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Property Investors Rejoice!

conservative securing future

We can all now concentrate on the policies that the majority winning party pitched their election campaign:

  • the extension of Right to Buy to 1.3m housing association homes in England;
  • 200,000 homes to be built over the course of the next parliament for first-time buyers aged under 40, who will secure a 20 per cent discount;
  • the launch of a new Help to Buy ISA for first-time buyers to help them get a subsidised deposit for a house;
  • the creation of a £1 billion brownfield regeneration fund to unlock sites for 400,000 homes, which may involve identification of public sector sites for building.
conservative carrying houses

These are all market sustaining policies that can add security to the long term sustainable profits made by private landlords.

The demand for property is still out growing the proposals for satisfying it, leaving a considerable shortfall to keep the market values rising across the UK. Take one sector example, the social housing demand for rental property is vastly outweighing the supply. It is reported by the government that over 1.5 million households on waiting lists for social housing. The house building that is due to commence now is still not going to come halfway to satisfy the demand, which is a great thing for maintaining prices on an upward trend for investors.

The opposite end of the pricing spectrum will see buyers return to boost prices further as concerns over a mansion tax are now lifted. The prime market can expect much of the deferred demand from the pre-election period to flow back into the market over the remainder of 2015 and 2016. It is worth noting in our view that the prime London market was looking much more fully priced than those in other areas prior to the election. Given investors will have to operate in a relatively high tax environment due to the stamp duty increases imposed in December 2014. It is our belief prime markets outside London are the ones to watch to see the greatest value increase in the shorter term.

Such is the confidence in UK residential investment the larger institutional investors are wading in with vast sums. Prudential for example, that has well over a century of property investment history behind it, is now firmly going ahead with what it expects will be a fresh £1bn-worth of investment into the private rented sector in the UK. Other major institutions, such as Aviva and Legal & General, are looking on with great interest as until now the dramatic growth in the private rented sector has been dominated by individual buy-to-let investors like us. The total amount of private sector investment into rental property has been estimated at a whopping £30bn. This insurgence by major financial institutions and investing institutions should provide additional confidence in the policies and the future for returns being healthy for all levels of investor.

Add factors like these to the general property market strength, the increase in lending products in the market and the future for the smart UK property investor who acts now is bright.

Smart investors will capitalise now by adding more property to their portfolio in the current window of opportunity.

Find out for yourself which of the most used and timeless investment strategies will position you for a predictable, reliable, steady, healthy stream of income into the future today. Call 0208 6109 472 now.

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