Recent drops in land prices across the UK has created promising opportunities for potential developers.
Paired with reduced construction costs and more affordable housing, right now could surprisingly be a great time to invest in developing land.
Although some developers are deferring land purchases until they have more clarity on the future post-pandemic, many courageous, entrepreneurial developers are seizing in on the opportunity to secure land at an all-time low price.
Current landowners unable to fund the entirety of their property projects are losing money by the day.
Hunter Finance can help you take advantage of the market and reap the rewards.
Is land a good investment in 2020?
Property is a major part of the UK economy and a lucrative industry to be involved in, in 2019 the sector employed 514,000 people.
Furthermore, commercial property investments across the UK have increased since 2016, reaching a high of £512 billion pounds in 2018.
Although we find ourselves in uncertain times at the moment, the positive thing about the housing market is that people will always need homes – so there is always going to be a market to sell to.
Here are some of the reasons why:
- Return on Investment (ROI): You can expect high ROI rates in property development. See this East Sussex example we funded where developers made a £1,000,000 profit.
- Buyers are easy to find: Since the industry has been on pause during the lockdown, there are a lot more buyers now available, which means you do not have to spend so much money and time on marketing and promoting the property you develop.
- Less competition: More wholesalers, rehabbers, buying hold investors than land developers so fewer people are as aware of the land-flipping business models, meaning you have less competition looking to purchase specific land areas.
- The land is protected against recession: Land business does not stop if the economy fails, because we can still purchase properties at low rates, so can always sell the property for at least the amount the land was purchased for and sellers can always regain the capital they spent.
- Funding opportunities: There are multiple opportunities for funding if you have the drive, confidence and knowledge to bring a project to life. Hunter Finance is one of many independent lenders in the market.
Is buying land risky?
Like any investment, when it comes to buying land, there are risks involved.
These include; shifting interest rates, legal issues when constructing, gaining planning permission and unforeseen costs.
However, most of these risks are easily avoidable if you do your research and plan strategically.
Should I sell my land or build on it?
If you currently own land and are wondering whether or not to sell it, it would be a better idea to build on the land and release your profit.
If you chose to sell right now, you may lose money on the land that you have already invested in since land prices have fallen.
However, if you hold off on selling and instead develop on the land and then sell the finished home, you will make much more impressive gains.
Looking to invest in property but don’t have enough cash?
Hunter Finance has over 10 years of experience. We use our own money to lend, which means there are no broker fees, and we have more freedom to take risks and support projects that mainstream lenders do not see the potential in.
We can offer expertise in the property field and can ensure you won’t waste time on lenders who are unlikely to back you.
- Why 2020 is a good year to buy a house
- UK house prices: annual drop for first time in eight years
- How can you combat the rising house prices in London
- New sales figures suggest that house buyers are returning to the property market
- UK’s largest housebuilder Barratt on course for record profits
Property page updated on 2nd June 2021 by James Bougon