Written By Em

The economy should see substantial growth, after the first half of 2014 saw an increase in property prices.

The Office for National Statistics (ONS) has also revealed that the Government met their 2.0% inflation target at the end of the fourth quarter (Q4) of 2013. The amount of people unemployed has also dropped to 7.1%.

2014 looks to follow the growths of last year. UK Land Registry have also claimed that average property prices in England and Wales increased to £172,069 in April; a yearly growth of 6.7%. Prices in the housing market have risen at their quickest pace in around four years.

Evidently, now would be a good time to invest in the property sector. The five reasons why now is the time to invest in UK property are as follows:

High rental yields

Rents and demand for rental accommodation are at a record high, due to tenants renting for longer periods of time.

In May, the average price of renting a home in the UK was £1,006 per month, revealed Move With Us.

There has also been no drop in demand, as Countrywide reported that there are about ten possible tenants for each rental property in the market.

Why Now is the Time to Invest in UK Property

Strong commercial property

Commercial property in the UK is performing well, with yields in the first half of 2014 now matching the heights of 2010.

Commercial property values have risen by 0.8% in April, says the IPD UK Monthly Property Index. This follows twelve consecutive months of progress, as values are now 8% higher than they were a year ago.

Knight Frank predicts high levels of overseas investors in the UK commercial property market, in part a consequence of Taiwan’s relaxed rules. An arrival of Taiwanese investors could see investment levels rise by 15%.

Overseas investors

Overseas investors who buy property in the UK, particularly London, are fuelling the housing market.

Civitas has revealed that rich investors who purchase houses here are increasing prices.

Developments in mortgage lending and Government schemes are also driving up prices, with an increase in first time buyers around the UK.

However, the more buyers, the more demand, and cities are struggling to keep up. Now is a good time to invest if the property is suitable.

An array of assets available

Traditional property investments are not the only ones performing well. Student accommodation, care home bedrooms, and even car park spaces and self-storage units are also thriving.

The UK property sector is seeing higher house prices and strong rental returns.

However, most investors are only aware of the traditional assets, such as residential buy-to-lets or commercial property. Other investments can also provide high yields.

• Student property: Knight Frank have named it the UK’s number one performing asset, and student accommodation has overtaken every other asset class since 2011. A strong demand has been fuelled by increasing student numbers and high occupancy rates, causing good returns. Knight Frank predicts that yields will continue to grow throughout 2014.
• Care homes: Investment in the care home sector has stayed strong, due to their non-discretionary nature. The increasing aging populating of the UK has pushed these investments into the mainstream, alongside a lack of high quality bedrooms. Many investors receive high returns.
• Alternative assets: Self-storage units and car park spaces have become popular for investors seeking to expand their portfolios. There is a high demand in the UK for both of these sectors, and the right location could provide a regular income for investors. They can also be a good option for those with a smaller budget.
• Property ownership laws: The property sector of England and Wales provides a wide range of investment options. Overseas investors are attracted to the market by well-priced assets, and the present lack of restrictions on foreign nationals and overseas companies buying or renting properties. The market is considered trusted and established by property investors, making for a good location.

There has been a rise in the in the number of campaigners asking for a change in the law referring to electrical fittings in privately rented properties. Campaigners want landlords to become responsible for conducting mandatory checks on all fittings within their portfolio.

Eviction

Charity organisations Shelter and Electrical Safety First have both issued worrying figures, suggesting that a third of properties within England do not comply with basic electrical safety standards. The reports also show that over one million electrical problems were reported in England within the past year.

Lack of Legislation 

The two charities also highlighted the issue of there being no legal requirement for landlords to conduct a full electrical check before letting a property. There is also no legislation for landlords to check electrical appliances on a regular basis.

Research collated from the two organisations shows that 16% of people in privately rented accommodation had problems with electrical hazards in the period of 2012-13.

Small Price of Safety

Thorough inspections of electrical equipment within a property by a qualified electrician can cost in excess of £100. Charity group Electrical Safety First says that this is just a pittance to pay over a five-year period that will ultimately keep people safe.

Director general of Electrical Safety First, Phil Buckle, said that, ‘mandatory five yearly checks are the only way to ensure that all private rented sector properties are safe.’[1] He goes on to suggest that his proposals have the backing of a number of MP’s. Buckle said, ‘This change in law would be very easy to implement as the primary legislation already exists and our research shows that the majority of MPs would support a change in the law.’[1]

Buckle was referring to an Electrical Safety First survey conducted in 2011, where 65 out of 100 MP’s questioned supported the notion of mandatory electrical checks.

Should landlords be responsible for the electrics and appliances? 

Scared

In its own findings, Shelter discovered that a number of tenants were either evicted or served notice having alerted landlords to an electrical problem that was not their responsibility. Shelter’s chief executive Campbell Robb, said that he felt that more people face living in rented accommodation for prolonged periods of time.

He also said that, ‘no-one should feel too scared of eviction to ask a landlord to make a repair.’[1]

Certain Obligations

Responding to the findings, the Residential Landlords Association said that despite their being no specific regulations relating to electrical safety, landlords still have some obligations. These include safety checks for properties with a number of occupants, which must be carried out by a qualified electrician every five years.

It is the obligation of the landlord to ensure that electrical appliances are safe when they first let a property and for the duration of their ownership. Failure to do so may lead them to be prosecuted under the Defective Premises Act. This will occur if a tenant or resident in private rented property suffers death or injury as a result of fault electrical systems.

[1] http://www.landlordexpert.co.uk/2014/07/02/should-uk-landlords-be-responsible-for-the-electrics-and-appliances-in-their-properties/