Due to the current shortfall in housing, demand has increased for off- plan development. This has also become a more popular strategy for investors as it is seen as a way to purchase property at a discounted price ahead of price rise on completion, essentially giving investors instant equity in the property once completed.
Recent figures and projections show that the government may fall short of target with as many as 318,000 new homes lost over the next 5 years
Top tips to invest off plan:
Research the developer - it is vital to carry out research on the developer. Companies house is a good reference point for financial status and property portals online will show track records of properties developed and sold to provide a good indication of whether it is a worthy investment.
Mortgages - don‘t submit a full application until the development is within 3-6 months of completion to avoid paying extra upfront fees. Secure a decision in principle from the lender which is a quick review of the investors financial situation and providing a yes or no outcome.
Secure your off-plan investment - usually with an initial reservation fee and review the payment terms and would require a deposit with the balance paid on completion.
Capital appreciation - it could take up to two years to complete a new development, which will provide investors with capital appreciation, so the earlier you invest (and as long as investing in an area with strong demand and consistent potential growth) the more likely the there would be more gained.
Around 7% of landlords in the UK are ‘accidental’ and never intended to let out a property. Reasons for being an accidental landlord could include inheriting a property that hasn’t been sold on and being forced to let out a home that cannot be sold.
Approximately 700,000 landlords in the UK that have been receiving rent for a property, but haven’t been declaring it. For each year that passes, the tax bill is mounting.
In 2019, the government started to invest heavily in a specialist task force to hunt for landlords who had not been declaring rental income. Penalties for undisclosed income can be hefty, ranging from 15% up to 100% of the rental income in some cases. However, landlords who haven’t yet had the opportunity to declare previously unreported income, the Let Property Campaign is giving landlords the chance to get their tax affairs in order.Essentially, it is a government initiative which allows landlords to tell HMRC about any unpaid tax now. Landlords will then have 90 days to work out and pay what they owe with minimal penalties.
Average house prices in the UK reached a record high in March.
Lender Halifax’s managing director Russell Galley, said: “Following a relatively subdued start to the year, the housing market enjoyed something of a resurgence during March, with prices up by just over 1% compared to February.”He said: “This rise – the first since November last year – means the average property is now worth £254,606, a new record high.”
March data shows that house prices rose by 6.5% annually, or £15,430 in cash terms.
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