Beginning UK Property Investment? Here are 10 tips you need to know

What is an Investment Property?

An investment property is the term for any property bought by the purchaser for reasons other than for residential use. The purchaser, which may be an individual or a company, buys a property with a view to making a profit off that property. This profit may be earned by reselling the property, sometimes after renovation. A return on the original investment may be sought by achieving a rental income from the property.

Sometimes the property investor will look to use both methods to achieve a return on their original investment, renting out the property before later selling it for a profit.

How do I get started with UK Property Investment?

The best way to get started in investing in property is to conduct research. Knowledge is key to any successful investment, and with the property market changing all the time it is vital that an investor understands where and how to invest in property in the UK. That’s why PropertyData is such a key tool for any investor. With tools such as yield hotspots, growth zones and construction cost calculators, PropertyData has everything the prospective investor needs.

How much do you need to invest in property in the UK?

Less than you might think. While cash-rich buyers will always be at an advantage, many mortgage lenders offer a range of products for investors, such as buy-to-let mortgages, which are specialised products designed for landlords. Try our helpful Mortgage Finder to quickly assess your options.

Is UK property still a good investment?

While many industries have been hard hit by the current global pandemic, the UK property market has seen a recent increase in transactions.

As our newsroom shows, for example, residential transactions rose by 15.6% in August 2020.

Where can I find the best places for property investment in the UK?

We have developed our Local Data tool to provide investors with detailed, location-specific data to make the best-informed decisions possible.

Our Top 10 Tips for Property Investment UK

1. Residential or commercial?

One of the first things to decide is what sector you want to invest in, commercial or residential property.

The most obvious advantage of commercial property investment is the lower rate of taxation when making the purchase, namely land tax and stamp duty. See our Stamp Duty calculator to work out how this impacts your potential investment.

On the other hand, residential properties have the advantage that mortgages for such properties are easier to get. In addition, it could be argued that they are a safer investment since tenants are usually in plentiful supply, and profits can be more reliable when it comes to resale.

2. Prioritise rental yield

If you invest in buy-to-let properties, the most common form of property investment, it’s important to prioritise the amount of rent the property can be expected to return. While house prices can rise a great deal in a short period of time, they may also fall. By focussing on the amount of rent a property can be expected to generate over a long period of time, an investor can build up a store of capital that can be invested in further properties.

For example, a property that returns a rental income that is greater than interest-only buy-to-let mortgage repayments allows the investor leeway for any unexpected costs, such as maintenance.

3. Consider students

While students may not have the best reputation in wider society, they can be a good source of rental income. One of the advantages of investing in student properties is that student populations tend to be focussed in particular areas of cities near universities, meaning that there is great scope for acquiring multiple properties over time that you can be sure will be in demand by students. The UK student property market has also seen high, consistent growth for more than five years now, meaning it’s a proven area in which to invest.

4. Letting agents

It’s important for anybody investing in property, particularly for individuals rather than investment groups, to decide how much personal involvement they want (or are able) to have with the running of properties they invest in. This may depend upon location, since if your properties are within easy reach of where you live it will be easier to attend to any issues yourself.

Letting agents are advantageous in that they will take the daily running of your properties off your hands, leaving you free to seek further investments. They will collect rent, resolve disputes, and source new tenants, which can be an invaluable service for a busy landlord. Of course, this service comes at a premium, which is usually between 5% and 15% of the rental income. They may also charge an additional fee at the beginning.

5. Expand your search

This is connected to the above tip about letting agents. While it may be tempting to stick to what you already know, you should consider investing in property in any area of the UK that your research tells you is a good opportunity. It may be that for your budget and situation, a property further afield is the right one. Even if that means employing a letting agent to do the localised work for your, or renovating through a company you communicate with remotely, it may turn out to be more profitable than staying local.

Our postcode data map has the vital information on every part of the UK you need to make an informed investment.

6. Don’t fear debt

While it may be intimidating, especially for first-time investors, to contemplate the amount of capital outlay at the beginning, debt is usually an important step in a property investment journey. Investing in property can take a number of years before it begins to show a return, but that doesn’t mean it isn’t an immensely profitable sector.

7. Avoid over-reaching

Following on from the above point, it is important not to try and take on too much, too quickly. Just like a first-time buyer looking for a home it is wise not to buy a house that takes up all their budget and leaves them nothing spare to spend renovating their new home. Investors should beware of the temptation to be greedy. Buying one investment property that is within budget and waiting until there is a store of capital to make a new investment is preferable to taking on too much at the outset.

We have developed a number of useful tools, such as our Build Cost Calculator to help you quickly estimate how much you can safely take on at once.

8. Consider off-plan properties

Investing in an off-plan property means buying a property that has not yet been completed. These will be new-build developments, often over very large sites, which means the level of your investment will be scalable.

One of the advantages of investing in off-plan properties is that the company constructing the properties will often be keen to attract investors and offer a competitive rate. A newer property will also be less likely to require the maintenance and refurbishment work that some older properties will need.

9. Visualise your tenant

Knowing who you would like to sell or rent your property to will be key in guiding a successful investment. For example, you might want to rent to students looking for a house share, or couples looking for their forever home, or small local businesses who want to be part of a thriving community. All of these tenants can impact your investment decisions.

10. Negotiate

This might sound like an obvious point, but you would be surprised how many buyers take a quoted price at face value. Many factors could mean that you are able to negotiate a better deal if you do sufficient research. For example, if a property has been on the market for a long time the buyer is more likely to accept a lower offer to secure a sale.

It’s important to remember that as, for example, a buy-to-let investor, you are not part of an onward chain and accordingly are in a strong position for negotiating.

PropertyData is the best source for UK property investors, and sign up is free. If you have any questions, don't hesitate to get in touch with our team at support@propertydata.co.uk

Sign up to PropertyData for free

How PropertyData can help you

I'm an investor I'm a developer I'm an agent

Limit reached

Sorry, you've reached your monthly search limit. Upgrade your account today for more searches!

Upgrade

Upgrade to download PDFs

There are many places in PropertyData to export data as well-formatted PDF files, including Local Data, Plot Map, Valuations, property reports and more.

Basic


No PDFs

Pro


Download PDFs

Max


Download PDFs


Branded PDFs

Start your free trial now

Transparent data promise

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What are the statistics used?

Averages shown are the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How do you know the square footage of properties?

We use proprietary technology to read the square footage of properties from agent floorplans. Although we cannot determine the square footage for all properties, we can usually get sufficient coverage. Agents are sometimes known to inflate square footage, and this should be borne in mind as a weakness of this data.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property "price paid" data provided by the Land Registry.

How often is the data updated?

Once per month when released by the Land Registry, typically towards the end of each calendar month covering up to the end of the previous calendar month.

What time period does the data cover?

You can customise the time period using the filter at the top of the view. The default time period is up to 9 months back from today's date. The latest data covers the period up to 2022-06-01, although some sales that took place before this date may still be added in the coming months.

How is the raw data processed?

No additional processes are applied to this data.

What are the statistics used?

Averages shown are the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property "price paid" data provided by the Land Registry, and Energy Performance Certificate (EPC) data provided by Ministry of Housing, Communities & Local Government.

How do you know the square footage of properties?

We match the Land Registry data to EPC data provided by the MCHLG. Due to the fact that not all properties sold have had an EPC and vagaries of addressing in the UK, we are not able to determine the square footage of all properties, but we can usually get sufficient coverage.

How often is the data updated?

The private paid data is updated once per month when released by the Land Registry, typically towards the end of each calendar month covering up to the end of the previous calendar month. The energy performance certificate database is updated monthly.

What time period does the data cover?

You can customise the time period using the filter at the top of the view. The default time period is up to 9 months back from today's date. The latest data covers the period up to 2022-06-01, although some sales that took place before this date may still be added in the coming months.

How is the raw data processed?

No additional processes are applied to this data.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Room let listings on SpareRoom, the UK's biggest room letting website.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from SpareRoom, they are soon removed from this tab.

How is the raw data processed?

Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded. Yields are calculated by comparing only properties with the same number of bedrooms, e.g. 3-bedroom properties for rent with 3-bedroom properties for sale.

What is the yield calculation used?

The calculation used is (average_weekly_asking_rent * 52 / average_asking_price), expressed as a percentage. It is a top-line gross yield, meaning no expenses are considered.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The data is updated in near real-time.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from Zoopla, Rightmove or Spareroom, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Yields are calculated by comparing only properties with the same number of bedrooms, e.g. 3-bedroom properties for rent with 3-bedroom properties for sale. For the SpareRoom data, hypothetical properties consisting of two to six average double rooms with shared bathrooms are used to derived average rent. For all sources, listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What is the yield calculation used?

The calculation used is (average_weekly_asking_rent * 52 / average_asking_price), expressed as a percentage. It is a top-line gross yield, meaning no expenses are considered.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property "price paid" data provided by the Land Registry.

How often is the data updated?

Once per month when released by the Land Registry, typically towards the end of each calendar month covering up to the end of the previous calendar month.

Zoopla Zed-index

What time period does the data cover?

The data covers transactions in the last six years

How is the raw data processed?

No additional processes are applied to this data.

What are the statistics used?

The average shown is the interquartile mean, a type of average that is insensitive to outliers while being its own distinct parameter. The 80% range means that 80% of the listed properties fall inside this range.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The listings data is updated in near real-time. The Land Registry data is updated once per month when released, typically towards the end of each calendar month covering up to the end of the previous calendar month.

What time period does the data cover?

The price paid data shown goes back to January 2015. The listings data is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

What are the calculations used?

Average sales per month are for the last 3 finalised months. Turnover is average sales per month divided by total for sale. Inventory is 100 divided by turnover.

Where does the raw data come from?

Property listings seen on rightmove.co.uk, zoopla.co.uk and onthemarket.com.

How often is the data updated?

The listings data is updated in near real-time. The Land Registry data is updated once per month when released, typically towards the end of each calendar month covering up to the end of the previous calendar month.

What time period does the data cover?

This is a real-time market snapshot - the data covers currently listed properties. Once properties are removed from the portal, they are soon removed from this tab.

How is the raw data processed?

Duplicates from multiple sources are matched and reconciled as far as possible. Listings with obvious errors, where price or number or bedrooms appear out of range, are discarded.

Where does the raw data come from?

We receive data on the extent and corporate ownership of all land titles in England & Wales from the Land Registry.

How often is the data updated?

The data is updated once per month when released, typically in the first few days of each calendar month.

What time period does the data cover?

This is an ownership snapshot - the data represents ownership as recorded by the Land Registry at the last monthly export.

How is the raw data processed?

No additional processes are applied to this data.

Where does the raw data come from?

We source different expert forecasts Savills, Knight Frank, OBR

How often is the data updated?

The data is updated annually when new forecasts are released, typically towards the beginning of the year.

How is the raw data processed?

We calculate a consensus forecast using a simple mean average.