Don’t Invest Without Understanding the Risks of UK Property
Where do I begin? Article 4, selective license or certificate of lawful compliance of a block of flats. There are so many unknowns that can burn a UK property investor. ie Article 4 limits the hmos in an area…selective license is imposed on landlords by the council and certicate of lawful compliance is mandatory if own wants to rent out a block of flats in Blackpool. We went through the process on a block of 8 units however a building of 4 in which we wanted to buy we were denied by the counicil. We exchanged subject to and applied for the lawful certificate.
With Property investments in the UK there is inherent fragmentation of these asset types results in heightened difficulty when evaluating their relative risks. People think it is simple, just buy a terraced house and rent it out. Then covid came in and working tenants could get away with not paying for a years worth of rent. Good luck collecting or even evicting. That is an inherent risk. Owning and managing properties is a hassle. And that adds to the risk. One way to reduce risk is to gain knowledge and experience. When I did my first flip in 1994, I didn’t know what I didn’t know. When I started investing in the UK in 2014, I did not even know what were building regs.
However I had a neighbor who owned 800 social housing properties and rented them to the Home office. These properties were on long contracts…no voids…and no managment. This was an ideal way to invest. This is what I started on in 2014 and found a local Manchester JV partner whom I have done more than 150 social hmos. We keep some and sell some as the banks do not like lending on them.
Having the govt as your tenant gets rid of one of the biggest risks of not being paid.