Land is a tangible investment – you can see what you are getting – but in addition you have the chance to enjoy it for its own sake, with the potential for considerable returns. Land as real estate investment property has risen in value by nearly 30% in the last 12 months and is up by 130% since the early 1990s.
Land compares favourably as an investment when compared with high risk stock market picks, making it an excellent real estate investment property opportunity.
Land which can be bought affordably can be turned into a real money-spinner if you get the right permissions subsequently. As an example, a plot of land in the South East, bought for £15,000, could gain planning permission for a four bedroom detached house. A builder could buy this land for £200,000 to sell a £600,000 house. This represents an excellent real estate investment property investment.
Land has some great advantages:
1. There is a finite amount of land
2. Land can increase in value in two ways
* By increasing property values, as demand outstrips supply
* By gaining planning permissions
3. There are strong possibilities of exceptional short to medium term returns
4. Any nationality can buy UK land
Recent government activity with regard to housing has made this a good time to own land. The government wants more green belt land to be built upon to increase the house-building programme over the next ten years. As other investment markets are feeling the squeeze, it is inevitable that land prices will continue to rise in the coming years. Real estate investment property such as land will shoot up in value.
The price of land has gone up by a multiple of eight in the last 20 years, with the most expensive land to be found in London and the South East. Prices here have been forced up by a shortage of residential land and an increased need for more housing.
In the medium to long term land can be a good investment, but you can make really big money if you buy land without planning permission and subsequently get permissions for that land.
So far, since it came to power, this Labour Government has approved 162 different schemes of development of green belt land. Still the shortage of housing continues to increase, with the shortfall predicted to be one million homes by 2022, unless there is a dramatic pick up in development. There is also a shortage of land suitable for development. A recent report said that an additional 70,000 to 120,000 houses per year would have to be built to keep pace with demands.
These facts make land an attractive investment, and prices for land are expected to keep rising as demand for new housing continues to increase.
The largest gains can be made when buying land without planning permission, as the land can be purchased at relatively low cost and if the land is later granted planning permission large profits can be made.
There are obviously some things to look out for when buying land and such things as access rights, road infrastructure and many other things need to be checked out.
Land as real estate investment property has the potential to make big money if you do you homework, and it is also recommended that you use a solicitor when investing in land, to ensure that everything is in order.
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Damian Qualter is the MD and Property Finder of Prague Property 4 less, a business that offer clients an individual service offering only the best property investment opportunities in Prague. And also have so many years experience in property investment and have been based in Prague for over the last 4 years.