The ultimate UK property investment guide

UK property investment

Buying an investment property has been a popular choice for years, and the current demand for rental properties is higher than ever before due to a rise in house prices. If you’re in a position to invest in property, it can be a beneficial asset to have. The following UK property investment guide explains what you should consider before purchasing a property.

Things to consider for UK property investment:


Research the areas that you’re considering purchasing your investment property. You should consider the strength of the location, the rental yields that are on offer, the level of demand, and the potential for capital growth. It’s also important to look into areas that have positive predictions for price growth and a proven record of investment success.

The next thing to figure out when you’re looking for an investment property is who you want your ‘ideal’ tenant to be. This will help you determine things such as the type of property you purchase, house or flat, and whether you purchase in an urban or rural area. For example, if you want a young professional, are there good transport links? Or if you’d prefer a family, are there local schools nearby?

Asset type

Once you’ve decided on the location you want your property to be in, you can start considering different types of properties. There are several main types to chose from, each with its own strengths and drawbacks, including:

Off-plan properties – These are properties that are yet to be completed, so still in the planning or development stages. This is often a popular investment type due to the potential for capital growth, lower costs, and the appeal of a new build property. These are also often offered at a lower price in order to attract investors.

Refurbished property – These properties are typically historical or period properties that have been renovated in order to meet modern standards. These can be popular with investors who prefer the charm and character of older buildings and want to put their own imprint on them.

Residential property – These properties are in high demand as, due to the rising house prices in recent years, young professionals are struggling to buy property and so are renting for longer periods of time.

Student property – As more and more students head off to University, the demand for student rentals is ever increasing. The average rental yield is also climbing, so it’s definitely a good investment. Students are often considered to be good renters too, as they have respect for the landlord as they see them as an authority figure. If you’re planning on renting to students, ensure that the property either has good transport links or is close to the University/City Centre.

Buy to Let mortgages

If you wish to invest in a house or flat, you may be eligible for a ‘Buy to Let’ mortgage. There are a few conditions to these, you must understand the risks involved and be able to afford to take them, you must have a good credit history and own your own home (whether outright or with a mortgage).

The loans themselves tend to be more expensive, have a higher interest rate, and require a larger deposit. As with a mortgage for buying a house for yourself, there are a variety of different options.

Fixed-Rate mortgage

For buy to let mortgages, these are only usually 2-3 years in length. The mortgage rate is fixed for a set amount of time, regardless of whether the lender’s standard variable rate (SVR) changes or not. Once your fixed term is over, the mortgage will be transferred over to a Variable Rate Mortgage, which uses the lender’s SVR to track your interest rate.

What returns can you expect?

Some investors will seek short-term gains, while some will look for an investment that provides a return over the medium to long term and it’s important to know where you sit on this scale.

Unless you intend to flip property (i.e buy a property and add value by means of refurb before selling on at a higher price), property investment is very much a medium to long term strategy.

The real value in property investment is in holding the asset and enjoying the long-term capital growth that can be achieved. However, that doesn’t mean that you won’t benefit from notable returns in the short term too.

Yield vs. capital growth

Many investors believe that when it comes to property they have to choose between targeting a long-term approach such as strong capital growth, and a short-term option such as high annual yield.

However, this isn’t necessarily the case, and with the right investment, you can absolutely achieve both of these objectives in property.

There are of course numerous other decisions to be made when becoming a property investor if it is your first time but choosing between immediate yield and overall growth doesn’t have to be one of them.

Some investors will solely target annual yields in order to earn higher interest rates than that offered by banks and some will invest with the longer term in mind and the capital growth that can be achieved through property investment.

Both of these approaches have their merits depending on what you’re looking to achieve.


There are certain fees that apply when investing in a property, and you should be aware of them before going ahead. One of the main ones being that you will have to pay a higher stamp duty for a property that is not your main home.

Any gains that are made must be declared on your self-assessment tax return and will be included when working out your status for the year, which may push you into a higher tax bracket. The income that you receive as rent will also liable for income tax and should also be declared on your self-assessment tax return for the year in which it was earned. The percentage that you will be taxed will depend on your income tax band.

However, you will also have to factor in the cost of both rent and landlord insurance, letting agent fees, and any maintenance to the property as this will be your legal responsibility.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Getting Money Wise. The information provided on Getting Money Wise is intended for informational purposes only. Getting Money Wise is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

getting money wise

Welcome! Get your FREE access to EVERYTHING we publish…

Our goal is to show anyone how to make investing profitable. You’ll get our FREE weekly newsletter with latest news and information on investment topics along with special offers. Please take time to read our privacy policy . The information you provide us will be processed in accordance with this.