- London’s house price slump continues with growth rate of just 1.9% (Hometrack)
- Haircuts of 15-20% common across the Home Counties (Properties of the World)
- Off-plan properties once again pique investors’ interest (Properties of the World)
Whilst the financial crash a decade ago saw investor appetite for off-plan properties fall as concerns over the financial ability of some developers to complete, now experts are seeing investor interest once again in off-plan properties in light of stalling house prices and impeded rental yields.
Whether it’s ‘because of Brexit’ or not, the stalling of UK house prices over the past 12 months has not only been well-documented in the media but also physically felt across the nation.
Those peering through estate agents’ windows in London will see reductions of between 5-10% whilst anyone residing in the Home Counties, unfortunate enough to have their home valued of late, will be reeling from sweeping haircuts of between 15-20%.
Property buyers can no longer rely on never-ending upward house price trajectories thus savvy investors are looking to other methods of securing capital gains such as buying off-plan. With off-plan units traditionally cheaper than completed stock, up to 20% in some cases, investors are more willing to accept the risks of buying off-plan in return for such an attractive and swiftly realised capital return.
And with recent tax changes impeding the returns available, buy-to-let landlords too are increasingly looking to off-plan properties, especially those nearing completion, for their next purchase.
“Buy off-plan to beat stalling house prices and falling rental yields is what I say when clients ask me what they should do.
“With the imposed tax changes, every penny counts for today’s landlords so purchasing a brand new, modern buy-to-let property which requires no refurbishment and thus additional expenditure or void period whilst works are being done, is highly appealing.
“90% of our sales for UK residential buy-to-let are for off-plan properties with northern cities, especially Manchester, in high demand due to their lower entry prices and strong rental market.“
Jean Liggett, CEO Properties of the World
Manchester Waters, is currently the largest off-plan development that Properties of the World is offering investors. Comprised of 500 apartments ranging from studios to 3 beds, the award-winning development presents units available from just £109,995, with a 6% return for investors and house price growth rates of 7.3% recorded for Manchester, the fastest in the UK (Hometrack).
With excellent views of the Manchester Ship Canal, private residents’ gym and cinema room and being located just 10 minutes from the city centre, demand for these apartments, due to be completed Q4 2019, is high. Over 85% of units have already been sold off-plan since launch in July 2017.