London is considered by many as the best location to invest in properties, be it commercial or residential, especially because of its financial sector, which contributed with £65.6 billion in the tax year of 2014, totalling nearly 11.5% of the government’s tax receipts.
However, despite the attractive figures, many changes have occurred lately, which have made many people turn away from the capital and look elsewhere for real estate investment. Medical investors are amongst those choosing to search for a property in other regions of the UK, where values are still attractive.
Things have changed for investors, including those interested in the medical field. The introduction of the new stamp duty this year meant that many buy-to-let investors had to reconsider everything, from raising rents to selling their properties. These tax changes saw investors being taxed an extra 3% on top of the basic rates of stamp duty for purchases of additional properties, meaning those that are not intended to be their main residence.
The intention was to reverse the decline in homeownership for first-time buyers, but the truth is that supply is limited and prices are high – medical professionals interested in property investment, then, should consider other areas of the country.
Rent and property prices in London have skyrocketed in the past decade, which means that medical investors may be looking at properties that won’t yield the big returns they expect – or are even impossible to purchase.
With an investment of £500,000, you can obtain one property in London, while in other regions of the UK, such as the North East, you can purchase three for the same price. This is making non-London areas extremely attractive for many investors.
Less Investment in Maintenance
Space is at a premium in London, meaning the construction of new developments is increasingly rarer, with refurbishments of existing properties becoming the norm. A lot of these buildings are old, which means that by investing in them, you may find yourself having to spend money on unexpected maintenance bills.
Outside of the capital there’s more space to build new properties and provide more efficient buildings that will require less upkeep.
Another big advantage of bypassing London as an investment hub is that there’s less competition to purchase the same property – and to attract tenants. Other regions of the UK don’t have such a competitive real estate market, meaning you have a higher chance of receiving your asking price, as you won’t need to lower it to compete with a high number of investors.
Medical professionals who intend to invest their savings into something other than their business should consider looking outside of the capital for their real estate investments. Prideview Properties have helped many Pharmacists and other medical professionals invest in real estate since 1985, and each November we host our Medical Investors’ Dinner in north-west London, which is open to all medical investors interested in this market.
You can get in touch with a member of our team to learn more about this event or about how we can help you find the perfect property to invest in.