If you would ask an experienced real estate investor, what are the three most important factors in buying a property? They will tell you, ‘location, location, location’.

Location is such a crucial part of deciding on your investment because it is the one aspect of the property that you will not be able to change. If you are to choose between an ideal house and an ideal location, the wiser choice would be to go with the ideal location. You can always make updates to your house later on, but the location is permanent.

Most importantly, the location dictates the value appreciation of your property. Based on recent data, properties in the UK have been increasing by an average of 9.3% year by year for the past five decades.

Last year alone, a press release published last year by Land Registry Office reveal that house prices in the UK increased by 13.2% on average with some areas seeing a jump of 18%. This would mean that if you purchase a property today, it can more than double in value in a span of eight years.

Then again, it still falls down to the question – where will you buy? In this article, I list down the indicators that you should watch out for to determine whether or not you’ve found yourself a ticking treasure mound.

What is Appreciation?

In real estate, appreciation refers to the rate of increase in the value of a property over time. This increase in value is affected by different factors especially changes in geography and varies widely in different locations.

Property investors rely on appreciation rates because it is a form of long-term investment with the opportunity to make significant profits once the market matures and the property is offered for re-selling.

Indicators that a property has good potential to appreciate

Predicting the appreciation of a particular area requires careful observation. You have to keep in mind that you are trying to project how the property will be in the future and not assess it based on its current state.

Here are some of the positive signs that the location is likely to increase in value:

Urban development is always an indicator that the area is going to increase in value. Survey the neighborhood and look out for roads, bridges, railways, buildings, and other construction projects.

If the government or private companies are investing in infrastructure in the area, then there is much potential in real estate too.

A good sign of a rising local economy is the emergence of commercial establishments. When old buildings and empty lots are giving way to shops, restaurants, hotels, and the like, then the area is certainly thriving.

However, rather than looking for a property in the middle of the hotspot, try searching for one in the fridges where the developments have not yet started. These will likely be priced lower but with higher appreciation potential.

The stock market Generally, longer rental periods are offered at lower rates, reaching differences of up to 40%. With a pre-set fixed price

Wherever a school or university sprouts, more establishments are sure to follow. Moreover, it is a strong selling point for families with children or professionals planning to take up a master’s or doctorate.
Check out our previous article, Top Locations for 2021/2022 for Student Housing Investment.

Accessibility is always a key factor. Being near an express highway to the city, an airport, or a ferry port places the property in a solid position for a value increase.

To make things easier for you, I went ahead and listed down the Top 5 Best Areas to Invest in Property in the UK in the blog. Go ahead and read on!

Before you go…

I know that property investment could be challenging but with the right decisions, it could be the means for you to have the prosperous life you’ve always wanted.

If you are someone interested in entering the property investment business but do not have enough savings, get yourself a copy of our and learn how you can start.