing them with peace of mind and time savings.
Call us today to speak to one of our property investment advisers who will recommend suitable property to match your financial needs.