Posts with tag: North West

Landlords should look north for strongest buy-to-let profits

Published On: October 17, 2019 at 9:32 am

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strongest buy-to-let profits

Scotland and the North West have been highlighted as the most profitable areas for property investment in 2019/2020, according to TotallyMoney.

The results of the credit expert’s latest research reveal:

  • The UK buy-to-let market is currently doing well. Many of the best performing postcodes in the UK turn a 7% to 8% yield
  • The highest returns in the UK can be found in Liverpool’s L1 postcode (10% yield)
  • Two Scotland postcodes have made the top three and a total of nine Scottish areas feature in the top 25 of the best yields
  • All postcodes in the top 25 have property asking prices under the current UK national average of £232,710
  • St Albans’ AL5 postcode has the lowest yield in the UK, a poor 1.95%. This is closely followed by Ipswich’s IP13 at 1.96%

Despite the ongoing changes in landlord tax relief and an increase in landlord responsibilities, TotallyMoney’s research shows plenty of UK postcodes return healthy profits for property investors.

Top 25 UK buy-to-let postcodes

  • Liverpool’s L1 boasts a strong 10% profit margin, smashing the 3% yield many of the UK’s postcodes offer. Properties can be bought for an average pf £90,000 and can bring in a median rental value of £750
  • The North is also doing well, particularly in Falkirk and Glasgow. FK3 and G52 are seeing yields of 9.51% and 8.75% respectively
  • The 16 top postcodes are in the North West (predominantly Liverpool) and Scotland
RankPostcodePostcode TownProperties for RentMedian Rental ValueProperties for SaleMedian Asking PriceYield
1L1Liverpool187£750368£90,00010.00%
2FK3Falkirk30£49539£62,4509.51%
3G52Glasgow46£59566£82,0008.71%
4L11Liverpool55£65031£90,0008.67%
5TS1Cleveland65£42534£60,0008.50%
6KA1Kilmarnock68£45075£64,9958.31%
7L6Liverpool153£57559£85,0008.12%
8LE1Leicester176£667116£100,0008.00%
9LS2Leeds111£82532£125,0007.92%
10S1Sheffield219£75068£115,0007.83%
11CF43Cardiff36£42535£67,0007.61%
12TS3Cleveland60£47563£74,9757.60%
13L2Liverpool115£850106£135,0007.56%
14PA3Paisley42£42543£68,5007.45%
15L3Liverpool282£740360£119,9507.40%
16SR8Sunderland85£450143£73,7257.32%
17G51Glasgow74£59531£97,5007.32%
18NE8Gateshead148£57575£94,9507.27%
19AB11Aberdeen173£60045£99,9957.20%
20G67Glasgow57£45065£75,0007.20%
21G32Glasgow46£47576£79,9957.13%
22L4Liverpool136£47594£80,0007.13%
23G21Glasgow30£55031£92,9957.10%
24LA14Lancaster50£500128£85,0007.06%
25SR5Sunderland46£49540£84,9506.99%

Weak performing postcodes for investment property

  • AL5 in St Albans is at the very bottom for yields, at 1.95%. The average buying price for a property is £800,000, and asking rent is £1,300 per month
  • London’s W8 postcode (Kensington), provides a 2.05% return for landlords, even though average property prices are a hefty £1,962,500.
  • Other commuter spots in the bottom 10 include RG10 in Reading (2.26%), GU10 in Guilford (2.22%) and KT7 in Kingston upon Thames (2.20%).

TotallyMoney spokesperson James McCaffrey, comments on the findings: “Many existing and would-be landlords wonder if buy-to-let is still worth it. Our findings are another source to help property investors answer that question.

“The maps and data clearly show there are pockets of profit for landlord investment this year. And it seems that Scotland and the North are good places to start a buy-to-let property search.

“Landlords should always do their research before committing to a property purchase. Understanding current market trends is part of that. Making sure they’re financially prepared is another.

Short-Term Lets in Liverpool Offering Yields of Up to 30.7%

Published On: March 20, 2019 at 10:32 am

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Landlords who own properties in Liverpool or Manchester could potentially achieve yields of up to 30.7% on short-term lets, according to Portico Host.

The short-term letting agency has conducted research on short-term lets in the two cities, finding that landlords in Walton, Liverpool are achieving the highest short-term let rental yields, at an average of 30.68%, which compares to 7.88% for those letting longer-term rentals.

Walton is located on the outskirts of Liverpool city centre, and is a diverse and longstanding residential area. House prices here are cheaper than in other Liverpool postcodes, which enables landlords to achieve stronger yields.

The highest long-term rental yield in Liverpool or Manchester can be achieved in Fairfield, Liverpool, at an average of 12.52%. 

The short-term lets return is based on an occupancy rate of 60% of the year, which is typical for this type of property, due to seasonal demand.

Of the top ten best performing locations for short-term lets in Liverpool and Manchester, the top five are in Liverpool postcodes L4, L6 and L7.

In Manchester, the highest short-term lets return can be found in Hulme (M15), at an average of 17.4%.

Rachel Dickman, the Regional Manager of Portico Host, says: “It perhaps isn’t surprising to find that the properties that are achieving the greatest returns are those that are situated in areas surrounding Liverpool and Manchester city centres. These places typically have excellent transport links, proximity to popular tourist attractions, employment hubs, and good restaurants and cafes.

“Liverpool is becoming increasingly popular on the tourist trail, with 1.34m people visiting the city in 2018, and with business travellers, students and young professionals. A growing number are wanting to stay in short-term let properties, and the increased demand for this type of accommodation is underpinning the rents that can be achieved.”

There are currently 10,200 active listings in the North West on Airbnb, according to the short-term lets site’s latest insight report. The study also found that Airbnb has brought in almost £37m for the North West’s economy.

Portico’s Emma O’Rourke comments: “Good news also for landlords is that mortgage lenders are waking up to the popularity in short-term lets, although they do remain cautious of the risk it poses to their balance sheets.

“Last year, one lender launched a mortgage aimed specifically at Airbnb hosts, and landlords who want to rent out rooms in their home for short and ad-hoc periods. We expect high street lenders to follow suit with more mortgage products for these types of properties coming to the market, making it easier for people to let a property in the short-term.”

Landlords, does this encourage you to invest in the short-term lets sector? 

Buy-to-Let Booms in North West England, Savills Reports

Published On: February 25, 2019 at 9:59 am

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Buy-to-let investment is booming in the North West of England, according to the latest figures from property firm Savills.

Despite economic conditions making the buy-to-let market challenging for property investors, analysis of the Savills data shows that the North West has overtaken the South East of England as the most popular region for buy-to-let landlords.

Maxim Cohen, the Chief Executive of mortgage advisory business The UK Adviser, explains why the region is so popular: “It is no surprise that the North West and its property continues to thrive, and the feedback we have had from our UK Advisers has supported this growth trend. The North West hasn’t experienced the same levels of property inflation and demand that the capital has in recent years, and, therefore, the market hasn’t been distorted.

“With property prices sky-high in the capital, incoming rents do not match the high mortgage payments, making yields unprofitable and not worthwhile. However, property in the north has not experienced the same problem, despite increased investment in cities such as Manchester and Liverpool, with the recent investment in the North West bringing business and people to the region, who increase the demand for rental properties.”

Buy-to-Let Booms in North West England, Savills Reports

He continues: “The introduction of national and international businesses to the Manchester and Liverpool areas has also increased demand for rental properties in commuter towns, and revitalised towns such as Altrincham, Didsbury and Chorlton in South Manchester, which have seen a boom in buy-to-let properties.

“Slow property market activity in the wake of Brexit negotiations also means lenders are offering rock-bottom mortgage rates to tempt landlords, following the Bank of England’s base rate decisionlast year. However, the low rates are unlikely to stay that way for long, creating an urgency for investors to buy now, before rates change. Many mortgage lenders will continue to offer incentives, such as free valuations and cash back, to attract business from landlords.”

However, Cohen notes: “Of course, depending on the outcome of Brexit, house prices in the UK could take a hit. Deterred by the uncertainty of the property market, an increasing number of individuals could be looking to rent property instead of buying, pushing up the demand for rental housing and the cost of rent. If you’re currently considering investing in buy-to-let property, it’s worth monitoring the property market, as house prices have the potential to drop significantly. However, a drop in house prices will not be as significant in the North West compared to the capital, making it attractive to investors. If there is a noticeable drop, investors will need to be prepared to act quickly to secure the property they want, as more landlords look outside of the capital.

“Getting your finances in order ahead of 29thMarch will make you a more attractive buyer and allow you to react quicker to any market changes. Alternatively, bridging loans and other alternative finance options can give landlords access to fast, flexible finance to secure property acquisitions in a competitive market.”

He concludes: “2019 is set to be an uncertain time for landlords, but the market is thriving around the UK. Considering alternative locations for investment may mean higher yields and a profitable year, despite the pessimism of the industry.”

Landlords, are you attracted to the booming North West? 

Selective Licensing Schemes to be Extended in Burnley

Published On: February 8, 2019 at 10:00 am

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Councillors in Burnley are expected to extend the existing selective licensing schemes in Trinity, Gannow and Queensgate, as well as introduce a new scheme in Daneshouse with Stoneyholme.

Following a 12-week public consultation, Burnley Borough Council’s executive is expected to renew the existing selective licensing schemes in Trinity, Gannow and Queensgate, which are due to expire this year, while also making Daneshouse with Stoneyholme a selective licensing area for the next five years.

The consultation, which included resident and landlord questionnaires, a public event, and leaflet distribution, ran from early September 2018. Having considered the results, Burnley Borough Council is of the opinion that selective licensing schemes encourage landlords and residents to work together with the Council and other partners, to improve areas by tackling anti-social behaviour and crime.

Councillor John Harbour, the Council’s Executive Member for Housing and Environment, comments on the decision: “The current schemes in Trinity, Gannow and Queensgate have been successful, with moderate rises in house prices, reducing empty properties and anti-social behaviour, such as flytipping, showing a downward trend.

“We want to see that success continue, which is why we’re considering building on the success of selective licensing in those areas and looking at proposals to introduce a new scheme in Daneshouse and Stoneyholme, so people there can also see the benefits of closer partnership working between the Council, private landlords and agents.”

If you’re a landlord with properties in any of these areas, please be aware of the new and existing selective licensing schemes operating throughout Burnley. 

We will continue to keep landlords up to date with all changes to the mandatory and selective licensing schemes in operation throughout the country. 

Last year, changes were made to the licensing of Houses in Multiple Occupation across the country – if you’re unaware of the new rules, read up on them here: https://www.landlordnews.co.uk/hmo-licensing/

5 Reasons why Liverpool is Drawing in Investors from Around the World

Published On: October 27, 2017 at 8:00 am

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Liverpool is proving itself to be one of the top locations to invest in property in the UK, attracting investors from around the world. Jonathan Stephens, the Managing Director of Surrenden Invest, explains why…

“Liverpool is one of the UK’s most enticing cities from a cultural, architectural and historical perspective. It’s also drawing in investors from around the world, thanks to its dynamic business and property sectors. The rush to invest in Liverpool doesn’t look ready to abate any time soon. Here are five reasons why,” he says.

  1. Extensive regeneration 

Liverpool’s skyline has been awash with cranes for years, as the city pours money into developing ever bigger and better attractions. These range from stunning new tourist attractions to ultra-contemporary commercial and residential properties.

One of the most exciting current projects is the Ten Streets regeneration, which is part of a 15-20-year strategic overhaul, focusing on a new creativity district that will bring with it lasting and long-term benefits to the city as a whole. One thing that Liverpool certainly doesn’t shy away from is long-term planning.

  1. Tourism potential

5 Reasons why Liverpool is Drawing in Investors from Around the World

5 Reasons why Liverpool is Drawing in Investors from Around the World

Liverpool’s tourism sector is worth some £3.8 billion. The city is one of the most visited places in the UK, attracting more than 54m visitors each year. Just under 50,000 jobs in the city are supported by the tourism sector.

Liverpool’s tourist attractions are extremely wide-ranging. The Beatles Story and Cavern Club are must-visits for music fans, while the bustling Albert Dock leisure complex and UNESCO World Heritage waterfront also attract hordes of visitors.

All of this is backed by a dozen Michelin starred restaurants and enough other excellent dining options to satisfy even the most demanding gourmand.

  1. Housing undersupply 

From April 2009 to March 2016, Liverpool built homes at an average rate of 713 per year. This was against a Home Builder Federation (HBF) estimate that the city needs to build 3,000 homes a year to keep up with demand. This mismatch between supply and demand has made for an interesting investment opportunity.

Demand for housing is growing, with Liverpool’s population rising from 435,500 in 2001 to 466,400 in 2011, according to Census data – an increase of 5.5% in a single decade. This has pushed up both house and rent prices in the city, as well as the wider region. Rents increased by an average of 4.4% across the North West in 2016. Longer-term, it is house price growth that will impress potential investors – property values rose by an average of 22.7% over the last five years, with apartments growing at an even faster rate of 25.2%.

  1. Youthful population

Liverpool is attracting a range of young talent, with professionals drawn to the city thanks to its economic potential. The number of those aged 22-29 in the city centre increased fourfold in the ten years to 2011. This has served to create a dynamic, enthusiastic workforce that is well positioned to provide Liverpool with a bright economic future.

Businesses are working to ensure that they harness the power of this youthful population. Santander’s first business incubator was set up in Liverpool. The city was also the location of Launch22’s first incubator outside of London. When it comes to future-proofing its business environment and economy, Liverpool is light-years ahead of many UK cities.

  1. Economic strength

Liverpool isn’t just a promising location for UK business and property investors – it’s one of the most appealing cities in the UK for multinational companies. Its mix of business sectors and income streams has allowed the city to build up strong economic credentials.

Asif Hamid, the Interim Chair of the Liverpool City Region Local Enterprise Partnership, sums it up well: “Liverpool City Region has recorded a strong economic performance over recent years, and these figures clearly underline the progress being made to deliver sustainable economic growth across the city region. This is an attractive location for businesses to invest and they are doing so in significant numbers.”

Liverpool was ranked joint second in the top ten mid-sized European cities of the future for 2016/17 by Financial Times company fDi Magazine. Its connectivity and business friendliness were noted as being among the city’s best credentials.

With such fantastic reasons to invest in Liverpool, could a move to the North West property market be on the cards?

Demand for Shared Student Accommodation Surges in North West

Published On: September 8, 2017 at 9:02 am

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A shortfall of student beds in university halls of residence has led to a surge in demand for high-quality shared student accommodation in the North West, particularly Liverpool, according to The Mistoria Group.

Demand for Shared Student Accommodation Surges in North West

Demand for Shared Student Accommodation Surges in North West

The property investment specialist has seen demand for shared student accommodation surge by 35% in the city over the past year.

Demand for shared student accommodation is growing due to rising numbers of students attending the three universities in Liverpool. Last year, there were 60,000 students studying in the city – up by 20% on the previous year. It is expected that numbers will rise again this year, with 60% of these students requiring accommodation.

Many universities don’t have sufficient accommodation to meet demand from first-year students – who usually live in the university’s halls of residence – creating demand for privately owned accommodation.

According to Student Accommodation Tracker, just 28% of student accommodation currently meets rising expectations.

Mish Liyanage, the Managing Director of The Mistoria Group, says: “There is a very real shortage of quality student accommodation in Liverpool, and demand is consistently outstripping supply. The number of student rooms has swelled over the last five years, but there still remains a shortfall.

“We have seen a surge in students looking for high quality, HMO [House in Multiple Occupation] accommodation with close proximity to the universities, and occupancy across our student accommodation is at 98%.

“Shared student accommodation in Liverpool gives investors excellent yields. There are many areas of Liverpool that are ideal for student property investment, such as Kensington, Wavertree, Toxteth, Kensington Fields.”

He explains: “Investors can acquire a high quality, three-bed HMO, which will house students from £120,000 onwards. An average room in an HMO can be rented for £85 per week including bills, but ensuites can be as high as £110 per week. The return on investment is very attractive too, with 13% (8% cash rental and 5% capital growth).

“Student property is the fastest growing sector of the market, giving investors strong returns that are well ahead of standard BTL [buy-to-let]. The growing numbers of student tenants in Liverpool is driving demand for quality accommodation in the city, and this is likely to be a long-term trend.”

Liyanage adds: “Liverpool is the UK’s top buy-to-let hotspot, delivering investors average rental yields of 8%, once mortgage costs are taken into account. As housing and mortgage costs have the biggest influence on yield, Liverpool takes the top spot, as it has a combination of low average house prices and strong rents.”

Landlords, with demand for shared student accommodation surging, investment in this type of property could prove a lucrative long-term option for your portfolio.

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