Hey welcome back. Do you want to learn how to invest in real estate in the UK?
Let's talk about it. Hey friends, Stephen Michael Miller here and we're here
today to talk about buying real estate in the UK. So, if you're from the UK, then
tune in. And if you're not from the UK or maybe wanted to buy some real estate in
the UK tune in. And if you have no interest in either of those things
tune in. Because we're we talking about some basic principles as well in regards
to buying real estate in areas that you live in. But I am going to be focusing a
little bit here on the UK. So, first things first. If you want to do real
estate in the UK, what do you do? What are some of the first steps that you can
take and I will tell you first off, I've never done real estate in the UK. I've
got a lot of individuals that have been asking though. What they can do as some
of their first steps. So, as a real estate expert, I decide to dive in a little bit,
dig in and figure out what I could figure out for you to help you out in
your real estate journey here in the UK. So, I'm going to one of my favorite
resources here, the wonderful world wide web. I've gone on to google.com and if
you type in UK real estate trends into the search bar, as a matter of fact, you
could type in anything you want to. UK real estate markets, UK real estate
2018, you know, there's a lot of different things that you can you can type in. Or
if you've got a specific city that you live in, type in that city with with some
of those other things as well. And just see what comes up. I went in here, I
pulled up a few different things and I'm starting to get a little bit of
an idea as to what's going on in the UK marketplace. I know that there's some
uncertainty right now because of Brexit. Different laws being enforced and
enacted and some changes that are happening. Also with with some tax laws, I
want to talk about a little bit about that. So, before you ever get in and do
anything, make sure that you've done a little bit of research. Now, I don't want
you to get into a paralyzed state where all you're doing is researching, right?
That's not the, that's not the goal here. The goal here is to do enough research
so, that you can have a level of confidence to take some of those first
steps. Doesn't mean that you're diving all in
and doing everything right, you know, as fast as you possibly can.
But you do want to do enough research to take some confident steps forward. So,
I've done some research here and I want to help you understand kind of what I've
looked through. First of all, I want to go into an article that I found here. This
is on moneyweek.com and it talks about how a lot of people are blaming brexit
for the UK housing market being fragile. There's other articles that I have found
that have said, "Hey, don't expect necessarily an economic boom in the real
estate marketplace. Don't also expect a massive crash." Probably neither of those
things are going to be happening here in 2018. Or even necessarily 2019 for that
matter. But it's good to understand kind of what's happening, what's going on.
There is a little bit of an exodus that's happening right now in the
Landlord arena. As a matter of fact, landlords are beginning to feel they're
like they're being squaws a little bit. They're feeling this squeeze from a
number of different areas right now. One is something that's happening right now
and I'm kind of reading from this article right now. You can see it says,
"But more important is the ability for higher rate tax payers to offset their
mortgage interest payments against their tax bills. This is being withdrawn in
stages. The squeeze began last year. It will be entirely withdrawn in April 2020.
In other words, if you're a landlord and you've been offsetting some
of your income tax with the ability to write off that interest, you know, on
the mortgage interest or different things like that, that's no longer going to
be allowed. That's actually going completely away by 2020. That's a big
deal. I know what America, investors here America love the ability to write off
that interest that you're paying towards that mortgage fee. You know, this is often
called buy-to-let or or being a landlord, right? A buy-to-let. So, you buy it with
the purpose of renting it out or letting that property out to other
people. And that tax benefit looks like is going away here in the UK. That's
one reason why a lot of people are getting out of the real estate market, I
think right now in the UK. And they also mentioned, they said, this is one one
thing that's going to keep those accidental landlords maybe
out of the marketplace, right? Someone who bought a property. Maybe as a short-term
or maybe they had a property that they were moving to a new one and they became
an accidental landlord that's probably going to happen less and less and less as
people begin to reconcile their tax bills. At the, you know, as the end of the
year comes and they have to do taxes. They're going to probably be a lot more
people they're going to be jumping out because it's just not worth it to them
anymore. Because of some of that squeeze. So, that's one thing that's happening.
Just to just to help you understand kind of what we're talking about, the scale of
what we're talking about, this isn't necessarily the biggest thing in the
world but it is significant enough to take a look at. It says here, "Last year
according to a state agency countrywide, landlords bought 12.5% of homes sold in
the UK. This is a 9-year-low. Compared to 14.7% in 2016
and 16.3% in 2015." So, this is one of the biggest drops that
we've seen. And because of this, a lot of people are starting to buy homes
cash. Now, the reality for a lot of landlords is they can't afford to just
buy homes cash, right? And so, if you're looking to get a mortgage on a property,
but we're counting on being going to write off that mortgage interest, that may
keep you out of the game, now. So, just something to be aware of. The abolition
of tax relief isn't the only thing, that says it right here. "Buy to let mortgages
are typically also interest only loans." In the UK, we've seen a gradual increase
in interest rates. And this is something that they are expecting to continue. So,
if interest rates increase and you've been getting these interest only loans
and writing off the taxes on those and those are going to be going away or at
least the ability to write off those taxes, those interest rates keep growing.
Then your rate, if you're getting an interest-only loan, is going to be growing
proportionally to that interest growth. If you had a normal loan, then it's
offset a little bit by the principle that you're paying, right? Doesn't grow in
proportion. That also is going to put a massive squeeze on landlords in the UK.
Another reason why, maybe you're looking to invest other places. Or just something
to be aware of as you're looking maybe also to invest in the UK. So, those are
some of the two major things that I've
seen. I know that a lot of people, there's a lot of buzz around brexit for a number
of different reasons. A lot of people are putting a lot of blame on brexit for the
real estate market and the economic market and different things that are
happening there. But according to this site, they're saying, "Hey, let's stop
blaming brexit for everything and let's look at actually what's happening."
Those two things that I just mentioned, the rise in interest rates as well as
the inability to write off your mortgage or your interest payment are
two reasons that are keeping people or that may keep people out of the interest
or out of the real estate game in the UK. So, as I looked at that then I thought to
myself, "Okay, what would I want to do?" I mean, if I've got capital in the UK and I
want to invest in real estate, how do I get into the real estate game. And one of
the things I want to help everyone understand is that the real estate game
isn't just a local game anymore. We live in a global economy, we have access to
more information, more resources, more people, more expertise than we've ever
had access to in our entire world, in our entire lifetime and probably and before.
So we're going to day and age where this access is made way more possible. My
recommendation to you is if you're looking to get it getting into real
estate and the UK is not your best option right now for whatever reason,
then start looking into other markets. I may be partial to the US because we've
done a lot of real estate here in the US. But the reality is, the US market is a
great market to do real estate in. The laws are such in specific areas and the
areas that we go and we invest in. The laws are such that they're very
landlord friendly. They help entrepreneurs and landlords build
portfolios. They actually incentivize you to do so and so there's a lot of
benefit to buying homes, buying residential real estate in the US.. If
that's something that intrigues you, if that's something that you're interested
in, my recommendation would be reach out to us and see what we can do to help you
out. But no matter what your next step is, my recommendation is to do some
research. Get to work. Take some action
and start doing real estate.