When making a property investment, the opportunity for capital growth will always be at the forefront of an investor’s mind. After all, when you invest in property, the long-term goal is to increase your initial investment and secure your financial future.
What is capital growth
Capital growth, also known as capital appreciation, is the profit you make on an investment. For example, if you were to buy an investment property for £100,000 and sell it a few years later for £150,000, then your capital growth would be £50,000.
For property investors, strong capital growth will be one of the key considerations when choosing what property to invest in, along with a strong rental yield for those also wishing to rent. Of course, a property can decrease in value, which would leading to negative capital growth – but the strength of the UK property market means this has rarely happened in recent times.
Indeed, house prices have tripled over the past two decades, rising by 175 percent. For investors who bought property 20 years, they have enjoyed unprecedented capital growth as the demand for UK property has soared.
UK market shows strong potential for continued capital growth
Real estate market analysis shows that there are still plenty of opportunities to capitalise on the UK’s property market. According to Savills, the housing market in Humberside and Yorkshire is expected to rise by 28 percent over the next five years, giving property investors the opportunity for strong capital growth and a high return on investment.
Citylife’s developments in Leeds are located in one of the UK’s fastest-growing cities and are likely to attract strong capital growth as UK house prices continue to accelerate. Northern cities like Leeds are showing signs of strong growth within the UK’s property market, making it a prudent time to invest.
Increase the potential for capital growth with a desirable property
It’s not just the location that needs to be right. Choosing a desirable property can also help maximise capital growth. Good sized bedrooms and open-plan living spaces, a home office, off-street parking, and a manageable outside space are all desirable features.
Other ways in which prudent property investors can increase their chances of capital growth is through regular maintenance and strategic improvements. This means that when it’s time to sell, the property is presented in the very best light and is likely to attract a higher price, resulting in increased capital growth. Extensions and loft conversions are also established ways of increasing the value of a property.
Buying a new property – especially off-plan – can also ensure sound capital growth. It’s often easier to negotiate on the price of a new build – especially one that is off-plan. In fact, many property investors who invest in an off-plan property find the value of the property has already risen the day they get the keys.
Additionally, property investors seeking to buy several properties can often secure even more favourable prices via a “bulk buy” discount, further increasing their opportunity for capital growth.
Citylife is creating new high-quality residential buildings in Leeds, across premium city centre locations, perfect for investors seeking new investment opportunities in a fast-growing city.
Find out more about our live developments of off-plan investment properties in Leeds here. If you’re interested in investing in the off-plan property Citylife is developing, get in touch with us today.