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UK property investments: What are the realistic yields to expect?
With the resurgence in residential property investing in the United Kingdom, many South Africans are opting to move their offshore allowances into this asset class.There are many ways to buy property in the UK, and now with people’s inboxes becoming inundated with offers from agents selling their wares to overseas investors, it’s useful to know what to look out for.

Craig Illman, a director from UK-based property company Propwealth, highlights a few suitable property options and those which are being marketed with higher than normal yields to sell quickly. “70% of our clients live in South Africa and as we focus on long-distance investors, we are familiar with their concerns and the dangers of sales people over-promoting to them.”

The most suitable type of property
He continues, “It’s the 'nuts and bolts' style of property that always makes sense. This includes residential properties with market-driven yields; those with capital growth over time; and those aimed at tenants who are on standard tenancy agreements. When you own the property outright, you are in control.”
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Property transaction costs in SA vs world - making ownership more affordable
A number of property professionals have called for the lowering of costs associated with buying property in South Africa.

What is the broad context?
The costs of buying a property in South Africa include transfer duty, attorney’s fees, and deeds office registry fees. As a rule of thumb, these costs amount to 8-10% on top of the purchase price of any property over R900 000. Given that buying property is likely the biggest financial investment that most people will ever make, these extra costs can be a burden and barrier to entry.

Government has a responsibility to make South Africa an attractive investment option to both locals and foreigners. President Rhamaphosa is acutely aware of this and is acting accordingly. The 6th of November marked the official commencement of the second South African Investment Conference, a key event in the drive to secure over R1.2 trillion in investment commitments over the next five years. By the end of the conference R200 billion had been pledged by local and multinational businesses.
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What if you’re a seller in a buyer’s market? 4 tips
The conditions currently prevailing in the property market are geared to favour buyers. Supply exceeds demand, the repo rate came down by 25 basis points recently, and banks are offering loans in excess of 100%, all factors that make it easier for buyers, particularly for those purchasing for the first time, to enter the market.

But what if you’re a seller in a buyer’s market? “Buyers can have their pick – and negotiate the very best deal in most instances – which is why it is essential for sellers to ensure their offering stands out among the rest,” says Brenda Lange, Principal at Leapfrog Kempton Park.

While buyers can “take their pick among the bargains”, she says a “tough” market is no reason for sellers to despair. “Simply approach the selling process with care, consideration and creativity, and you’re almost guaranteed to move your property in good time and at the right price.”
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Should you pay off your bond completely - or keep your options open?
Only a small percentage of buyers can afford to pay cash for their homes, with the majority having to rely on home loans that can cost them up to 30% of their monthly income in repayments.

So it is not surprising that many people strive to pay off those loans and be “bond free” as quickly as possible, says Berry Everitt, CEO of the Chas Everitt International property group. “However, closing your home loan account completely is not necessarily the best course of action, for several reasons.

“Firstly, there is a strong likelihood that you will need to borrow money sometime in the next few years to finance an education, a car, or even another property, and using your access bond to “re-borrow” some of your home equity will definitely be the cheapest way to do this.

“The interest charged on home loans is much lower than that on student or personal loans, car finance and credit card balances, and this is actually reason enough to keep your home loan account open, even if there is only a nominal amount owing.”
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