Investments
Managed diligently, property investment can offer exceptional returns. With the stock markets around the world in turmoil, pension funds seeing fund value falls of 30%+, and with the increased likelihood of pension shortfalls, a growing number of people are turning to property investment. As experienced investors, UKPA believe property continues to represent a safe investment - providing that the risks are minimised.
We believe the UK and European Buy-to-Let (BTL) property sector will continue to grow and become increasingly profitable due to:
- A shortage of new homes being built
- An increase in demand due to socio-economic influences including:
- Increasing divorce rates and an increase in single person households
- A more transient work force
- First time buyers not being able to get on the "property ladder" due to increased property prices
- Increase in life expectancy
With all factors considered, TODAY is an ideal time to invest in the property market
COMPOUNDING
Compounding is the year on year growth of investments and widely considered the strongest investment tool. A property purchase allows investors to maximise leverage; the investor typically only has to invest a small proportion of the investment from his own pocket - the balance being funded via a mortgage.
Most traditional investments, (such as shares), require the investor to have liquid funds to the full value of the investment. In our scenarios, we put the minimum deposit down BUT gain maximum leverage. As you will see from the examples below, the growth potential is astounding:
In a purchase of a £200,000 off-plan property, the investor would typically put down 5% of the purchase prices, e.g. £10,000. If the build time to completion is 24 months and property is rising at 10% pa, the property will should be worth approximately £240,000 upon completion. If the investor has actually only paid £180,000 (taking into account the 10% discount UKPA have negotiated on his/her behalf), the paper profit upon completion is £60,000. This was all achieved by giving a deposit (which is refundable upon completion) of £10,000. What other business affords these returns?
MAXIMISING RETURNS
We offer an outstanding diversity of investment opportunities across the UK and Europe - including France , Spain , Portugal and the Czech Republic - giving investors the option of developing their portfolios or making further profits through reselling. All investments must pass our strict investment criteria:
- We negotiate low deposits (usually 5% or less) that are required by the developer upon exchange of contracts. Most other investors will be required to put down a minimum of 10%.
- There must be substantial instant equity on each property that is purchased. This is as a result of the discounts we have negotiated on behalf of investors.
- Each area in which we offer investment opportunities must demonstrate a strong rental market and sufficient rental yield.
- The locality must be seen as offering potential significant capital growth.
Investors have exclusive access to extremely competitive finance packages that minimise the amount of capital that is required to be tied up in the deal.
As most of the property we offer is off-plan, (purchased before, or during building), there is usually a further increase in value before completion. For example, if you purchased a property off-plan, with an anticipated build time of 24 months for an ‘open market' price of £100,000, UKPA will have negotiated a 15% (£15,000) discount off this price, therefore you would only pay £85,000. If property prices increase by 10% pa over the 24 month build time the market price, upon completion, would be in excess of £120,000 and with built-in equity of over £35,000.
Our team of professional property finders, finance brokers, solicitors and accountants are all extremely knowledgeable in the field of property investments, (and many are seasoned investors themselves), and will help you to maximise your profits.
PROPERTY - THE FACTS
- Since 1956, the compounded average annual house price increase was 9.5% (source: DataStream)
- Over the last 18 months, there has been outstanding capital growth in the UK housing market (26%+ in 2003), with property growth doubling every 6.2 years on average
- In 2004, the market is still seeing double-digit growth, despite predictions of the market slowing down
- The UK buy-to-let property market now represents only 11% of the housing market. ARLA predicts that this figure will rise to 20% by 2020.
- Fewer new houses are being built than at any time since the 1920s.
- More millionaires in the UK have made their money from property than any other individual investment source.
- Presently, there is a housing shortage in the UK with demand for new homes outstripping supply. In 2001, over 250,000 new properties were completed and 310,000 new households were created
- Rents have risen on average 13% pa since 1962 (Office of National Statistics)
- Over the last 32 years, property has risen in 28 of the years and only fallen in 4.(Dept. of Records)
- The National Builders' Federation says that about 60,000 more households are being created annually, than there are homes to accommodate them
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