The boom in buying British properties continues, but many people in Hong Kong have seen the advertisements of London and Manchester properties. Is it just a city choice to buy a British property? Of course not! Except for the well-known cities in England, Scottish properties are actually quite attractive, especially low-priced properties.
The benefits of low-priced properties
In fact, there is no specific definition of properties commonly known as low-priced properties. In Hong Kong, everyone has a consensus to refer to properties below HK$5 million. What about British properties? According to our general knowledge, a UK property under about £100,000 can be called a low-priced property.
Of course, the most intuitive reason is that you can pay less stamp duty or even not pay the stamp duty, if you buy a low-priced property. Take Scotland as an example. Properties under £40,000 are not subject to stamp duty, while properties under £40,000 – 125,000 are only subject to 4% tax.
In addition, the unit price of a low-priced building is low, so buyers can buy more and diversify their investment. Buyers can collect more rental income, compared with an expensive building.
Looking at the Rightmove example, you can buy a building in London for £400,000. The monthly rent is £647, and the rental return rate is 1.9%. Even if you rent it out at £1,000, the rental return rate is only 3%. Yet compared to Scotland, a £45,000 building has a rental income of £500 and a rental return rate of 12%. The annual cash flow of the two markets is only £1,764, but buying a property in London is almost ten times more expensive than buying a low-priced property in Scotland.
Considering the number of rebates, in fact, buying a cheaper-priced property will definitely be more worthwhile and the return would be higher than buying a property in first-tier big cities like London or Manchester. What's more, you can buy several low-priced buildings with the same amount of money, and the combined returns and cash flow are higher.
Why buy a flat? What are the benefits of buying a flat?
The prices of most flat/apartments in the UK are generally low, which meets our definition of a low-priced flat. What are the benefits of a flat?
In order to facilitate convenience to work, and the flat rent is affordable, not many family customers and office workers will choose to rent. It is no exaggeration to say that it is the most popular type of housing in the UK. Moreover, renting a flat is cheap and good quality, and it is less burdensome for the tenant, given the risk that the tenant cannot pay the rent is also low.
Of course, there are not many British people who live in houses or terraced houses, etc. However, flats has a larger target group, and relatively speaking, the rental rate of return will be higher, as it can reach an annual return of 8-10%.
Why don't people buy cheap flats?
In fact, it's not because people won't buy it, it's only because fewer locals will buy it.
Compared with Chinese or even Asians, who have to buy a house unconsciously, and buying a house is not necessary for many British people. Most of salary is used for fun, travel and other expenses. Fortunately, most people have no tendency to buy a flat, and many rented flats have been rented out. Therefore, the UK rental market is booming, and there is still a certain amount of supply of low-priced properties in the UK property market.