Quick Overview Of UK Due Diligence

It is almost impossible to have a conversation with anyone who is looking to invest in property without hearing the words ‘due diligence’. But what exactly do they mean?

When you purchase a property it is important to make sure every aspect of the investment is covered. Areas to look at, in the UK, include:

  1. Local town planning
  2. Land registry surveys
  3. Structural surveys
  4. The price of the last few properties sold in the street.

 

Hiring a good solicitor is an essential part of ensuring that everything about the property you will be investing in is clear – and that there are no potential problems or surprises lurking in the small print.

Alongside the property and its immediate location, investors should also consider the much broader picture to make an informed decision including:

  1. Macroeconomic factors 
  2. Microeconomic factors
  3. Project-specific considerations.

 

Macroeconomic factors

Macroeconomics looks at the bigger picture; it focuses on the national economy as a whole and includes economic indicators such as Gross Domestic Product (GDP), Foreign Direct Investment (FDI), economic growth, government incentives, stability of currency, tourism statistics, property cycle, national supply and demand ratio and taxation.

Microeconomic factors

Microeconomics looks at things at the local level. Local government, building restrictions, local business activity, local incentives, investment into the region, rental demand and resale potential.

Project-specific considerations

Project specifics are when we look in detail at the individual project or development. Building and planning permission, developer’s track record, bank guarantee, purchase contract, maintenance contract, deeds, plans, build specifications, size, price and design.

In general, the vast majority of property purchases in the UK are successful because due diligence is carried out thoroughly as a matter of routine. By carrying out thorough due diligence, before you invest, you will be in a stronger position to make an informed decision – and your chances of success will be that much higher!

 

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