Fri, 21 Oct 11
Much has been reported in the press recently about the flight to safe havens for investments with bricks and mortar extremely high on many savvy investor lists. With a booming lettings market in the UK, the residential sector is once again attracting investors’ cash.
This is particularly prominent with foreign investors who see the UK’s AAA credit rating as being especially attractive and the UK Government’s policies seen as more robust and safer in the long term than many other developed economies.
James Wyatt, Partner of Surrey based letting agents, Barton Wyatt, comments:
'As we see the lettings market continuing to expand in the Home Counties the demand for more family sized properties is rapidly increasing. The UK is a safe place to invest and with the continuing uncertainty in global stock markets, bricks and mortar are seen as a simple and reassuring investment'.
However, as with all investments, detailed knowledge of the market you are investing in is essential. The lettings market in the so called ’golden commuter belt’ to the West of London in areas such as Virginia Water, Wentworth, Sunningdale, Weybridge, Esher and Cobham are unusual in that they offer expensive and good quality housing in attractive areas which are serviced by several international schools including The American Community School (ACS) in Egham and Cobham, TASIS in Thorpe and ISL in Woking.
This environment has led to demand for lettings properties being skewed very much in favour of four and five bedroom family houses. Typically in London and most cities around the country, it is one or two bedroom flats that are the main stay of the lettings market but in these ’international’ areas, it is definitely family homes which are in very short supply.
Wyatt suggests that the best price range to invest in is between £600,000 and £2,000,000 per property where returns of about 5-6% gross are achievable. This income return together with extremely good prospects for capital growth, make Buy-to-Let homes a very attractive proposition. And for overseas investors, these properties can be sold free of any capital gains tax making them even more desirable.
So forget about flats - here are some facts that Houses are the best Buy-to-Let bet:
- Fact: houses offer better returns.
- Fact: flats have a double management charge - one for your letting agent and another for the block management.
- Fact: flats have longer voids and shorter lets.
- Fact: flats have more neighbour issues, particularly over noise.
- Fact: flats are leasehold, houses are generally freehold - a preferred form of investment
- Fact: flats often have onerous covenants reducing the number of possible Tenants. For instance, pets are often not allowed.
'And to make a house even more attractive - they are all let unfurnished with very few exceptions (in our portfolio, just 1-2% of family sized houses are furnished). As opposed to flats where 50% are furnished, often giving rise to landlord confusion about whether to furnish or not. You can always guarantee to be wrong whichever way you turn! Needless to say that the inventory cost on an empty house will be cheaper than a property packed full of daily living necessities.'
Sally Batchelor, who currently resides with her family in France but owns a Buy-to-Let property in Virginia Water, Surrey, had this to say:
'I was recommended to buy an investment property by Barton Wyatt several years ago. I bought a 4 bedroom, 3 bathroom family home on a gated development in Virginia Water. The sales team at Barton Wyatt recommended this area as highly desirable for expats with its security guards and shared amenities such as pool and gym.
'To be honest I have never looked back to the point that I have just purchased another similar property from Barton Wyatt. Their lettings team is second to none and I am completely looked after professionally as are my tenants.
'It is the perfect answer for my investment portfolio and having long company lets gives me complete peace of mind while I get on with my life in France'
For further information on Barton Wyatt please call 01344 843000 or visit:
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