It is commonly assumed that because the UK’s population is increasing, this must be happening across the entire country. However, this is certainly not the case. The UK is made up of numerous micro markets, with some increasing at an exponential rate, others decreasing just as fast, and some changing in very subtle numbers. Therefore, it is imperative that you get accurate information on the area you are considering investing in.
Ideally, you are looking for an area where they are estimating that the population is growing in terms of percentage points per annum, Birmingham being one good example at the time of writing. The North East on the other hand, as a whole, tells the opposite story. In these two examples, I of course generalise and would recommend looking in much closer detail.
You may also find that some lending organisations either refuse or are hesitant to lend in areas where the population is decreasing. In this case, you might have gone to a lot of effort to later find out you cannot purchase the proposed property.
To get the best capital growth, you need to look at whichever town or city you are considering with a microscope. Look at the specific suburbs or neighbourhood of a city that are seeing consistent growth.
I find it astounding the number of people that tend to forget to consider this factor. In recent times the government have put considerable emphasis on the crime rates of cities and towns across the UK.
However it’s now easy to access this information via the internet. In years gone by, we would jump in a taxi in the given area, and within 15 minutes the taxi driver would be able to give a clear indication about which areas should be a no-go. And, to some extent, this is still a reliable method, with local people often being able to tell you far more about an area that the web.
This leads me on to my next suggestion, please don’t always believe everything your estate agent tells you, or at least don’t take it at face value. Instead, if you are not local to the area you need to make your own inquiries and come to your own conclusions.
Next Door Neighbour
Whilst speaking to the locals can tell you about an area, speaking to the neighbours can tell you about the property.
I regularly go and speak to the neighbours of a property, particularly when it is in an auction. When you start doing this, you will be amazed how much knowledge your neighbour will have about the property that you are looking to invest in.
They will clearly know who lives there, who owns the property, how long it has been on the market, and often why it hasn’t yet sold. And, even more importantly, you can sometimes get some key information, for example, if they need the money quickly to invest into another deal, or if they have personal reasons for needing a quick sale.
A quick conversation with a neighbour can result in you making a lot of money, or potentially save you from making a big mistake.
John will be back exhibiting at the next Property Investor Show on 7/8 October 2022 at London Excel – www.propertyivestor.co.uk