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Property owners choosing to stay put

Published on 5th May 2017 - Last update on 13th January 2020

According to the National Association of Estate Agents (NAEA), there has been a decline in the number of properties being sold. If the report is to be believed, there are currently 28% fewer properties up for sale indicating that property owners are either choosing to stay put or delay sales. For entrepreneurs hoping to tap into the property market and explore the potential lying within, this can be problematic.

Property Market Woes

On average, many UK estate agents have seen on average around 50 fewer properties up for sale. Plus, there is a dip in the number of house hunters registering. Although this may sound disconcerting, property still remains a lucrative market for investors and landlords. By choosing to stay put or delay sales, property owners are, in fact, merely seeking to retain assets in the face of economic uncertainty.

The morning after the 23rd June referendum vote, the UK saw a weakening of the British pound. Consequently, overseas investors saw Brexit as an opportunity and sought to further invest in the UK property market. For investors, both domestic and abroad, property is an excellent means of spending money in exchange for much larger returns over time. Subsequently, the brief downturn posed an opportunity that many wouldn’t dare dismiss.

“There are currently ten house-hunters chasing each available property” according to Mark Hayward, chief executive at the NAEA Propertymark. “With supply at the lowest level for March since records began, building more homes to satisfy demand needs to be a priority. In line with this, while sales to first-time buyers rose slightly in March, they’re still much lower than the levels seen in the last three months of 2016 which is cause for concern.”

As well as the usual interest coming from Middle Eastern and Far East investors, Brexit also managed to piqué the interest of U.S. investors too. However, with the pound quickly stabilising thanks to the measure put into place by the Bank Of England it wasn’t to last. Feeling that the pound still hadn’t fallen enough and deeming the UK to be far too expensive, many potential U.S. investors chose to hang onto their money instead, thus explaining the NAEA’s findings.

Growing Demand For Housing

Although many estate agents have been left disheartened by the missed opportunities posed by U.S. investors, this isn’t at all a critical blow to the UK economy. Far from it. Since the vote, manufacturing and construction have grown and continue to do so. In fact, the demand for housing in the UK is at an all-time high with the UK Government struggling to erect enough houses to satisfy demand. But for those with a willingness to invest, this comes as a double edged sword.

Entrepreneurial-minded individuals will no doubt see the potential that comes from being part of the UK rental market. By purchasing a single property, or even an entire string of properties in various locations, investments can be highly beneficial and profitable for a number of reasons. As well as the money earned as each property grows in value, you could also acquire a reliable monthly or annual stream of revenue by renting them out as either single-lets or as HMOs.

  • Single-let: A single let is a property rented out to a single house. A household can comprise of an individual, a married couple, partners, a family or foster children and parental guardians. The household will have access to all areas and be able to use it as if were their own, within reason.
  • HMO: A HMO or house in multiple occupation can be used to maximise the rental potential of the property involved. Typically, a HMO is a property let to 3 or more households and contain at least 3 individuals. Each household is restricted to their own living space and must share communal spaces such as either toilet or kitchen facilities.

On the one hand, UK properties continue to be an expensive asset to acquire. In spite of the NAEA’s findings, demand is still high. But with such intense competition for even the most basic of properties, the figure you can expect to pay is certain to grow heftier the longer you wait. Couple that with the amount you’ll need to set aside for refurbishments and furnishings and the potential costs can be staggering.

Yet, if you’re an entrepreneur or a property developer hoping to invest in your next business project, help is at hand. The Access To Finance professionals at Rangewell can help grant you access to a broad range of alternative business finance products to suit your exact needs, including fully customisable business loans.

Business Loans

If you’re considering a business loan there are two types to be aware of: Secured and Unsecured. To apply, lenders must be able to review aspects such as your credit history and credit score.

With an unsecured loan, you could acquire a lump sum of between £5,000 to £250,000, all without the need to lay down assets as security. However, if you need to get hold of a larger sum you could offer potential lenders a personal guarantee.

Meanwhile, with a secured loan you can bestow upon your business a lump sum starting from £5,000 up to as much as £1,000,000. With this type of loan, you are required to put forward assets as security. Should your business become unable to keep up with the monthly repayment scheme, or fail to pay entirely, lenders can claim these assets to recoup costs.

Why Rangewell?

Our values are simple – We’re on your side. Our services are clear and transparent. We support a wide range of SME businesses of every shape and size, for finding every type of finance. Follow us on Twitter and LinkedIn for business tips and tricks, and feel free to call us on 0203 637 2340 if you’d like to chat about what we can do for you.

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