"OLD" houses Vs "New Build"

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Why Invest in Property?

The property business is a financially rewarding and exciting business. It can produce a consistent income, even once you have retired. Historically, property has doubled in value every seven years. No wonder property investment is now seen as the best way to provide long term financial security.

An Alternative to Pension

For the last 10 years, property investment has outperformed and showed none of the risk associated with traditional investment vehicles. In recent years we have seen stock market prices fall and pension funds obliterated. In comparison, property has continued to rise in value. Many people have invested in property as an alternative to a pension.

Shortage of Housing in the UK

  • The UK has a serious shortage of housing caused by a number of social and demographic factors.
  • Unlike other European countries, our population is expanding significantly and it is predicted to reach 62.7 million by 2016 compared to 58.8 million in 1996.
  • The number of people living by themselves is increasing. Government figures show that by 2010 up to 40% of UK households will be occupied by single people.
  • This means that the demand for property is increasing therefore driving up the price of property in the long term.
  • According to the Office of National Statistics there will be an annual shortfall of housing in the UK of over 100,000 properties each year for the next decade. This could mean a 1 million housing shortfall by 2020 if current trends continue.

Why Old/ established property.

  • Higher yield. Generally speaking, the equivalent rent that can be acheived on a pound for pound basis is higher on established property than new build therefore the overall yield can be better with established property.
  • Many of our deals have existing tenants in place, so ongoing maintenance programmes can be implemented without a large capital outlay on day one.
  • Aged property will normally have gone through a "settlement" period (if a property is going to subside, it is usually in the early years). There is potential with new builds that as the property settles, many problems can come to light which, whilst being covered by a NHBC guarantee, causes inconvenience for you as the investor and the tenant.
  • The discount is more realistic as there will be a history of open market transactions taking place over a period of time therefore comparable data for the area is more reliable. With new build prices, you are never 100% sure that the discount is genuine and not just a discount from an overinflated price from the developer.
  • Not everyone wants to live in a brand new, modern building. As such, when selling a new build property on the competition can be higher as the consumer is presented with many similar properties within the same development. Older properties are more individual and will have been changed and modified over the years.