Category: Land | 6Mins

The Ultimate Guide – 3 Ways To Profit From The Property Market In The UK

By Emily Jones on April 14, 2021
land property market guide

Are you thinking of a way to make a profit in the UK property market?

You are not alone. Buying land, property development, or property investment in the UK can be a rewarding and exciting experience.

The opposite can also happen. You can easily fall into pitfalls because of the complexities in the process.

But with proper guidelines and information, you can maximize your investment.

There are three ways to profit from the property market in the UK.

  • Buying Land
  • Property Development
  • Property Investment

Who can buy land in the UK?

All citizens, including international investors, can own land in the UK. However, the challenge comes in the development of land.

Unlike the citizens, international investors face a hurdle when gaining planning permission.

How do I buy land in the UK?

Sourcing land for development is easy, you can either use the internet to start your search either contacting land acquisition consultants or land acquisition companies UK.

Another great way includes sourcing sites using prop-tech software which assists in finding suitable plots.

With the internet, Land acquisition and disposal in the UK has become quick and straightforward. There are many sites listing development land available for sale in the UK.

Apart from the land agents London, you can also check out government-owned land and property available for sale or renting.

And if you prefer to do it the traditional way, you will have to visit the area of interest and do some on-the-ground research.

What type of land can I get in the UK?

In the land acquisition process UK, you will probably encounter two types of land: greenfield and brownfield.

Greenfield:

These are plots of land that have never been developed and are primarily found in rural areas.

They are attractive and cheaper but challenging to obtain planning on as they are likely to be situated within a greenbelt

Brownfield:

These are plots that have been previously developed before and now are disused or dilapidated. Such land will usually cost you more to acquire but have the principle of being previously developed on so offer a higher chance of planning permission being granted.

How much does land cost?

The cost of land in the UK varies, so it’s essential to research the average price in the area you intend to buy.

Location, neighbouring developments, attached planning permission, type of land, and availability of essential services affect the price.

Apart from the land acquisition UK cost, you will be subject to stamp duty land tax, which varies depending on the cost of the site you are looking at.

Planning Permission

Planning permission is another significant consideration in land sourcing and site acquisition. The local government assigns it and determines how the land will be developed. It is imperative to carry out your due diligence and review the site in accordance with the local council’s plan and policies as well as the National Planning Policy Framework (NPPF)

Why Do I Need A Survey And Valuation Report?

Different lands have varying risks, and enlisting land acquisition consultants will help to discover the following;

  • Land measurements and mapping
  • Environmental concerns such as protected or endangered wildlife species
  • Erosion and flooding risks
  • Land composition and condition report for any hazardous contamination

Property Development

Property development is another great way to profit from the property market in the UK.

You can benefit in two ways from property development in London; capital appreciation and income generation.

As a developer, you should aim to identify a property that ticks these boxes, develop it to add value.

Factors Affecting Viability of Property Development

  • Location
  • Proximity to busy roads, railways, and community centres
  • Size of land
  • Availability of local amenities
  • Development of the neighbourhood
  • Planning permission
  • Environmental legislations
  • Accessibility

What is the best strategy to enter the property development market?

There are five ways you can use to enter the property market in the UK;

  • Construct another home or commercial property
  • Buy land for ground-up development
  • Buy and renovate a residential property either for sale or rental
  • Buy commercial property, then convert it into residential
  • Buy land, then apply for planning permission and sell the uplift to a builder or another developer

Funding property development

Perhaps the most crucial step in the property development process is financing. So what is the best option for property development finance?

Personal Savings

If you have significant savings that can enable your project to completion, then the cash in your savings is the best option.

But if you have limited finances, then you may opt for other sources to finance property development.

Re-mortgaging.

This funding option enables investors to leverage on their existing properties with accumulated capital gains. If you have other property with substantial equity, you can use it to finance your project.

However, before you pursue this option, first talk to a professional. Re-mortgage should only be taken after property evaluation and project appraisals.

Development Finance

Institutional lending via banks is a source to raise a large proportion of the required funds as senior debt. Typically lenders will lend a proportion of the purchase price alongside ALL of the build costs in exchange for the first charge on the site. This can then be topped up either by cash funds for the remaining deposit or mezzanine finance which can drastically reduce developer cash input into the deal.

It is worth considering using an experienced property development company who understands property market and the best way to stack the finance for the deal

How is the UK government assisting first-time homeowners?

Entering the property market can be a daunting experience. However, the government’s help-to-buy scheme has partnered with property developers London to enable more people to acquire homes.

The government housing body administering the scheme is working closely with residential property developers London to build affordable and better houses faster.

And Berkshire Corporate – mixed-used property developers – tops the list of the best property developers UK, working closely alongside the government schemes.

The London property development company has over 20 years of proven track record working to produce suitable housing with first-time buyers in mind. Typically, property unit prices sit within the help to buy scheme range of being under £600,000

Why should I invest in UK property investments?

Property prices are on the increase in the UK

Rental prices continue to increase

Under-supply in the market

To earn a regular monthly income

The growing population has led to a rise in the demand for housing where

there is a limited supply on the island.

PROPERTY INVESTMENT

Property investment UK is one of the most popular ways to earn a monthly income from the property market with the added benefit of capital growth over time.

That sounds great!

But how do you choose the best place for your investment? When selecting the location for property investment London, consider local amenities, appearance, and accessibility. Check also for local development plans and the potential for growth or consult a property investment company in London.

How is the value of a property determined?

First, you can estimate the value based on the square footage of the property on sale.

Or you can base it on the cost of the land and building works. It also includes any improvements made to the land by the seller since taking possession.

There is also stamp duty, which is payable on top of the purchase price when buying a home.

The amount depends on the value of the property and is calculated based on the purchase price.

Conclusion

Property development and investments are not a cheap endeavour, even for an experienced investor. It can make or break your portfolio, hence do proper research and planning, and have access to finance to be able to fund and develop the project you have in mind.

Relying on having a capital pot and the right property investment UK company is critical to benefit from the property market.

Housing requirements are ever-present and the requirement will always be there in the UK, where there is a limited amount of land available to develop.

If you are interested in finding out more about how you can take advantage of the property market and the opportunities available to you please contact us now

Finally, have you downloaded our guide to investing in property? Access the free download here

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