The legal aspects & financial attractiveness of real estate in the UK

uk real estateDespite the apparently high costs, the UK property market is one of the most liquid markets in the world. Particularly in London, investing in real estate could be the best antidote to falling prices, a hedge against inflation and obtaining capital gains.

The demand for real estate has always been driven by the UK, first, because of the country’s small territory – only 1,000 miles from north to south and 400 miles from east to west. The growing needs for housing development in population of England must be in permanent balance with the need to preserve the countryside and green parks. Thus, governmental policy promotes substituting industrial areas with green field sites, located outside the city. Depending on the area, where transformations are expected, the grant can be provided to clean the territory. In addition, the environmental concerns contribute to the requirements for its research that is undertaken in respect of history of a particular property, and where the land itself may be dumped. Essentially, the current legislation can be held liable for contamination that occurred many years ago, despite the fact that it became the result of the efforts of the previous owner.

The current economic situation in the world makes the UK real estate market even more attractive. The population of Great Britain has been steadily increasing, while the number of construction of houses and apartments in Britain lags behind the demographic situation. The state of affairs is exacerbated by a shortage of housing against the background of a huge influx of foreign workers: the protracted crisis in conjunction with progressive unemployment drives people to change the residence for more economically prosperous countries in search of work. Thousands of people in London every day are turning to employment agencies in search of housing apartments for rent. In this regard, investment in real estate the UK always bring stable rental income. At the moment conveyance solicitors admit the fact the pricing has reached its historical peak.

Referring to the Land Law of Great Britain (which also regulates the UK real estate market), you will find that the basic concepts here have not changed since the time of William the Conqueror, when in 1066 he laid the foundation of the system, which the country is genuinely proud of, and for the foreigner it is, as a rule, the subject of genuine bewilderment and incomprehension. However, stability of the area is another factor that drives interest to the sector. By law, all land in England and Wales belongs to Her Majesty Queen Elizabeth II, and all the other mortals have only the unconditional right to use of land and buildings located on it. Freehold form of ‘ownership’ is very similar to the international practice concept of tenure, which can be called ‘ownership’ and so, if you own real estate in freehold rights, you become the full owner of real estate buildings located on this land you are free to enroll in any operations with your property, it is only necessary to coordinate your actions with local authorities.

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The overview of budget real estate against the background of luxury housing in London

london-housingWhile in London a deficit of real estate of around 30% is observed, which is not able to cover the demand, but the real estate market in the capital is ready to offer a wide price range of residential properties, busting the myth of the inaccessibility of the apartments in the UK. The price is affected by a number of factors, first and foremost – the district, the area, number of floors, parking, transportation, proximity to cultural, entertainment and public facilities.

Budget properties in London is not a myth, such an option can be purchased by selecting residential buildings in east London. It is a kind of industrial area with mostly English-speaking population neighbourhoods. In East London the entire neighborhoods with typical bedroom apartments were built, which have a greater similarity with the French suburb housing. The city center is in 1 hour drive approximately, and that’s one of the main factors affecting the overall cost of the apartment. To date, one-bedroom apartments in the area can be bought for £180,000, while the two bedroom options start from £220,000. However, this is not the final price – more less significant expenses may be associated with property condition evaluation, legal services (all the deals are made through conveyance solicitors) and other aspects should be taken into account.

Many investors purchase the entire buildings with small-sized rooms in the suburban parts of London for recoupment through the rent, allowing to gather around 3 – 5% (at the time of 2014). Another category of buyers – the parents of students and students of London universities in need of proper housing. About 60% of transactions in the budget flats was recorded to parents or close relatives. Moreover, even in spite of the relatively low cost of such apartments they are constantly increasing in their cost. The owners of such apartments are able to bring up to 7% of annual income when making a transaction on resale.

However, both, who invest their own money in real estate capital of the UK, make up a large percentage of buyers of luxury real estate in London. According to Knight Frank statistics, the property objects priced at £1.5 – 2ml are primarily acquired by CIS residents.

The price for luxury apartments and townhouses located in the fashionable districts of the capital, which are close to the center, the so-called, Prime Central London, start from £5ml. Thus, for example, a 3 bedroom apartment with balcony and parking lot costs at least £7 million in Belgravia – the most expensive district in London, which has managed to sell more than 26.61% of transactions above £10 million.

The average price of London real estate in the fashionable areas varies widely. The peak performance falls to Mayfair and Belgravia, as well as Chelsea and Knightsbridge. Approximately 30% more affordable residential apartments are located in the elite areas of Regent Park and Hampstead – the top 10 regions that sold 8.15% and 3.4% of elite property objects the price of which has gone beyond £10 million.

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