UK property investment - the landscape in statistics, as told by GetGround investors

Chris Frame, Co-Head of Property BU and Head of Partnerships at GetGround shares insights on where property investors are choosing to buy, and what data reveals about who is investing in property and how they are structuring their investments. 

The property investment market has faced the impact of various external factors over the last few years; rising mortgage rates, unforeseen increases in inflation, and changes in policy and regulation that have all impacted the strategy and approach of buy-to-let investors.

With market changes in mind, everyone in the industry is asking themselves: what’s today’s best buy-to-let investment strategy? Who is the average UK landlord today? What should investors be on the lookout for next for their investment portfolios? 

At GetGround, we work closely with 20,000+ buy-to-let investors, helping them to invest in UK property: from purchase, to buy-to-let mortgage, to limited company creation. Here’s what the numbers are telling us about their current investment strategies: where are they choosing to invest, with who and how?   

Where are property investors choosing to buy? 

Investors have been turning their view to regional areas this year for buy-to-let properties; the development and regeneration of these areas are starting to draw investors in as they search for high-yielding properties which also sit at a healthy asking price. And GetGround investors have sought out one area over others: Manchester. 24% of our investors have purchased their properties in Manchester, this is followed by Liverpool with 12% of investors making it their location of choice.

London and Birmingham then sit tied at around 6% each with Birmingham attracting just slightly more investment.  

There are a few major reasons Manchester has caught the eye of GetGround investors. The capital appreciation of property in the city is one of the best in the country, reaching 8.1% year-on-year growth, according to Zoopla. Over the last 20 years, the value of property has appreciated by 260%, beating the country average by 80%.

The rental yield also significantly outperforms the country average, the city reports a 7.2% yield with the rest of the country averaging 4.7%. Another factor that makes Manchester a buy-to-let hotspot is rental demand.

For instance, the demand growth for three-bedroom properties is as high as 33% while for two-beds it’s 25%. This combination of benefits that Manchester hosts explains investor interest in the area. To explore properties in Manchester and other areas across the UK, take a look at the vetted properties available on the GetGround marketplace. 

How are property investors structuring their investments?  

Recently, Hamptons reported that this year the number of buy-to-let properties bought through limited companies was 74%.

This growth in structuring choice is mirrored by our investors - with 81% of people who bought property using our marketplace doing so through a GetGround limited company. Some are choosing to invest with others (something that a limited company structure makes far easier), with many who do invest typically holding more than one rental property in their portfolio.

The average number of shareholders in these companies is 1.7, meaning that people more often than not invest with someone else. We’ve also seen that investors tend to have more than one company under their name, meaning they are starting to build their buy-to-let portfolios.

Holding individual properties under their own companies allows the reduction of risks as all properties are their own entity. It also means you have increased flexibility within your portfolio to sell, share and plan inheritance on a property-to-property basis.  

Although there is often the perception that off-plan new build developments are more risky, we find that investors are seeing the benefit in these types of properties. 41% of purchases from the GetGround marketplace were for off-plan properties, 34% were for second-hand properties, and 25% were for new builds. On the GetGround marketplace, all developments follow a strict due diligence process, which our investors know and trust.  

Who is investing in property?  

International investors are seeing the promise in the UK property market as much as local investors. 51% of our investors are from overseas, with 19% being from Hong Kong and 12% from Singapore.

Their interest in the UK can be attributed to the attractiveness of the market combined with the limited barriers to entry. According to Zoopla, over the last year and a half, there has been double-digit rental growth, with the current annual demand increase at 10.8%. Investors are entering the market knowing they will be supplying an ever-present demand.  

The market has seen a recent trend with the increase in younger investors who wish to reap the long-term rewards of property investment. GetGround’s investors are indicative of this with 19% of our investors being 25-36 years old. However, they are currently still overtaken by the older generations.

The most prominent age of our investors is 36-45, with 32% of them being in this age bracket. This is followed closely by 28% of investors who are 46-55 years old. The flexibility of using limited companies to invest, the efficiencies they boast for investors, and the opportunity they provide to co-invest in a simpler way could propel the trend of younger investors entering the market. 

How are people financing their buy-to-let investments?  

With the growth in the use of limited company structures for buy-to-let investors, landlords are afforded more flexibility in how they structure their investments.

With the average number of shareholders in a GetGound Company at 1.7, most of our investors are not raising the capital for their properties alone. With rising mortgage rates and uncertainty within the market, the ability to easily split the shares of a company for an efficient joint investment appears beneficial for investors.

The high mortgage rates are even deterring some investors from taking out loans to purchase their buy-to-lets, 43% of GetGround investors have decided to buy with cash. Although the majority of investors still use mortgages, the benefit they provide investors is the potential to leverage them in order to extend their capital. With mortgages, you can spread your capital over multiple investments and start to build a portfolio.  

With a changing landscape and increased difficulty in the property investment market, investors are looking for new ways to unlock the potential of buy-to-let, while still feeling secure and confident in their investment. At GetGround, we’re able to provide investors with an all-in-one property investment platform, where they can find, finance and manage their investments, all in one place.

Find out more here.