At IP Global, we often get asked whether using a property management service is worth it. We've helped thousands of international landlords, and we know it can be tough when real estate giants offer soaring management fees or when local agencies aren't fully equipped to handle the needs of global investors. So, how do you find the balance – the right lettings and management partner for you? And what are our top 5 picks?

There's a common misconception that opting for cheaper options will result in higher investment returns. However, in reality, this approach often leads to potential costly mistakes, such as inadequate tenant screening. While finding a tenant may not be challenging in many UK markets due to the housing supply shortage, ensuring they are a good fit is essential.

Dealing with problematic tenants can be complex and time-consuming, resulting in periods of rental income loss due to legal proceedings. Therefore, it's important to choose a reputable property management agency that can protect your investment. Additionally, small-scale agents may lack the necessary tools for efficient management services, resulting in increased workload for you.

To help you navigate the ever-changing market, we've put together a list of the top property management firms in the UK right now. If you’d like to download the full table of property management fee comparisons, request it here.

Looking directly up at the skyline of the financial district in central London

1. Complete Prime Residential Ltd

Shelling out more than 20% of your rental income to a lettings and management agency isn't always essential for accessing essential tools, good tenant networks, and 24/7 client support which is why Complete are our first choice.

Complete Prime Residential specialises in property management and lettings, focusing primarily on international landlords while also serving domestic ones. With a large client base and over 600 positive reviews on Google, they have established a strong reputation. Their team includes multilingual staff, enabling effective communication with clients from various backgrounds.

They often manage entire property blocks, allowing them to build relationships with developers, contractors, and suppliers, resulting in cost savings for their clients. When rigorously assessing the fee structure at 10 major property management companies across London and other UK regional cities they came out on top in terms of pricing for clients.

Their services span across prominent markets in the UK, Germany, and Portugal, encompassing consultations, assistance with handovers, snagging, furniture packs, marketing and expert lettings and management. Additionally, they provide useful tools that enable landlords to manage and track tenant profiles, streamline compliance processes, facilitate efficient digital documentation for expedited tenant onboarding, and offer a platform for reporting and resolving maintenance issues around the clock to ensure tenant satisfaction.

With a real estate management portfolio worth $0.9 billion, Complete has a proven track record in letting units for international clients including securing pre-lets, resulting in high occupancy rates and minimal arrears. They offer attractive monthly rates for lettings and management services, with a London fee of 16.8% (inc VAT) and a 12% fee (inc VAT) for other UK cities. The monthly cost for a 1-bedroom apartment in London, leased at £2,000 per month, ranges from £335 to £395. This figure stands notably below the rates of other comparable lettings and management agencies, many of whom fall within the monthly fee of £415 and above category.

Find out more about their services here.

Edinburgh, UK - April 22, 2015: A 'For Sale' sign in Edinburgh for the estate agency Savills, advertising a property in the city's New Town area.

2. Savills

Savills understands the significance of real estate, spanning from the comfort of your home to broader market opportunities. Whether you're buying, selling, or renting, Savills offers unparalleled expertise that is grounded in trust. With over 40,000 professionals across 70+ countries, they have a presence in most global markets. They listen to your needs, offering tailored solutions for your goals. While their services may come at a higher cost, their global reputation speaks for itself. Notably, their lettings and management fee is set at 20.4% of the monthly rent, with a tenant finder's fee of £840. For instance, leasing a 1-bedroom flat at £2,000, would cost around £436 per month, excluding renewal or check-in/check-out charges.

Visit their website for more information here.

London, United Kingdom - February 03, 2019: Knight Frank branch at Canary Wharf. It is well known UK estate agency and commercial property consultants with 370 offices in 55 countries

3. Knight Frank

For over 125 years, Knight Frank has understood the significance of decisions that involve your property. Whether you're buying, selling, or letting, they ensure they make their clients feel confident and informed about their next property move.

Knight Frank's research team provides helpful insights into global property markets, distilling complex trends, forecasts, expert commentary, and opinions into easily digestible information. Whether you're curious about your current home's value or ready to put it on the market, their reliable property valuations aid you in making informed decisions.

Knight Frank leverages technology to secure comparable prices for your property at the best time, guided by the latest market trends and thorough analysis, they help guide their clients throughout their property journey. They offer similar property management fees to Savills with a fully managed property fee of 20.4% of monthly rent (inc VAT). We have worked out that if you charge £1,000 rent per month, your monthly property management fee will be £207.

To find out more about their services, visit their website here.

Circa London

source: Circa London

4. Circa London

Circa London has expertise in residential properties in prime central London. As a trusted, independent agency, they blend traditional values with modern expertise, ensuring exceptional outcomes for each client.

Operating in two London offices and boasting partnerships in Hong Kong, Singapore, Malaysia, and Shanghai, Circa London offers local knowledge coupled with a global network. This unique positioning provides clients with comprehensive services and valuable international exposure for their assets.

Beyond geographical reach, Circa London prioritises personalised service, treating each client with professionalism and care. Whether navigating the market as a first-time investor or seeking seamless management solutions for busy schedules, clients receive ongoing guidance and unwavering support. Their commitment to fulfilling expectations is reflected in their consistent track record of leaving clients happy in online reviews.

Circa London offers competitive pricing leaning toward Savills and Knight Frank with a management and lettings fee of 19.2%. When factoring in additional fees, the monthly cost for a 1-bedroom flat rented out at £2,000 pm amounts to approximately £450.

Explore their service offerings further on their website here.

Row of typical English terraced houses in West Hampstead, London

5. MyLondonHome

Established in 2002, MyLondonHome has carved a distinctive space within the heart of London's real estate and lettings landscape. They have maintained reliability, trust, and exceptional customer service across residential sales, lettings, and new homes sectors for over 2 decades. Their commitment to the highest standards is evident through memberships with Propertymark Association of Residential Letting Agents (ARLA) and National Association of Estate Agents (NAEA).

MyLondonHome achieved an impressive 98.5% customer satisfaction score at the 2023 ESTAS awards – which is a testament to their resolute dedication to client satisfaction. Whether navigating the intricacies of buying, selling, renting, or letting, they support you with strategic insights and innovative technology to guide you through the journey.

When assessing MyLondonHome's fees, the calculation for the monthly cost of renting a 1-bedroom flat at £2,000 per month totals around £395, exclusive from certain fees like their £360 renewal fee.

Discover more about MyLondonHome here.

An aerial photograph of the Victorian Sackville Street buiding set against the more modern urban architecture in Central Manchester, England. The photograph was produced on a bright sunny day with clear blue skies

6. Reside

Reside operates out of their Manchester and Stockport offices. They provide a top-tier property management service encompassing all aspects, ranging from identifying suitable tenants to the day-to-day maintenance of the property. Additionally, Reside ensures good service for tenants, giving landlords the peace of mind that their investment is being professionally managed and maintained.

Reside’s experienced lettings managers start off by giving their landlords a complimentary market appraisal. From there, they offer a marketing strategy which includes professional photography, an appealing description, and essential reports shared with a vast applicant database and major property portals to secure suitable tenants. Reside provides support throughout the rental process, including drawing up agreements, managing viewings, and overseeing essential property management tasks such as rent collection, lease renewals, and routine maintenance.

Reside, Manchester, offers reasonable prices relative to their development locations with a 12% full management fee and a tenant finder’s fee of £600. Without this tenant finder’s fee included, the monthly charge for a fully managed 1-bedroom apartment, rented out for £2000 per month will amount to £340.

Find out more about Reside’s services and fees here.

Berlin, the vibrant capital of Germany, has not only withstood the test of time but has emerged as a symbol of economic resilience. Over the years, the city has faced numerous challenges, from the devastation of World War II to the division during the Cold War. However, Berlin's ability to adapt, innovate, and embrace change has played a pivotal role in its economic resilience, making it a powerhouse in the global economy.

sunrise over Berlin Oranienburger Strasse with Tv-Tower and Synagogue

Historical Transformations

Berlin's history is marked by significant transformations. The city rose from the ashes of World War II, rebuilding its infrastructure and economy with determination. The fall of the Berlin Wall in 1989 symbolized the end of the Cold War, leading to the reunification of East and West Berlin. This reunification brought about immense economic challenges, yet Berlin turned adversity into opportunity by embracing a new era of growth and development.

Innovation and Technology Hub

In recent decades, Berlin has evolved into a thriving hub for innovation and technology. The city's open-mindedness, coupled with a supportive environment for startups, has attracted entrepreneurs and investors from around the world. The rise of tech hubs, co-working spaces, and a burgeoning startup scene has contributed significantly to Berlin's economic resilience.

Berlin-Brandenberg-Airport

Diversification of Economy

Berlin's economy is characterised by its diversification across various sectors. While the city has a strong industrial base, it has also invested heavily in the creative and cultural industries. The presence of world-class museums, galleries, and a thriving arts scene not only adds to Berlin's cultural richness but also provides a resilient economic foundation.

Educational Excellence

The city boasts top-tier educational institutions, contributing to a highly skilled and educated workforce. Berlin's focus on education and research has led to breakthroughs in various fields, fostering innovation and attracting talent. A well-educated workforce is a key factor in sustaining economic growth and resilience.

crane among construction site and modern apartment building in Berlin

Sustainable Urban Development

Berlin places a strong emphasis on sustainable urban development. The city is a pioneer in green initiatives, with an extensive public transportation system, green spaces, and a commitment to renewable energy. This forward-thinking approach not only enhances the quality of life for residents but also positions Berlin as a sustainable and resilient economic centre.

Global Connectivity

As the capital of Germany, Berlin benefits from its strategic location in the heart of Europe. The city's connectivity through transportation networks, international airports, and a central location within the European Union has made it an attractive destination for businesses looking to establish a global presence.

Aerial view of Berlin skyline with famous TV tower at Alexanderplatz and dramatic cloudscape in twilight during blue hour at dusk. Germany

Berlin's journey from a war-torn city to an economic powerhouse showcases the resilience embedded in its DNA. The city's ability to adapt to change, embrace innovation, and prioritize sustainability has been instrumental in shaping its economic success. As Berlin continues to evolve, it stands as a testament to the notion that resilience is not merely a response to adversity but a proactive approach to building a robust and sustainable future.

Take a look at our latest investment opportunity in Berlin, Yves Quarter.

Leasehold and freehold are two common terms used in the property market. While they may sound similar, they have distinct meanings and implications for property ownership. Understanding these differences is crucial for property investors to make informed decisions.

Freehold Meaning

Freehold ownership grants the holder absolute and perpetual ownership of the property, encompassing both the building and the land it stands upon. Freehold ownership is typically associated with detached houses and some semi-detached houses.

Leasehold Meaning

Leasehold means renting a property for a set duration. The leaseholder effectively pays for the right to occupy the property, but they do not own the underlying land. This means that the leaseholder may have to pay ground rent to the freeholder, who owns the land. Additionally, the leaseholder may be subject to various restrictions imposed by the freeholder, such as limitations on alterations or pet ownership. Leasehold ownership is common for apartments and flats, accounting for around 70% of leasehold homes in England.

real estate concept, choose house to buy, different offers of property online on virtual screen

How Long Can a Lease Be?

Leasehold properties typically have a fixed term of 99 or 125 years, but leases can range from 21 years to 999 years. The freeholder typically determines the length of the lease, and there are no strict minimum or maximum limits. However, shorter leasehold properties are often less desirable and may command a lower resale value due to the uncertainty associated with a shorter term.

Here's a breakdown of typical lease lengths:

99 years: This is the most common lease term for leasehold properties. It provides a balance between affordability and flexibility, and it is typically considered a long-term investment.

125 years: This lease term offers greater security and potential for resale value compared to 99-year leases. However, it is also associated with higher initial purchase costs.

21 to 999 years: Lease lengths outside the 99-year and 125-year range are less common, but they do exist.

 

Full length of businesswoman discussing with customers at empty home. Female Real Estate Agent is standing with man and woman by window. They are at new apartment.

Advantages of a Leasehold Property for Investors

The flexibility benefits of leasehold properties are often overshadowed by the perceived advantages of freehold ownership. However, for certain types of investors and property uses, leasehold arrangements can offer unique advantages in terms of flexibility and adaptability.

Diversification of Investment Portfolio: Leasehold properties can offer diversification within an investment portfolio, providing exposure to a separate set of risks and opportunities compared to freehold ownership. This diversification can help to reduce overall portfolio risk and potentially enhance returns.

Lower Initial Investment Costs: Leasehold properties typically have lower upfront costs compared to freehold properties. This lower initial investment can be particularly appealing to investors with limited capital or those seeking to enter the property market with a smaller financial commitment.

Reduced Maintenance and Repair Responsibilities: Leaseholders are typically not responsible for the major maintenance and repairs of the building's structure or common areas. These costs are usually paid for by the freeholder, who is responsible for maintaining the overall property. This can be a significant advantage for investors who lack the time, expertise, or resources to manage these aspects of property ownership.

Signing of document

Advantages of a Freehold Property for Investors

Stability and Security: Freehold ownership offers a sense of stability and security that leasehold properties cannot match. The absence of leasehold restrictions and the permanence of ownership provide peace of mind for investors, ensuring that they have long-term control over their property asset.

Potential for Higher Rental Yields: Freehold properties often attract higher rental yields compared to leasehold properties, owing to their perceived desirability among tenants. This is because tenants value the stability and security associated with freehold tenure and the potential for longer-term leases.

Enhanced Borrowing Capacity: Freehold properties may provide greater borrowing capacity for investors when seeking financing for property acquisitions or renovations. Lenders often view freehold ownership as a more secure form of collateral, potentially leading to more favourable loan terms.

 

Aerial top down view of houses in England - New estate with typical British houses and green gardens - Real estate and buildings concepts in UK

Leasehold Charges

Leasehold properties typically incur additional costs beyond the initial purchase price. These ongoing expenses are often referred to as "leasehold charges" and are typically paid for by the leaseholder. The specific costs may vary depending on the property and the terms of the lease, but they generally include the following:

Ground rent: This is a recurring fee paid to the freeholder, who owns the land upon which the property stands. Ground rent is typically a fixed amount payable annually or semi-annually.

Service charges: These charges cover the costs of maintaining and managing the common areas of the building, such as hallways, gardens, elevators, and shared facilities. Service charges may also include costs for services such as cleaning, security, and insurance.

Administration charges: These charges are levied by the freeholder or managing agent to cover the costs of managing the leasehold property, such as administration, accounting, and legal fees.

Leasehold enfranchisement costs: If leaseholders wish to acquire the freehold ownership of their property, they may incur a one-time enfranchisement fee. This fee is typically calculated based on the value of the property and the remaining lease term.

In addition to these recurring costs, leaseholders may also face one-time expenses associated with their lease, such as lease extension fees or variation fees. These fees are typically charged when leaseholders seek to extend the lease term or make significant alterations to the property.

plumber fixing a leak in the kitchen sink of a house - focus on his tools

Control and Flexibility

Leasehold and freehold ownership differ significantly in terms of control and flexibility. Freehold owners enjoy greater autonomy over their property, while leaseholders are subject to various restrictions imposed by the freeholder.

Freehold Control and Flexibility

The control that Freehold property ownership allows gives owners the authority to:

Make alterations and renovations without seeking permission: Freehold owners have the freedom to modify their property as they see fit, whether it's minor cosmetic changes or extensive structural alterations.

Choose their own tenants: Freehold owners have complete discretion in selecting tenants for their rental properties, setting rental terms, and managing tenant relationships.

Enjoy unrestricted property usage: Freehold owners can utilise their property for any legal purpose, whether it's residential, commercial, or a combination of both.

Make long-term plans without limitations: Freehold ownership provides the security and flexibility to make long-term plans for the property without constraints imposed by a lease term.

A "to let" sign on a building

Leasehold Control and Flexibility

Leasehold ownership, on the other hand, imposes various restrictions on property usage and modifications. Leaseholders are typically subject to:

Leasehold covenants: Leasehold agreements often include covenants that restrict certain activities or alterations, such as pet ownership, noise levels, or specific renovations.

Freeholder's permission for significant changes: Leaseholders may need to obtain permission from the freeholder for major alterations or renovations, which can add time and complexity to the process.

Limited property usage: Leasehold properties may be restricted to specific uses, such as residential or commercial, as determined by the lease agreement.

Uncertainty due to lease expiry: Leaseholders face the potential uncertainty of lease renewal or redevelopment upon lease expiry, which can impact their long-term plans.

The differing levels of control and flexibility between freehold and leasehold ownership can have significant implications for property investors. Freehold properties offer greater flexibility and autonomy, making them more attractive for investors seeking long-term control and the freedom to customise their property. Leasehold properties may be less appealing to investors due to restrictions and potential uncertainty associated with leasehold tenure. It is important to carefully consider these trade-offs when evaluating leasehold or freehold investment opportunities.

Residential buildings with blue sky

Understanding the nuances of leasehold and freehold ownership is essential for property investors to make informed decisions that align with their investment goals and risk tolerance. By carefully considering factors such as control, flexibility, and potential rental income, investors can navigate the property market with greater confidence and maximise their potential for success. If you would like assistance in determining the best option for you, please don't hesitate to contact us. Our team of consultants is ready to provide guidance and support.

As a property investment company committed to growing our clients' wealth, we prioritize transparency in presenting the various options within the alternative asset industry we operate in.  

This industry is a broad and dynamic sector encompassing a wide range of assets that are not traditionally considered part of the public markets. In recent years, there has been a growing interest in alternative investments among individual investors, driven by factors such as diversification, volatile public markets, and the search for uncorrelated returns.  

According to Preqin, total assets under management in the alternative assets industry are projected to reach $23.3 trillion by 2027, an approximate 80% increase from the $13.3 trillion recorded in 2021.  

Goldman Sachs is equally optimistic, noting a doubling of assets in non-publicly traded markets to about $10 trillion over the past five years, as reported by McKinsey & Co.  

luxury watches

What are the best alternative assets to invest in? 

Here are some of the biggest and fastest-growing assets in the alternative investment industry available to individuals: 

1. Real Estate: Real estate has long been a popular alternative investment for individuals, offering the potential for both income generation and capital appreciation. 

It stands out as the largest sector in the industry, valued for its potential to diversify portfolios, reduce volatility, and amplify returns through leveraged capital appreciation. Even in an inflationary or volatile environment, it performs well as investment properties derive their value from a rent-based multiple, and as rents increase due to inflation, the overall value of the property also rises. 

There are a variety of ways to invest in real estate, including direct ownership of property, real estate investment trusts (REITs), and real estate crowdfunding platforms.  

To find out about your options, contact IP Global here, we’ve been active in this market globally since 2005 with over USD3 billion invested on behalf of our clients.

2. Private Equity: This form of investment involves backing non-publicly traded companies, presenting both high-risk and high-return potential. It includes opportunities in venture capital and traditional private equity, allowing investors to participate in burgeoning enterprises.

Private equity investments, known for their illiquidity, can be challenging to sell quickly. However, they hold the promise of significant returns post a successful merger, initial public offering, or acquisition.  

Venture capital, a subset of private equity, focuses on early-stage companies with substantial growth prospects, offering a risky yet potentially rewarding investment that may take years to mature.

girl in a mask

3. Art and Collectibles: Art and collectibles (such as antiques, rare wines, memorabilia and designer products) can be valuable assets that appreciate over time.

Unlike stocks or bonds, the value of collectibles is influenced by factors such as cultural significance, scarcity, and trends in taste, providing a hedge against market volatility.  

Additionally, these investments can offer a tangible and enjoyable ownership experience, blending financial potential with personal satisfaction.  

However, it's essential for investors to conduct thorough research, be aware of market trends, and understand the risks associated with the often-subjective nature of valuations and the potential illiquidity of these assets. 

4. Natural Resources: Natural resources, including oil, gas, and precious metals, represent an alternative asset class with both advantages and disadvantages. On the positive side, these assets have the potential for high returns. 

The demand for natural resources often correlates with global economic growth, and fluctuations in supply and demand can lead to substantial price movements, offering investors opportunities for significant profits. 

However, a drawback associated with investing in natural resources is their inherent volatility. Prices of commodities like oil and precious metals can be highly sensitive to geopolitical events, economic conditions, and other external factors. This volatility introduces a level of risk that may not be suitable for all investors, and sudden price swings can lead to substantial losses.  

Therefore, while natural resources present the potential for lucrative returns, investors must carefully assess and manage the associated risks.

turbine

5. Infrastructure: Infrastructure investments can involve projects such as roads, bridges, and airports. These projects can be long-term investments, but they can also offer the potential for stable returns. These ventures often serve as essential elements of a nation's economic infrastructure, promising long-term reliability.

Investors are attracted to the steady income generated by well-maintained infrastructure, particularly in cases where public-private partnerships or concession agreements are involved. For instance, toll roads can provide a consistent revenue stream, offering an attractive proposition for those seeking stable returns over an extended period. 

However, the allure of infrastructure comes with certain challenges. These investments tend to be capital-intensive, requiring substantial upfront funding for planning, construction, and maintenance. This capital commitment can be a limiting factor for individual investors or smaller institutions. 

 Furthermore, infrastructure projects are exposed to various risks, including delays, cost overruns, and changes in regulatory landscapes so political and economic factors play a pivotal role, influencing the success and profitability of these projects.

6. Impact Investing: Impact investing combines financial returns with positive social and environmental outcomes. Investors are attracted to this approach because it allows them to align their capital with values, addressing global challenges like climate change and poverty. It encompasses investments in sustainable businesses, green projects, and initiatives supporting social causes.

The growing interest in impact investing is driven by a heightened awareness of environmental and social issues, with investors recognizing the importance of considering such factors for long-term financial success. This approach has contributed to the rise of dedicated impact funds and investment platforms. 

7. Digital Assets: Digital assets, such as cryptocurrencies and non-fungible tokens (NFTs), are a new and emerging asset class with the potential for high returns. However, they are also highly volatile and speculative.

people walking down the stairs

Why invest in alternative assets? 

Beyond the traditional asset classes of stocks, bonds, and cash, alternative investments offer a unique suite of diversification, growth potential, and risk-adjusted returns.  

By venturing beyond the public markets, investors can tap into private company valuations, higher growth opportunities, and lower cost structures, often leading to superior risk-adjusted and nominal returns compared to traditional investments.  

Additionally, alternative assets exhibit lower correlation to public markets, providing a hedge against inflation and generating a reliable stream of passive income.  

While alternative investments may carry higher complexity and illiquidity, they offer a compelling avenue for diversifying portfolios and potentially achieving enhanced investment outcomes. 

In today's interconnected world, diversifying your investment portfolio beyond your home country's borders has become increasingly attractive. Overseas property investments offer a unique opportunity to expand your horizons, potentially tap into emerging markets, and hedge against economic fluctuations in your home country.

The Appeal of Overseas Property Investments

Investing in overseas property presents a compelling opportunity for investors seeking diversification and enhanced returns. Beyond financial benefits, such as potential appreciation and rental income, it offers the allure of owning a tangible asset in an attractive location, often with lifestyle advantages like access to vacation destinations or emerging markets.

These properties can serve as hedges against economic volatility, as real estate often appreciates over time, and they can provide a sense of stability in a broader investment portfolio. By including international real estate in their investment strategy, investors can harness the power of global market dynamics and enrich their overall portfolio, making it a compelling choice for those looking to balance risk and reward in their investment endeavors.

Abstract European Union flag

Considerations for Overseas Property Investments

Before embarking on an overseas property investment journey, it's crucial to do research into the different property markets.

Fortunately, at IP Global, we do that work for you where we investigate the property market, legal framework, and tax implications in the desired country for property investment.

Extensive research has gone into markets such as Germany and Portugal and we have found those two have proven to have lucrative opportunities for property investment. When considering rental income, factoring in operating costs are essential. Our sister company, Complete Prime Residential are a leading global management and lettings company that can help with all the administration and tenant relations to ensure you maximise your rental income and minimise your void periods.

Aerial view of Berlin with Alexanderplatz tv tower - Germany

Benefits of Property Investment in Germany

Germany, the economic powerhouse of Europe, has long been regarded as a haven for stability and growth. Its robust economy, characterised by low unemployment rates, consistent GDP growth, and a thriving industrial landscape, has made it a magnet for investors seeking safe and lucrative opportunities. Germany’s GDP is estimated to be €3.87 trillion, ranking them the 4th highest in the world.

This stability extends to the German real estate market, which has consistently demonstrated resilience even during economic downturns. According to Oxford Economics, the real estate market is forecast to see 28.9% growth in house prices over the next 10 years.

Germany's reputation for real estate investment safety stems from several factors. Firstly, the country's stringent legal framework and transparent property registration system provide strong protections for property owners. Secondly, Germany's stable economic environment and low interest rates have contributed to steady property value appreciation over time.

Thirdly, the country's well-developed infrastructure, high quality of life, and strong tenant protection laws make it an attractive place to live, ensuring a steady demand for rental properties. Germany, according to FDI Intelligence in 2023, has been ranked the ‘Best Country for Foreign Investors in Real Estate’.

Germany's rental market presents a compelling investment opportunity for both domestic and international investors. The country's strong economy and growing population have created a high demand for rental properties, particularly in major cities like Berlin, Munich, Hamburg, and Leipzig. This demand, coupled with the general housing shortage, contributes to consistently increasing rental yields, making Germany's rental market an attractive source of passive income.

Popular Cities and Regions for Property Investment

Germany offers a diverse range of property investment opportunities across its various cities and regions. With prime rents on the rise and above the five-year average by 2.8%, some of the most popular areas for investment in the current market include:

*Source: JLL Research, Housing Market Overview – H1 2023

Investing in German real estate offers a unique opportunity to capitalise on the country's economic strength, stable property market, and growing rental market. At IP Global, we have numerous properties available in Berlin and Leipzig, for more information, download the 2023 German Investment Case here.

oporto city with douro river and dom luiz bridge under blue sky, portugal.

Benefits for Property Investors in Portugal

Portugal, a European gem, captivates with its rich history, diverse landscapes, enchanting culture, and enviable climate. Its thriving economy is driven by technology, renewable energy sources and tourism with about 22 million tourists per year.

A strong focus on education has fostered a highly skilled workforce, fuelling business growth and innovation. With an economy worth 205 billion Euros and voted the ‘Best Country for Doing Business in Europe’ by the World Bank, Portugal has demonstrated resilience and steady growth, creating a favourable environment for investment.

Portugal's real estate market has witnessed remarkable growth, with major cities like Lisbon and Porto undergoing urban rejuvenation. Coastal regions like the Algarve and Silver Coast draw investment in luxury resorts and residential properties.

Portugal's rental yields are among Europe's highest. Oxford Economics forecasts a 15.2% growth in house prices over the next 10 years. The market caters to diverse properties, from single-bedroom apartments to opulent villas. Enhanced infrastructure, including airport expansions and high-speed rail developments, further strengthens Portugal's allure for investors.

Key Cities and Regions for Property Investment in Portugal

Portugal offers a diverse range of property investment opportunities across its various cities and regions. Some of the most popular areas for investment include:

Investing in Portuguese real estate offers a unique opportunity to capitalise on the country's economic stability, attractive tax regime, pleasant climate, and growing popularity among investors and lifestyle seekers. At IP Global, we offer properties currently in Porto, for more information, find it on our website here.

Diversifying your portfolio with overseas property is a prudent move in today's globalised world. Germany and Portugal, with their unique advantages and growth potential, offer enticing opportunities for UK investors. At IP Global, we are here to guide you through your investment journey and help you achieve your financial goals. We have a wide selection of properties that suit a variety of investors with one thing in common: strong growth potential and reliable yield predictions, take a look at what's on offer here.

Investing in property is a significant decision, and choosing the right location is crucial for long-term returns. York, a historic city in the north of England, offers a range of opportunities for property investors. In this blog, we'll explore three promising areas for property investment in York: Holgate, Tang Hall, and Bishopthorpe. Each of these areas have unique characteristics and will appeal to different types of investors.

Holgate

One area that has been garnering attention for its investment potential is Holgate, a picturesque neighbourhood located just west of York's city centre.

Holgate York

Prime location:  Holgate, tracing its origins back to the 14th century, has seen remarkable growth since the late 1800s, owing much of this expansion to its close proximity to York city center. Among its historic treasures is the Holgate Mill, which dates back to 1770. While it ceased its corn milling operations in 1933, it stands tall today, operating as a flour mill and serving as a popular tourist attraction. The neighborhood also offers a host of other appealing attractions, such as the renowned National Railway Museum and a well-preserved Cold War Bunker.

Situated just a brief 10-minute drive from York city center, Holgate provides convenient access to the city's train station, offering connections to various parts of Britain. The area enjoys a robust network of public transportation, seamlessly connecting residents to the heart of the city via the A59 and serving as a vital entry and exit point via the ring road. Leeds is an easy 45-minute journey away, and the Leeds Bradford International Airport is conveniently located at a similar distance. Moreover, Holgate is on the doorstep of the stunning North York Moors National Park.

In addition to these amenities, Holgate offers delightful walks along Holgate Beck, while nearby West Bank Park and Hob Moor provide serene open spaces for relaxation and recreation. For those seeking more extensive leisure options, there are nearby attractions such as Clifton Park, Rowntree Park, and the world-famous York Racecourse.

Sports enthusiasts will find a diverse range of options, including the York Railway Institute Football Club, York Lokomotive rugby and hockey teams. The district is particularly appealing for families, as it is home to nine schools, making it a well-rounded community for residents of all ages.

Steady property value growth: Property values in Holgate have shown consistent growth over the years with the area seeing an average house price increase of 7% over the last 12 months according to OnTheMarket. This steady appreciation makes it an appealing choice for property investors seeking long-term stability and potential capital gains. The area's popularity and proximity to the city centre contribute to this trend, making Holgate a solid investment choice for those looking for sustainable property value growth.

Variety of property types: Holgate offers a diverse range of property types, from charming period homes to modern developments. This variety provides investors with flexibility in their investment choices. Whether you're interested in buy-to-let opportunities, flipping properties, or long-term rentals, Holgate's property market caters to a broad spectrum of investor preferences and budgets.

Marlowe House Featured Image

Take a look at our latest property for sale in York, Marlowe House.

Tang Hall

Tang Hall, an evolving neighbourhood located to the east of York's city centre, offers a range of compelling reasons for property investors drawn to its regenerative nature.

Tang Hal York

Investment potential: The Tang Hall estate, once designated as greenbelt land, was acquired by the City of York council in 1921 with the aim of providing quality housing for laborers. It lies to the east of the city and consists mainly of houses dating from the 1930s.It has been experiencing significant regeneration and transformation in recent years. This coupled with increased investments in infrastructure and amenities, bodes well for property investors as it has become a very popular location for international students due to its proximity to the University of York.

Student hub: The neighbourhood of Tang Hall offers a mix of housing options, local stores, and community facilities, making it a practical choice for those seeking a convenient and accessible place to live while attending the university. With a substantial student population in the vicinity, the area is ripe for buy-to-let investors looking to tap into the consistent demand for student housing. This provides an opportunity for investors to secure a stable source of rental income.

Affordable Housing Options: Tang Hall offers more affordable housing options compared to some other areas in York. According to Rightmove, the average selling price in the area sits at around £357,296 for a 3 to 4-bed house, a 5% increase from the previous year and a 20% increase on the 2020 peak of £271,071. Flats start at £140,000. This affordability makes it accessible to a wide range of investors, including first-time buyers and those with budget constraints.

The ongoing developments and improvements in Tang Hall signal a promising future. Investors who get in early on this area can benefit from the predicted growth in property values as the regeneration efforts continue and the neighbourhood’s appeal increases.

Bishopthorpe

Nestled just south of York, the charming village of Bishopthorpe presents an attractive option for those looking to buy property in York.

Bishopthorpe York

Desirable Village Setting:

Bishopthorpe, a charming village and civil parish, beckons affluent residents with its picturesque setting just three miles south of York in North Yorkshire, England. Nestled by the River Ouse, this setting provides a beautiful canvas for the well-to-do inhabitants. The conservation status granted to Main Street and the Palace in 1989 underscores the area's historic and architectural appeal. With a rich history dating back to the Domesday Book and the first written record of its name in 1275.

Proximity to York: Despite its village feel, Bishopthorpe is conveniently located just a stone's throw away from York's city centre. This accessibility ensures that residents can enjoy the amenities and opportunities the city provides while enjoying the tranquillity of village living. For potential investors, this balance between a calming village setting and city proximity is a unique selling point.

Steady Demand for Properties: Bishopthorpe boasts a consistent and strong demand for properties. Its desirable location and limited housing supply contribute to the area's stable investment appeal. As reported by OnTheMarket, house prices have increased by an impressive 6.8% in the past year, emphasising the region's strong growth potential. Whether you're looking to purchase a property for long-term capital appreciation or as a buy-to-let investment for rental income, the steady demand in Bishopthorpe is a great choice for investors.

When considering investing in York property, it's essential to assess your goals, budget, and target tenant or buyer demographics. Holgate offers a mix of property types and is excellent for those seeking proximity to the city centre. Tang Hall is undergoing positive changes and is suitable for investors looking for growth potential and student housing opportunities. Bishopthorpe, on the other hand, offers a unique village setting and potential for both rental income and capital appreciation.

Ultimately, the best area for property investment in York will depend on your specific objectives and financial circumstances. However, with careful research and the right strategy, each of these areas can provide excellent opportunities for property investors. To find out more about your options in York, request a consultation here.

Investing in real estate has long been a popular choice for those looking to build wealth and secure their financial future. Among the many options available to investors, purchasing an investment property stands out as a viable and potentially lucrative venture. This blog dives into the benefits of buying an investment property, focusing on the advantages it offers to investors seeking to diversify their portfolio and generate long-term income.

Rental Income

One of the primary advantages of investing in property is the potential for rental income. When you buy an investment property, you have the opportunity to earn a steady stream of monthly income through rent payments from tenants. This consistent income can help cover the property's operating expenses and mortgage payments, making it a reliable source of financial stability. Moreover, as property values tend to appreciate over time, your rental income can increase, allowing for higher rental rates and greater cash flow.

To Let Sign outside row of 19th Century houses in Bristol, England

Capital Appreciation

Investment properties typically appreciate in value over the long term. Real estate, in most markets, has historically shown an upward trajectory in terms of value. For example, according to the ONS, the average UK house price in June 2023 was £286,000. This compares to an average UK house price of £224,000 in June 2018, a difference of £62,000. This represents an increase of 27.7% over 5 years. This appreciation can result from a variety of factors, including inflation, increased demand, and limited supply. As property values rise, the equity in your investment property grows, providing you with the potential for substantial gains when you decide to sell.

Tax Benefits

Investing in real estate offers several tax advantages that can significantly impact your financial outlook. Some of the key tax benefits of owning an investment property include:

  1. Depreciation: You can claim depreciation on your investment property as a tax deduction, reducing your taxable income. This allows you to offset some of the rental income you receive.
  2. Mortgage Interest Deduction: Interest paid on the mortgage for your investment property is generally tax-deductible. This can lead to substantial savings come tax season.
  3. Property Expenses: You can deduct various property-related expenses, such as maintenance, repairs, and property management fees, from your rental income.

the inscription TAX BENEFITS on the display of the calculator, the documents are on a wooden table

Property Investment and Portfolio Diversification

Diversifying your investment portfolio is crucial to managing risk. Investment properties offer an alternative asset class that is distinct from stocks, bonds, and other traditional investments. By adding real estate to your portfolio, you can reduce your overall risk exposure and create a more balanced investment strategy. Real estate often has a low correlation with the stock market, which means that it can perform well even when other assets are underperforming.

Hedge Against Inflation

Real estate is considered a natural hedge against inflation. When inflation occurs, the cost of living typically rises, and the value of currency decreases. However, as property values and rental income tend to increase in response to inflation, owning an investment property can help safeguard your wealth against the eroding effects of rising prices.

Global inflation rate 2022 problem stockmarket and risk asset stockmarket crash

Passive Income

Investing in real estate can provide a source of passive income. Once your property is set up and tenanted, it requires relatively little day-to-day involvement compared to other business ventures. This is especially beneficial for investors who prefer not to actively manage their investments, as property management companies, such as Complete Prime Limited can handle tasks such as finding tenants, maintenance, and rent collection.

Leverage

Real estate investing often allows for the use of leverage, which means you can finance a substantial portion of your property purchase with borrowed money. This leverage can amplify your returns. For example, if you invest £50,000 into a property worth £200,000 and the property appreciates by 5%, your return on investment is not just 5% on your initial £50,000 but on the full £200,000 property value.

Aerial view of London suburb in the morning, UK

Control Over Investment

When you buy an investment property, you have direct control over its management and performance. Unlike some investments, such as stocks, where you have no say in the company's operations, owning an investment property enables you to make decisions that can impact your property's value and income. You can choose to increase rent, make property improvements, or change management strategies to optimise your investment.

Retirement Planning

Investment properties can play a crucial role in your retirement planning. As you build equity in your properties and pay down mortgages over time, you'll have the option to sell them or continue to collect rental income in retirement. This additional income can help support your financial needs in later years, providing peace of mind and financial security.

Real estate ideas, selling a house, or renting out real estate. The sales representative discusses the terms of the home sales contract for the customer to sign the legal contract document,

Wealth Building

Ultimately, buying investment properties is a means of wealth creation. The combination of rental income, property appreciation, and tax benefits can result in significant financial gains over time. It's a strategic way to grow your assets and create a sustainable income stream for the future.

Investing in real estate, specifically through buying investment properties, offers numerous benefits to investors looking to build wealth and secure their financial future. By understanding these advantages and implementing a well-thought-out investment strategy, you can achieve your financial goals and create a more secure financial future. Remember that real estate, like all investments, comes with risks, so thorough research and due diligence are essential before making any investment decisions. If you would like some more information about investing in property, do not hesitate to get in touch to speak to one of our experienced consultants.

 

Investing in real estate has long been a popular way to build wealth and diversify one's investment portfolio. Property investment funds and Real Estate Investment Trusts (REITs) are two attractive options for investors looking to tap into the real estate market if they are not looking for direct property ownership. We spoke to Selina Williams, Executive Director of IP Investment Management, who specialises in this area, to give insights into the options and how to navigate your investments.

IPIM Logo

What does IPIM do?

IP Investment Management is a licensed fund management business with offices in Hong Kong, Singapore and London. We manage private closed-end real estate funds, and our funds are available to professional / accredited investors or professional clients only.

We mainly invest in the “living” sectors – i.e. purpose-built student accommodation and build-to-rent/multifamily. Our real estate investments are mostly in the UK, mainland Europe and the US.”

Understanding Property Investment Funds & REITs

Real estate investment funds and REITs are companies that own, operate, or finance income-generating real estate properties. These properties can include office buildings, shopping centres, residential complexes, hotels, industrial warehouses, and more.

Both offer investors the opportunity to invest in real estate without directly owning physical properties. Instead, they can buy shares in a REIT or property investment fund, which then uses the invested capital to acquire and manage a diversified portfolio of properties.

Interest rates concept. 3D illustration

What is the difference between Real Estate Investment Trusts (REITs) and Funds?

“REITs are listed, which means shares in a REIT can be traded on a stock market. They must follow quite strict rules on leverage, distribution of rental income, and the percentage of property development they can undertake.

Funds is a more generic term for a collective investment structure and can encompass many different types of structure, that may or may not be regulated or must follow certain rules, depending on where it is based.”

Benefits of Investing in Real Estate Investment Funds

One of the primary advantages is diversification. Property investment funds own a diverse portfolio of properties spanning various sectors and geographical locations, which helps mitigate risk and reduce the impact of market fluctuations on an investor's overall holdings. Additionally, professional management ensures that experts make strategic decisions, manage property acquisition, and optimise returns, utilising their specialised knowledge and resources.

Liquidity is another notable benefit, as certain property investment funds, like REITs and Exchange Traded Funds (ETFs), provide ease of buying and selling on stock exchanges. These funds generate income through dividends or rental income, making them attractive to income-focused investors, while the potential for capital appreciation adds to their appeal.

These benefits, coupled with professional management and lower entry barriers, position property investment funds as a versatile and accessible route to real estate investment.

Risks Associated with Real Estate Investment Funds

Investing in real estate through property investment funds and Real Estate Investment Trusts (REITs) presents numerous benefits, but it's vital to be aware of associated risks.

Market fluctuations can impact property values, and rising interest rates can increase borrowing costs, affecting the performance of both investment vehicles. Liquidity varies among funds, and the effectiveness of fund management can significantly influence returns. Property-specific challenges, such as vacancies and maintenance, must be considered, and regulatory changes can impact taxation and returns.

With REITs, sector concentration and dividend risk should be acknowledged. REITs are also exposed to sector specific challenges such as shifts in consumer behaviour, which can impact retail property performance. To navigate these risks effectively, thorough due diligence is essential, encompassing historical performance, property quality, management expertise, and alignment with financial goals, while diversification across sectors can mitigate specific market-related risks.

What measures are in place to mitigate risk/how secure is my investment?

“The funds that IPIM manages are high risk investments in private equity that are illiquid and could lead to the full loss of capital – which is why they are only available to professional/accredited investors or professional clients.

On the other hand, there are funds aimed at retail investors that may be lower risk. However, the level of risk usually reflects the potential returns.”

Start Investing

The first step when embarking on a new investment strategy should always be research. Begin by educating yourself about these investment options, understanding their potential benefits, and acknowledging the associated risks.

Determine your investment goals and assess your financial situation to get an understanding of the resources you can allocate. Then, choose your preferred investment vehicle: property investment funds offer diversification and professional management, while REITs provide liquidity and flexibility.

Conduct thorough due diligence by researching available funds or REITs, reviewing their historical performance, and assessing the expertise of their management teams.

If you haven’t already done so, open a brokerage account, which will grant you access to trade REIT stocks or ETFs on the stock exchange. Regularly monitor your investments, stay informed about market trends, and be prepared for both short-term fluctuations and long-term growth.

Stock market data growth chart graph investment finance analysis fintech financial district

How does one exit a Fund?

“It depends on the type of fund. If it’s a listed fund (an ETF – exchange traded fund), it can be traded on a stock market. If it’s an unlisted open-ended fund, then daily, monthly, or quarterly trading should be possible – although during times of market turbulence trading in these open-ended funds may be suspended.

For closed ended funds such as those managed by IPIM, an exit at the request of the investor is not usually possible – the investor has to remain invested for the full term of the fund, until the underlying investments are sold.”

With a well-informed approach, property stock investments can offer a rewarding and accessible entry point into the dynamic world of real estate. When making investment decisions, it's crucial to understand the unique benefits and risks, as well as conduct thorough due diligence.

If you are unsure if you would qualify as a professional investor or equivalent, please speak to your financial advisor. If you are a professional investor and would like to get more information on IPIM or if you would like to speak to one of our experienced IP Global consultants about your real estate investment options, get in touch with us and we would be happy to help.

According to the Portuguese Foreigners and Borders Service (SEF), the Portugal Golden Visa program has generated over €7.1 billion in investment for Portugal since it was launched in 2012. Of this amount, over €6.3 billion was invested in real estate.

Question 1: What is the Golden Visa Programme?

Portugal’s Golden Visa programme is essentially a government scheme which offers citizens of non-European Union countries the opportunity to obtain residency – and potentially, citizenship – in Portugal once they have invested in Portuguese property. It is dealt with by the Portuguese Immigration and Borders Service, or the Servico de Estrangeiros e Fronteiras (SEF) and has helped Portugal generate foreign investment and employment in the country.

Porto, Portugal - September 25, 2013: View to Porto riverside. The Douro riverside is full of nice colorful old houses with restaurants to have a small break and enjoy the day.

Question 2: What are the benefits of the Portugal Golden Visa program?

The benefits of the Portugal Golden Visa program include:

  1. The right to live, work, and study in Portugal
  2. Free movement within the Schengen Area
  3. The possibility of obtaining Portuguese citizenship after five years

Question 3: Who is eligible for the Portugal Golden Visa program?

To be eligible for the Portugal Golden Visa program, applicants must be non-EU citizens and must make one of the following investments:

Question 4: How much does the Portugal Golden Visa program cost?

The cost of the Portugal Golden Visa program depends on the type of investment that is made. For example, the minimum investment for real estate is €500,000, and the minimum investment for a capital transfer is €1 million.

Question 5: How to apply for the Portugal Golden Visa program?

To apply for the Portugal Golden Visa program, applicants must submit a completed application form, along with supporting documentation such as a passport, proof of address, and proof of investment. Applications can be submitted online or through a Portuguese embassy or consulate.

Lisbon, Portugal cityscape in the Alfama District.

Question 6: How long does it take to get a Portugal Golden Visa?

The processing time for a Portugal Golden Visa application is typically 2-3 months. However, it is important to note that the processing time can vary depending on the complexity of the application and the workload of the Portuguese Immigration and Borders Service (SEF).

Question 7: What are the requirements for maintaining a Portugal Golden Visa?

To maintain a Portugal Golden Visa, holders must spend at least seven days in Portugal per year. Additionally, holders must renew their visa every two years. To renew their visa, holders must submit proof that they have met the residency requirement and that they have paid the applicable fees.

Question 8: Can I get Portuguese citizenship through the Golden Visa program?

Yes, holders of a Portugal Golden Visa can apply for Portuguese citizenship after five years. To apply for citizenship, holders must meet the following requirements:

  1. They must have held a Portugal Golden Visa for at least five years
  2. They must have spent at least seven days in Portugal per year during the five-year period
  3. They must have a basic knowledge of the Portuguese language and culture
  4. They must have a clean criminal record

Question 9: What are the tax implications of the Portugal Golden Visa program?

The tax implications of the Portugal Golden Visa program vary depending on the applicant's residency status and other factors.

Resident taxpayers in Portugal are subject to Portuguese income tax on their worldwide income. However, there are a number of tax benefits available to resident taxpayers, such as the Non-Habitual Resident (NHR) regime. The NHR regime allows new residents of Portugal to benefit from a reduced tax rate on certain types of income, such as foreign-sourced pension income and foreign-sourced investment income.

Non-resident taxpayers in Portugal are only subject to Portuguese income tax on their Portuguese-sourced income.

It is important to seek professional advice from a qualified tax advisor to understand the specific tax implications of the Portugal Golden Visa program.

Question 10: Is the Portugal Golden Visa program a good investment?

Whether or not the Portugal Golden Visa program is a good investment depends on the individual applicant's circumstances and goals.

The program offers a number of benefits, such as the right to live, work, and study in Portugal, free movement within the Schengen Area, and the possibility of obtaining Portuguese citizenship after five years. However, the program also has some costs, such as the investment requirement and the application fees.

It is important to weigh the benefits and costs of the program carefully before making a decision.

If you are interested in the Portuguese Golden Visa programme, IP Global is happy to help investors through the process. Simply contact us here.

In real estate investment, location is crucial. Manchester and Hong Kong are distinct markets with their own opportunities and obstacles. While IP Global has invested in both, our main focus in 2023 is Manchester. In this comparison, we'll analyse why investing in Manchester's real estate can offer greater financial advantages compared to Hong Kong. 

Where is Manchester? 

Manchester, situated in the North West of England, stands out as a vibrant city known for its rich industrial history, diverse culture, and economic prowess.  

With a population of over half a million residents, it is a bustling urban centre and serves as the UK's second-largest economic hub outside of London. Manchester's impressive economic strength is underpinned by its thriving business ecosystem, boasting a range of industries, including finance, technology, and healthcare.  

The city is also renowned for its contributions to music, with famous bands such as The Smiths and Oasis originating here, and its world-class sporting scene, home to iconic football clubs like Manchester United and Manchester City.  

This unique blend of history, culture, and economic vitality makes Manchester an attractive destination for residents and investors alike. 

Map of United Kingdom. Detail from the World Atlas. Selective Focus.

What is Manchester famous for? 

Manchester is known for: 

These factors collectively make Manchester an attractive destination for property investors, including those from Hong Kong. 

Aerial view of Old Trafford Stadium, home of Manchester United Football Club in Manchester, England, UK

How Does Manchester Compare to the Hong Kong Real Estate Market? 

There are 5 key questions to ask when assessing the real estate market of Hong Kong compared to Manchester, lets explore them below. 

  1. Is Manchester more affordable than Hong Kong for property? 

Manchester boasts a significantly lower cost of living and housing compared to Hong Kong. The affordability factor in Manchester is a game-changer for real estate investors.  

We'll delve into the numbers and showcase how your investment capital can stretch further in Manchester, allowing you to purchase larger properties or diversify your investment portfolio. 

According to Numbeo, the cost of living index in Manchester is 57.1, while the cost of living index in Hong Kong is 100. This means that the cost of living in Manchester is nearly half that of Hong Kong. 

The difference in housing costs is even more dramatic. The average price of a flat in Manchester is around GBP200,000, while the average price of a flat in Hong Kong is over HKD10 million.  

This means that you can buy a much larger or more luxurious property in Manchester for the same amount of money that you would spend on a small apartment in Hong Kong. 

An aerial photograph of the Victorian Sackville Street buiding set against the more modern urban architecture in Central Manchester, England. The photograph was produced on a bright sunny day with clear blue skies

  1. How do the rental yields compare between Manchester and Hong Kong?

Manchester generally offers more favourable rental yields compared to Hong Kong. Manchester's rental yields are higher due to its comparatively lower property purchase prices and the strong demand for rental properties, particularly in areas with a significant student and young professional population.  

However, it's important to note that rental yields can vary within Manchester and Hong Kong based on factors such as location, property type, and market conditions. 

For the most up-to-date and accurate information on rental yields in Manchester and Hong Kong, I recommend consulting recent real estate market reports, speaking with local real estate experts, or checking reliable real estate websites.  

Market conditions can change over time, and it's essential to have the latest data when making investment decisions. IP Global offers free consultations if you’d like to learn more about yields in both markets. 

Interest rates concept. 3D illustration

  1. Is the Hong Kong property market more stable than Manchester?

Hong Kong's real estate market is renowned for its unique dynamics. Historically, it has shown remarkable stability and steady growth. However, it's important to note that this market can be influenced by external factors, including global economic conditions and government policies.  

As a result, property prices in Hong Kong have been known to experience periods of rapid appreciation followed by adjustments. 

In recent years, Hong Kong has implemented measures to curb property speculation and promote housing affordability, which can impact the rate of growth and stability. While long-term growth prospects remain promising, investors should carefully monitor regulatory changes and global economic trends when considering investments in this market. 

Manchester, on the other hand, offers a real estate market characterized by steady growth and relative stability.  

The city has experienced consistent economic development and population growth, supported by a diversified economy, including sectors like technology, healthcare, and education. This economic stability has contributed to a resilient property market. 

Investors in Manchester benefit from a market that has shown a history of steady appreciation and rental income growth. 

 While it may not offer the same level of rapid appreciation as Hong Kong, it tends to be less volatile and is considered a lower-risk option for those seeking a balanced investment approach. 

  1. Is Manchester a better option to diversify my portfolio than Hong Kong?

The cost savings in Manchester give your investment capital greater flexibility. In Manchester, you can purchase larger properties or expand your investment portfolio by buying multiple properties, all at a much lower cost compared to Hong Kong. 

For example, with the same budget, you could potentially acquire four two-bedroom units in The Bailey, a prime location with strong rental growth potential, just a short 15-minute walk from Deansgate. In Hong Kong, your budget might only cover a single apartment. 

This approach is also less risky. If one tenant defaults, you'd only miss out on 1/8th of your income rather than the entire month's rent. To diversify even further, you can spread your risk across a variety of property types and potential income sources. 

For instance, with an investment capital of HKD 10 million, you could potentially purchase five apartments in Manchester, spanning across growing areas like Salford, Trafford, and the city center. In contrast, in Hong Kong, your budget might only secure a much smaller unit in a less central location. 

An image of the exterior of The Bailey - A new development in Manchester

  1. How does the regulatory environment compare between Manchester and Hong Kong?

For real estate investors, understanding the regulatory landscape is paramount as it can significantly influence the feasibility and profitability of investments.  

Manchester boasts a relatively investor-friendly regulatory environment. The United Kingdom, in general, has a transparent and well-established legal framework for property transactions. 

 Property ownership is secure, with clear property rights, well-defined leasehold and freehold tenures, and strong legal protections for both landlords and tenants. 

Additionally, the UK has an efficient land registry system that ensures property ownership records are accurate and easily accessible. This transparency simplifies due diligence processes, making it easier for investors to assess property titles, encumbrances, and ownership history. 

In contrast, Hong Kong's real estate market is renowned for its complexity and unique regulatory challenges.  

The city's property market is influenced by various factors, including government interventions aimed at cooling property prices and addressing housing affordability issues. These interventions can take the form of stamp duties, land supply policies, and lending restrictions. 

Navigating Hong Kong's property regulations often requires a deep understanding of the market and frequent monitoring of government policies. The government's approach to land allocation, development, and urban planning can significantly impact property values and investment prospects. 

Manchester, UK - May 18 2018: Light rail Metrolink tram in the city center of Manchester, UK. The system has 77 stops along 78.1 km and runs through seven of the ten boroughs

The real estate market in Manchester has piqued the interest of savvy investors seeking opportunities that match their financial objectives. While Hong Kong has its attractions, Manchester presents a practical choice for those aiming to optimize their real estate investments. 

In summary, though Hong Kong's real estate market is undeniably attractive, it's wise for investors to explore Manchester as a strategic and financially rewarding option. With its affordability, stability, and potential for substantial returns, Manchester's real estate scene provides a strong case for investors in search of a sensible and prudent investment location. 

If you have any questions about the above information, please reach out here and we’d be happy to help. 

If you're considering entering the world of property investment or looking to expand your existing portfolio, understanding the intricacies of buy-to-let mortgages is essential. With the UK's ever-evolving property market, choosing the right mortgage can significantly impact your investment's success. In this blog, we'll walk you through the key types of buy-to-let mortgages available, helping you make informed decisions and navigate the path to property investment success.

What is a buy-to-let mortgage?

A buy-to-let mortgage is a specialised type of mortgage loan designed for individuals who want to purchase a residential property with the primary purpose of renting it out to tenants. In the UK, this form of mortgage is specifically tailored for property investors and landlords.

Studios to let sign in London

Who can get a buy-to-let mortgage in the UK?

Not everyone is eligible for a buy-to-let mortgage, and lenders have specific criteria that applicants must meet. Here's an overview of who can typically qualify:

Individuals: Most buy-to-let mortgages are available to individual investors who want to purchase and manage rental properties. Lenders assess an individual's financial situation, including their credit history and income, to determine eligibility.

Limited Companies: Limited companies or special-purpose vehicle (SPV) companies set up for property investment purposes can also apply for buy-to-let mortgages. Lenders evaluate the company's financial standing and creditworthiness.

Experienced Landlords: Lenders may have products specifically designed for experienced landlords with a proven track record in property investment. These landlords may have access to more favourable terms and rates.

First-Time Landlords: While it is possible for first-time landlords to obtain buy-to-let mortgages, they may face stricter lending criteria. Some lenders require first-time landlords to have a minimum income floor.

Creditworthiness: Lenders assess the applicant's credit history and credit score to gauge their ability to manage debt responsibly. A strong credit history is usually a prerequisite.

Age Restrictions: Some lenders may impose age restrictions on applicants, requiring them to be within a certain age range, often between 18 and 75 years old, at the time of application.

Property Type: The type of property being purchased can also influence eligibility. Lenders may have preferences or restrictions regarding property types, such as HMOs (Houses in Multiple Occupation) or holiday lets.

Mortgage loan, House model with agent and customer discussing for the contract to buy, get insurance or loan real estate or property.

How much can you borrow for buy-to-let mortgages? 

The amount you can borrow for a buy-to-let mortgage in the UK depends on various factors, including the lender's criteria, your financial situation, and the property you intend to purchase. Here are some key considerations that influence the borrowing amount:

Loan-to-Value (LTV) Ratio: The LTV ratio is the percentage of the property's purchase price that you can borrow. In buy-to-let mortgages, the LTV ratio often ranges from 60% to 75%, meaning you would need to provide a deposit of at least 25% to 40% of the property's value.

Your Financial Situation: Lenders will assess your personal financial situation, including your credit history, income, and expenses. They want to ensure that you can afford the mortgage payments and have the financial stability to handle any unexpected costs.

Property Type: The type of property you intend to buy can also impact the amount you can borrow. Some lenders may have restrictions or different criteria for certain property types, such as HMOs (Houses in Multiple Occupation) or properties with commercial elements.

Lender's Criteria: Different lenders may have varying criteria and lending policies. It is essential to shop around and compare offers from different lenders to find the one that best suits your needs. There are many tools available to easily compare buy-to-let mortgages such as:
- Compare the Market
- Uswitch
- Money Supermarket

Your Other Financial Commitments: Lenders will consider your existing financial commitments, such as other mortgages, loans, or credit card debt, when determining how much you can borrow.

Coin stacks and chart graphs on a chessboard background. Horizontal composition with selective focus and copy space.

Standard Buy-to-Let Mortgage

Standard buy-to-let mortgages are the most common type of buy-to-let financing in the UK. They are designed for property investors who plan to purchase residential properties with the primary aim of renting them out to tenants, typically unrelated to the property owner. Here are key features of standard buy-to-let mortgages:

Property Investment: Standard buy-to-let mortgages are used for pure property investment purposes. They are not intended for properties where the owner or their family members will reside.

Rental Income: Lenders assess your eligibility based on the property's potential rental income, ensuring it is sufficient to cover the mortgage payments.

Deposit: Standard buy-to-let mortgages usually require a significant deposit, often around 25% to 40% of the property's purchase price. The specific deposit amount depends on the lender's criteria and the borrower's financial circumstances.

Interest Rates: Interest rates on standard buy-to-let mortgages can vary, with options for fixed-rate and variable-rate mortgages. Fixed-rate mortgages provide rate stability for a set period, while variable-rate mortgages may change with market conditions.

Affordability Assessment: Lenders conduct affordability assessments to confirm that the projected rental income, along with the borrower's financial situation, allows for comfortable mortgage repayments.

Regulations: Standard buy-to-let mortgages are subject to buy-to-let-specific regulations, including tax rules and responsibilities as a landlord. Familiarity with these regulations is essential for property investors.

Standard buy-to-let mortgages are widely available from various lenders, making them a popular choice for investors. When considering this type of mortgage, it is crucial to carefully assess your investment goals, financial situation, and property choices to ensure you choose the right mortgage product for your needs.

Exterior of new build apartments in Hornsey, North London

Family or Regulated Buy-to-Let Mortgages

Family buy-to-let mortgages, also known as regulated buy-to-let mortgages, are designed for individuals who plan to rent out a property to family members, such as children or parents. These mortgages are subject to different regulations and criteria compared to standard buy-to-let mortgages.

Regulations: Regulated buy-to-let mortgages are subject to the same regulations as residential mortgages, offering tenants additional protections. This includes affordability assessments and the requirement to meet specific lending criteria.

Applicability: These mortgages are primarily intended for situations where family members are the tenants, and the property will not be rented out to unrelated third parties.

Key Points: When opting for a regulated buy-to-let mortgage, it is essential to ensure that you comply with the regulations and lender criteria, as they may differ from standard buy-to-let mortgages. Additionally, these mortgages may be less common, and not all lenders offer them.

It is important to note that if you plan to rent out the property to unrelated tenants or use it solely for investment purposes, you will typically require a standard, unregulated buy-to-let mortgage. This type of mortgage has different criteria and regulations, so it is crucial to choose the right category based on your specific property investment goals and tenant arrangements.

Mortgage loan agreement application with key on house shaped keyring

HMO Mortgage

An HMO mortgage, or House in Multiple Occupation mortgage, is a specialised type of buy-to-let mortgage designed for properties that are rented out to multiple tenants, each with their own separate tenancy agreements, and typically sharing communal areas such as the kitchen and bathroom. HMOs are subject to specific regulations due to their unique nature, and HMO mortgages are tailored to accommodate these properties. Here are key features of HMO mortgages:

Property Type: HMO mortgages are specifically intended for properties classified as HMOs. An HMO is defined as a property rented by at least three people who are not from the same household but share common facilities. This can include student houses, shared accommodation for professionals, and more.

Regulations: Due to the increased complexity and unique considerations of HMO properties, lenders offering HMO mortgages may have stricter lending criteria. Additionally, landlords of HMOs must comply with specific legal obligations and safety standards, such as fire safety regulations and mandatory licensing in certain areas.

Licensing Requirements: Some local authorities require landlords of HMOs to obtain licenses. Lenders offering HMO mortgages may consider whether the property is licensed or whether the landlord is in the process of obtaining the necessary licenses.

Specialised Valuations: Valuation of HMO properties can be more complex, and lenders may conduct specialised valuations to assess the property's worth.

Interest Rates: Interest rates on HMO mortgages can vary, with options for both fixed-rate and variable-rate mortgages.

Tenant Profiles: Lenders offering HMO mortgages may consider the type of tenants in the property, such as students or professionals, when assessing the mortgage application.

Management Requirements: Lenders may inquire about the landlord's experience and management plan for the HMO, as managing an HMO property can be more demanding than a standard buy-to-let property.

HMO mortgages are suitable for property investors interested in managing properties with multiple tenants and potentially higher rental yields. However, due to the additional regulations and management requirements associated with HMOs, it is crucial for investors to thoroughly research and understand their obligations as landlords of HMO properties and to work with lenders experienced in HMO financing.

Buy-to-let can be a rewarding investment strategy, but it is not without its challenges. Understanding the different mortgages available is essential for success. Remember to conduct thorough research, seek professional advice when needed, and carefully consider your financial situation before embarking on your buy-to-let journey. With the right knowledge and strategy, you can make informed decisions and build a successful property portfolio in the UK.

 

There has been a recent surge in Hong Kongers buying up UK property, as recently mentioned in the Telegraph by IP Global Director, Jonathan Gordon. This surge in investment can be attributed to a combination of factors, including concerns about political uncertainty, the implementation of the BNO visa, the pursuit of quality education, and the allure of a stable and resilient UK real estate market. This blog post provides a glimpse into the 5 key UK property investment opportunities that we have collated appealing to our Hong Kong clients.

What is BNO?

BNO stands for British National (Overseas). It is a status granted to British subjects who were born in Hong Kong before the handover to China in 1997. BNO holders are not British citizens, but they have the right to live, work and study in the UK.

In July 2020, the UK government announced a new immigration route for BNO holders and their dependents. Under this route, BNO holders can apply for a visa to live and work in the UK for 5 years. After 5 years, they can apply for permanent residency, and after a further year, they can apply for British citizenship.

The new immigration route has been welcomed by many Hong Kongers, who are concerned about the erosion of their freedoms under Chinese rule. The UK government has said that the route is a way to show its support for Hong Kong and its people.

man handing new post Brexit blue British passport Devon, United Kingdom, January, 2021.

Hong Kongers relocating to the UK tend to gravitate towards several key areas, driven by a variety of factors. London, with its global financial hub status, is a primary destination, particularly for those seeking employment opportunities in finance, technology, and other industries. Additionally, Hong Kong immigrants often choose to settle in the suburbs surrounding London, where they can enjoy a high quality of life and easy access to the city for work and leisure.

Cities with notable universities like Oxford and Edinburgh also attract students and academics from Hong Kong, making these cities popular choices.

Beyond the South East, cities like Manchester and Birmingham offer vibrant communities and growing job markets, drawing Hong Kongers in search of diverse opportunities.

Ultimately, the areas chosen for relocation often align with individual preferences and priorities, but these regions consistently stand out as attractive destinations for Hong Kong immigrants looking to establish a new life in the UK.

3 BNO investment opportunities in 2023

Below is the list of investment opportunities that appeal to our Hong Kong investors the most.

1. Investing in property in Oxford for Hong Kongers

It can be a challenge to get property in Oxford. The city's popular with tourists and has a lot of students, which pushes up the demand for housing. Consequently, Oxford has some of the UK's highest property prices. The city's strict heritage preservation rules also make it difficult to get permission for building or renovating properties. If you're thinking of investing, keep in mind that rental yield is not particularly strong in this region but that is because the real value comes from property price growth. In fact, predictions say that from 2022 onwards, Oxford's housing prices will jump by 26%, beating the expected 21% average growth in UK house prices from 2022 to 2032.

Best Property Investment in Oxford for Hong Kongers: The Stormont

The Stormont is an exclusive collection of eight new luxury residences situated in Oxford's sought-after Headington neighborhood. These homes are thoughtfully designed to blend modern aesthetics with the surrounding architectural style, featuring top-notch finishes, elegant fixtures, and contemporary kitchens equipped with fully integrated appliances.

This development boasts an ideal location, with convenient access to nearby parks and essential amenities. Additionally, it is surrounded by educational and employment hubs, including the proximity of the Oxford Brookes University main campus, Oxford University Old Road campus, and various primary and secondary schools. Residents at The Stormont can easily commute on foot, by car, or via a short bus ride connecting them to the city center and beyond.

For more information take a look at the development brochure here.

2. Investing in property in Edinburgh for Hong Kongers

Edinburgh is the capital of Scotland and is a popular investment destination for Hong Kong buyers. The city has a number of strengths that make it attractive to investors, including:

Best Property Investment in Edinburgh for Hong Kongers: The Carrick

The Carrick is a new development in the southwest of Edinburgh, offering 27 one-, two-, and three-bedroom apartments spread across 5 floors. It's conveniently close to public transportation, providing easy access to the city's amenities.

The apartments are designed to be well-lit and spacious, featuring modern amenities. Many of them come with Juliette balconies, while the penthouse units include roomy terraces. The surrounding area offers golf courses, parks, and sports facilities for leisure and fitness activities.

To download the brochure, click here.

3. Investing in property in Manchester for Hong Kongers

Hong Kong investors are drawn to Manchester's property market due to its relative affordability compared to other major UK cities like London. The city offers stable rental income potential, strong capital growth prospects, and a growing job market, making it an attractive destination for real estate investment. Additionally, the presence of reputable universities and a diverse culture further contribute to its appeal for both students and professionals, driving demand for housing.

Best Property Investment in Manchester for Hong Kongers: The Bailey

The Bailey consists of 104 contemporary one- and two-bedroom apartments, nestled adjacent to St Georges Park and offering views of Deansgate to the northeast. Its proximity to Manchester Metropolitan University and The University of Manchester, just a mile away, makes it especially appealing to the large student population that drives Manchester's strong rental market, ensuring its anticipated popularity among tenants.

To download the brochure, click here.

Conclusion

These are just a few of the many investment opportunities available to BNO investors in 2023. It is important to do your own research and to choose investments that are right for your individual financial situation and risk tolerance. If you are thinking of investing in the UK and would like some professional advice, reach out to one of our experienced property experts here.

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