Bold moves to fix the broken housing market are among the New Year resolutions for the British government.
Communities Secretary Sajid Javid told a group of housing professionals in London about the need to build new homes. He also mentioned that a single housing ombudsman could be introduced for homeowners, buyers, landlords and tenants. A single ombudsman for housing could drive up standards across the industry and give consumers better protection.
Other proposals for 2018 including making sure more land is available for housing and maximising the ability of cities and towns to build new homes while also protecting the Green Belt. In the recent Budget, the government proposed £44 billion in capital funding, loans and guarantees over the next five years and a new National House Building Fund. The aim is to raise the number of new houses built to an average of 300,000 a year by the mid-2020s.
New-builds can be interesting property investments, and there are many great off-plan developments which are in the right locations and have the long-term potential for growth. Obviously, investing in off-plan projects means they are not ready for tenants to move in but the value of the property could change. Also, the property will be built to high standards regarding energy-efficiency, for example. Investing in older properties could mean that work needs to be carried out so they are fit to be let out and meet the regulations.
Research is crucial, as you will need to look at the location, potential tenants, yields and the developers themselves. Do the developers have a good reputation and track record? Also time-scales need to be factored in. A development which will be ready in a few months is more attractive than one which won’t be ready for a few years. A lot can change in terms of rental demands and housing needs in that time. However, the earlier you can buy off-plan, the better the price will be, and so there is always a trade-off between the advantages and risks involved.
Certainly, new-builds have lots of potential if the deal is right, they are in the right location and the yields look attractive to investors. Some new-builds are also targeted at a particular sector, such as students or over-50s, which is another attraction because there will always be a demand for these types of accommodation.