Data-driven insights to steer your property investment strategy

To calculate simple mortgage interest, multiply the loan amount (principal) by the annual interest rate. For example, if you borrow £200,000 at an interest rate of 3%, your annual interest would be: 200,000 x 0.03 = £6,000. This amount represents the interest you would pay for one year, assuming the rate is fixed.

Mortgage repayments can be calculated using the loan amount, interest rate, and term of the loan. You can use the following formula to calculate the monthly repayment:

M = P [ r(1+r)^n / (1+r)^n - 1 ]

where M is the monthly repayment, P is the principal loan amount, r is the monthly interest rate, and n is the number of monthly payments. Alternatively, you can use a mortgage calculator available online to simplify the calculation.

Property can be a good investment in the UK, depending on factors such as location, market trends, rental yield, and economic conditions. Property values in many parts of the UK tend to appreciate over time, providing potential capital growth. Real estate also offers rental income, which can be a stable source of cash flow, and there are possible tax benefits for landlords. However, there are risks involved, such as fluctuating house prices, maintenance costs, and interest rate changes. Conduct thorough research on the local market and potential costs before making a decision.

To calculate the return on investment (ROI) for a property, divide the net annual cash flow by the cash invested, then multiply by 100. For example, if you bought a property for £200,000 with a 25% deposit (£50,000), earned £15,000 in rental income, and had £5,000 in expenses, your net cash flow is £10,000. The ROI would be:

(10,000 / 50,000) x 100 = 20%

Property yield is calculated by dividing the annual rental income by the property's purchase price, and then multiplying by 100 to express it as a percentage. For example, if the property costs £200,000 and generates £12,000 in rental income annually, the yield is:

Yield = (12,000 / 200,000) x 100 = 6%

Gross yield takes into account only the purchase price and rental income, while net yield also factors in other expenses such as maintenance, property taxes, and management fees.