If you type the term property investment into any of the major search engines you will come across literally hundreds of millions of pages. There are strategies, trends, rumours and news websites which will keep you entertained into the early hours of the morning. Some experts go into great detail as to why particular markets are looking interesting while others give an overview of property markets in general. You can literally go as deep into the sector as you want to but sometimes it’s the simple things that matter in property investment.
Location, location, location
The location of a property is obviously vital when looking at potential long-term capital gains and rental income. However, have you ever asked yourself about the particular factors which are commonplace amongst more popular property markets around the UK?
While the national economy is literally a law unto itself, it is worth taking note of the local economy if you are looking to acquire a property in a particular area. The simple fact is the more money earned and spent in a particular area the more attractive it becomes to property buyers and property investors. This is perhaps property investment at its most basic but how many people consider the local economy when looking to buy a property?
In many ways the employment market goes hand-in-hand with the local economy but the type of employment opportunities available can have an impact upon the local property market. For example, technology based employment opportunities have created extremely lucrative property markets across many parts of America. There are pockets of technology-based economies in the UK but very often the potential future growth is already reflected in property prices. If possible, the key is to find a market which has big potential for the future but may not have made the first real step as yet. However, with this type of investment comes the risk that the employment market will either not grow as quickly as expected or not emerge at all.
The infrastructure of any area has a major impact upon demand for property because very often people prefer to work in city centres but live just outside the city. This requires a good travel infrastructure which can be relatively expensive for the local authorities to build but if done correctly has the potential to pay for itself many times over. The “high speed two” train development was one area which attracted the attention of would-be property investors but as with many expensive infrastructure developments it has been put on hold for now.
A recent report confirmed that houses clustered around high standard primary and secondary schools have seen a significant boost in value. Many have always suspected that this was the case and a recent government report confirmed this. As schools around the UK continue to tighten their postcode entry systems it is likely that this trend in property prices will continue for some time to come.
There are many different ways to look at the property market – do you go for capital growth, rental yields or a mixture of the two? Sometimes it is good to go back to basics and to consider what actually makes property markets attractive and what makes them move in the future. The location is obviously a major factor but there are other issues to take into consideration such as those we have discussed today.
It is easy to spend too much time looking at complicated issues which impact property markets while ignoring the really simple key elements.