CapEx Properties


1. Undersupply

The UK housing market is in a constant state of undersupply. 340 000 new homes are required, annually, and the UK’s best year to date, yielded 270 000 new homes. This constant state of undersupply means that there’s a solid demand for property, whether to buy, or to rent.

2. Residential investment property price points

The optimum entry level price point for investment is upwards of £100 000. Anything under that and it’s problematic to get a mortgage (leverage), as a non-resident, as well as slightly less cost-effective when factoring in managing agent’s minimum monthly management fees, which are normally charged as a percentage of the rent level, unless the rent level falls below their minimum threshold, in which case a flat rate is often charged.

3. Mortgages

Typically, as a non-resident, the loan to value (percentage of purchase price level for mortgages) for non-residents would be around 60-65% of the price of the property, meaning that the balance would need to be cash. Interest rates range from around 4% to 5%. Mortgages are generally granted for periods of up to 25 years.

4. Rental Yields

Rental yields range anywhere from 3% gross to 12% gross, depending on things like the location, type of residential property, price paid, condition and rental demand, etc.

5. Capital appreciation

Capital appreciation on these properties ranges from 3% (closer to central London) up to around 10%+, once again, depending on similar factors that affect the rental yields, above.

6. Acquisition costs

Everyone purchasing UK residential investment property is required to pay certain acquisition costs. Those costs would include Stamp Duty Land Tax (SDLT), legal fees, and mortgage fees (in the event that a mortgage is being taken out). As a property investor, assuming that you own your home or any other property anywhere else in the world, when buying UK investment property, you’d pay a surcharge of 3% on the stamp duty (meaning that you’d add 3% to the typical bill that a non-investor would pay). For non-residents, there’s a further surcharge of 2% on the SDLT. Other costs would include things like a survey to check the condition of the property, generally ranging from £400 to £1200, as well as any potential sourcing agents’ costs, etc.

7. Types of tenure

There are 3 different types of tenure (ways in which property can be owned) in the UK, being:

7.1. Freehold

The party owns the bricks and mortar building, as well as the land upon which it is located, for an indefinite period of time;

7.2. Leasehold

The party owns the right to occupy the building (essentially owning the individual apartment/flat), but not the common property (passages, lift wells, reception, etc) or land upon which it’s located and this is for a defined period of time, i.e. typically 90 years to 999 years. This is a common property tenure in the UK, and the majority of apartments/flats are owned on this basis;

7.3. Leasehold with a share of freehold

The owner of an apartment/flat not only owns the apartment/flat, but a share of the common property in the building, as well as a share of the land on which it is located.


Most of the UK’s apartments and flats and owned on a leasehold basis and the banking sector is geared for this type of tenure, so finance is freely available, subject to criteria.

8. Monthly running costs

In the case of leasehold tenure, once you’ve acquired the property, the typical monthly running costs will include the following:

Water, electricity, gas (if applicable), service charges and ground rent (paid annually to the owner of the freehold) and Council Tax. Typically, a tenant would pay the utility bills, as well as the Council Tax and the Landlord would only be responsible for all charges, while the property is vacant.

In the case of freehold, the typical monthly running costs would be all the above, save for the ground rent and service charges.

9. Benefits of ownership of UK residential property

The benefits of owning UK residential property, include aspects such as:

9.1. Stable economy;

9.2. Strong currency;

9.3. Well-functioning legal system;

Historically, UK property values have doubled every 10 years or so, making it a great way to build and protect wealth, if done properly.

How to invest in property in the UK

So, is the UK good for property investment? Yes, resoundingly so. Investing in UK property can be extremely attractive to foreign investors. Rental demand in the UK is inordinately high and outstrips supply year on year, as the country cannot build the required number of new homes that it needs, to service the population. As a result, historical capital appreciation has been as much as double digits, year after year, so the right investment in the right area, certainly can produce a healthy, long term capital gain. 

A market as fast and competitive as this one can be difficult to navigate especially as a foreigner buying property in the UK. So, whether you are relocating to London or planning to invest in a buy to let property, CapEx Properties is top of its class when it comes to assisting you in making a sound investment with good solid returns. 

If you are interested in procuring a property investment in the UK, you can contact us by completing our contact form. An expert broker will get back to you within 24 hours to talk about your needs and specifications. CapEx Properties offers a tailor-made experience to avoid the worry and stress of navigating the UK property market and endeavours to find you the best property investment in the UK. CapEx Properties has helped countless foreign clients find their ideal property and we pledge to do the same for you. 

About Us

CapEx Properties is an independently owned property search/buying agency, assisting international clients with the search & acquisition of UK properties.

Contact Details

CapEx Investment Properties Limited trading as Capex Properties is a company registered in England and Wales. Registration number 13324508.
Registered address: 128 City Road, London, EC1V 2NX, UK.