It’s Not All Bad News – UK Property Still Pays For Itself

UK Property There hasn’t been much to smile about in the UK this past month or so apart from England’s run in the European Championship – but at least the UK’s landlords can smile about their yields from residential and student property

While the property market in the UK has resembled something of a large football stadium an hour after a football match has finished, there are still those investors, either with the help of finance or large cash deposits, who find themselves having the pick of investment properties in UK cities.

Cash investors are finding that residential property in the UK more than stacks up with positive cash flow achievable from day one.  That’s because the properties many of them are investing in are discounted and they can enjoy a strong growing rental market.

A Private Rental Sector Health Check in 2012 from Upad revealed that almost 72% of landlords are more confident about the UK buy-to-let market. Rising tenant demand and increasing rents were given as a reason for the optimism.

Further good news came from a recent report from RICS that has revealed rents increased further in 2012, as tenant demand continued to outstrip supply.

The opportunity in the UK is in investing in discounted property in areas with high rental demand, the simple formula that will get you a long way as a portfolio property investor.

Mike, a good friend of mine who looks nowhere else other than the UK for property is delighted.  He said to me only the other day that he expects to be investing in more properties this year.


He also said “I can’t remember a time when the rental market has been this strong. The tenants I have are happy to stay in their properties longer and some are asking me if they can stay for more than a year.


This was even when I decided to increase the rent by 3% this year!”


Now I have to say (sorry Mike if you’re reading this) I’d hate to be one of his tenants.

Unfortunately like many people who would normally be buying their property, some of Mike’s tenants have no choice but to rent. They are unable to get finance with such strict lending conditions.

It is also unlikely we will see this improve in the medium term.

Mike is not alone in cashing in on UK property. There is a whiff of revolution in the air, a real change of mindset now among tenants who would in normal conditions be in it for the short term. Many have become tired of getting turned down by the banks and are accepting the new reality.

This is part of a major shift in a market. Britain’s former Prime Minister in the 1980s, Margaret Thatcher, wanted everyone in Britain to own their own home and renting became less common in the years that followed.

Most people accept that home ownership will not be so accessible now or in the immediate future and renting now seems like a more attractive option.  All of which is great news for landlords like my friend Mike of course.

Are you a UK tenant or a landlord affected by the new reality in the UK property market?  Please leave your comments below:


Kind regards


Loxley McKenzie
Managing Director