Posts with tag: rental yields

Top regions for BTL split between Tory and Labour

Published On: June 16, 2017 at 9:43 am

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The latest quarterly buy-to-let index report from LendInvest has revealed that the top ten postcode areas in England and Wales are split evenly between locations that voted for the Conservatives or Labour.

LendInvest’s Index is calculated by analysing four critical measures, namely:

  • capital value growth
  • transaction volumes
  • rental yield
  • rental price growth

Locations

Luton has been revealed as the best buy-to-let investment location across both England and Wales. Average yields here are 4.54%, with rental price growth 7.37%. The majority of people here were found to have voted for Labour in the recent election.

Stevenage was found to be the top region for buy-to-let amongst Conservative supporters, with capital gains of 11.64% and rental price growth of 7.5% in the last quarter.

Romford, which came top of the pile in previous editions of the report, fell to tenth, due to falling rental yields and capital gains.

The top-ten buy-to-let postcodes, as per the Index, were found to be:

  Yield Capital gains Rental price growth Transaction volume growth
Luton 4.54% 12.83% 7.37% -10.40%
Stevenage 4.05% 11.64% 7.47% -9.40%
Rochester 4.55% 12.34% 5.45% -9.40%
Colchester 4.29% 14.14% 4.14% -11.16%
Dartford 4.37% 13.61% 3.92% -10.94%
Peterborough 4.71% 9.04% 6.98% -10.67%
Southend-on-Sea 4.30% 12.37% 3.89% -10.26%
Manchester 6.11% 7.58% 7.53% -12.41%
Canterbury 4.36% 9.34% 6.62% -11.49%
Romford 4.81% 14.42% 1.28% -11.67%

For Conservative supporters, the top-ten reads:


Yield		 Capital gains Rental price growth Transaction volume growth
Stevenage 4.05% 11.64% 7.5% -9.40%
Rochester 4.55% 12.34% 5.4% -9.40%
Colchester 4.29% 14.14% 4.1% -11.16%
Dartford 4.37% 13.61% 3.9% -10.94%
Southend-on-Sea 4.30% 12.37% 3.9% -10.26%
Romford 4.81% 14.42% 1.3% -11.67%
Chelmsford 3.96% 12.44% 3.3% -10.25%
Northampton 4.68% 9.64% 4.8% -11.23%
Swindon 4.10% 9.46% 5.0% -10.49%
St Albans 3.56% 11.30% 3.9% -12.48%

 

Top regions for BTL split between Tory and Labour

Top regions for BTL split between Tory and Labour

For Labour, the list is:

Yield Capital gains Rental price growth Transaction volume growth
Luton 4.54% 12.83% 7.4% -10.40%
Peterborough 4.71% 9.04% 7.0% -10.67%
Manchester 6.11% 7.58% 7.5% -12.41%
Canterbury 4.36% 9.34% 6.6% -11.49%
Bristol 4.45% 10.34% 4.8% -10.82%
Coventry 4.95% 8.49% 5.6% -10.49%
Ipswich 4.02% 11.77% 3.2% -10.86%
Newport 4.79% 5.52% 6.8% -8.83%
Ilford 4.37% 13.94% 0.9% -14.63%
Leeds 4.77% 5.97% 6.4% -9.59%

Changes

Christian Faes, co-founder and chief executive of LendInvest, said: ‘Against a backdrop of all the political upheaval the country has endured in the last quarter, it isn’t surprising to see some significant changes in the performance of postcodes against one another.’[1]

‘These shifts, however, are more isolated than systemic and the fact that there has not been a greater shakeup in the Top 10 buy-to-let postcodes signals the durability and resilience of the UK property market,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/top-ten-btl-postcodes-see-significant-changes-during-election.html

 

Landlords looking outside of London for the best yields

Published On: June 13, 2017 at 10:01 am

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Latest industry research suggests that buy-to-let landlords are looking away from London and towards the regions, in order to find the best rental yields.

Provincial cities with notoriously large populations of university students within the North and the Midlands have been named in the top-ten UK buy-to-let hotspots.

Just three London boroughs- namely Southwark, Newham and Tower Hamlets- made it into the top 20.

Location, Location, Location

It appears that a number of landlords are being thoughtful about location before deciding the go ahead and purchase an investment property. Many are conscious of the fact that its value will appreciate at a greater rate than mortgage borrowing.

Significantly-higher property prices in some regions of the capital appear to be putting off some landlords from purchasing property, with the knowledge that they could get better returns elsewhere.

Liverpool was recently named as the top-region for buy-to-let, with average annual rent achieved here £12,252. The average property price here is £122,283, and the typical mortgage cost £2,421. This means that the net rental yield before tax is 8%.

Landlords looking outside of London for the best yields

Landlords looking outside of London for the best yields

In addition, the Midlands could also prove attractive to would-be investors, with yields of 5.6% and 5.4% in Nottingham and Coventry respectively.

Greater Manchester is seeing average rental yields of 4.3%, while Portsmouth offers 4.2%.

London however offers rental yields of just over 3%, with savvy investors looking outside of the capital.

Liverpool Named the Top Buy-to-Let Spot for Rental Yields

Published On: June 12, 2017 at 9:46 am

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Liverpool has been named the top buy-to-let spot, delivering landlords average rental yields of 8%, once mortgage costs have been taken into account, found new research from Private Finance.

Liverpool Named the Top Buy-to-Let Spot for Rental Yields

Liverpool Named the Top Buy-to-Let Spot for Rental Yields

As house prices and mortgage costs have the greatest influence on rental yields, Liverpool takes the top spot as it has a combination of a low average price (£122,283) and high rent (£1,021 per month).

Nottingham came in second, with a rental yield of 5.6%, followed by Coventry at 5.4%, Greater Manchester at 4.3% and Portsmouth at 4.2%. Cardiff, Blackpool and Lincoln are next, with rental yields of 3.9% each. Bournemouth and Southampton complete the top ten, with rental yields of 3.8% and 3.7% respectively.

According to the study, which calculated rental yields in the top 50 UK towns and cities with the highest proportion of private rental housing stock, six of the top ten areas with the lowest house prices are also in the top ten list for best rental yields.

Within the top ten buy-to-let spots, average annual interest-only mortgage costs vary significantly, from £5,940 in Blackpool to £13,548 in Bournemouth.

The Managing Director of The Mistoria Group, Mish Liyanage, comments: “Faced with increased taxation and tougher mortgage lending criteria, it’s so important for landlords to ensure they invest in properties that will maximise rental income and minimise void periods.

“Student property gives good returns on investment, as it delivers high yields and full occupancy. There is huge demand for shared student accommodation near the four universities and, with a student population of around 60,000 and 60% of them requiring accommodation, Liverpool is great place to invest.”

He advises: “Increasingly, investors are looking for new and renovated property for the sole purpose of the university students, many of whom want to live in affordable, shared accommodation. Over the last 12 months, student rents in the city have risen by 23% and now sit at an average of £128 per month, as of May 2017.

“HMO [house in multiple occupation] student accommodation gives landlords much higher yields than a three-bed, single-bed property or a student pod. HMO properties can generate this significant increase in revenue because they are rented out to individuals on a room-by-room basis. HMOs often provide between four and ten rooms, rented to individual tenants. Rent will typically include the internet, general utility bills and Council Tax.”

Have you been tempted to invest in Liverpool?

Manchester still a hotspot for buy-to-let

Published On: June 5, 2017 at 8:57 am

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New research from Armistead Property has revealed that Manchester remains one of the top 10 places in the UK for rental growth.

Average yields in the city were found to total nearly 9%.

Manchester Rents

The top postcode area in terms in rental yields in the region was M6, which covers Pendleton, Claremont, Langworthy and Salford. Rental yields here average at 8.84%, with typical monthly rents of £1,034.

With this postcode area situated close to the middle of Manchester and the University of Salford, this postcode region is popular with students and young professionals.

The M14 postcode area, covering Moss Side, Rusholme and Fallowfield, sees average rents of just over 8%. Once again, this postcode is popular with students-due to its close proximity to the University of Manchester campus.

Other postcode regions of the city offering good returns are M5 and M38, offering returns of 8% and 7% respectively.

Revival

Peter Armistead, Director of Armistead Property, observed: ‘Manchester has undergone a revival following significant investment, which has funded major regeneration and brought new jobs to the powerhouse of the North. Manchester has seen £800 million invested in the Airport City, £235 million for the Sir Henry Royce Institute for Advanced Materials and The Factory, with £110 million dedicated to the arts. Employment in the city is forecast to get an additional boost, with expected growth of 3.8% between 2015 and 2020.’[1]

‘It’s no surprise that both UK and international investors are queuing up to purchase BTL property.  Manchester beats London hands down on affordable property prices. Over the last three years, 45% of residential sales across the city were completed for less than £125,000. Manchester also offers much better rental yields, with between 8-9% in some postcodes, compared with an average of 4-6% in London,’ he continued.[1]

Manchester still a hotspot for buy-to-let

Manchester still a hotspot for buy-to-let

Young Demand

Moving on, Mr Armistead noted that, ‘There has been a surge in demand for rental accommodation with increasing numbers of students and young professionals working, or studying in the City. Manchester’s population is growing and is expected to surpass three million by 2035.’

‘The housing market in being bolstered by a major regeneraton north east of Victoria station, where 8,000 new homes are being built over the next 10-15 years. There’s also a £1bn plan for another 8,000 homes, including the conversion of the Murrays’ Mills and a further 3,000 homes on the former ITV Granada studios at St John’s Quarter,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/manchester-remains-a-top-btl-hotspot.html

 

Where are the top university locations for buy-to-let investment?

Published On: May 22, 2017 at 9:29 am

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The top university cities for buy-to-let investment have been revealed in a new report from StudentTenant.com.

It indicates that landlords can earn substantial returns when purchasing near a university, with shrewd investors able to enjoy the best yields.

Northern Delights

A mixture of low property prices and spiralling demand for rental accommodation in prominent student cities in the North of England is seeing some landlords enjoying double-digit returns.

This said, data from the report suggests that the typical rental yield in the student buy-to-let market across Britain is substantially lower.

Durham came top of the class, offering the best buy-to-let of the top-ten ranked universities in the list. This was followed by Warwick and Loughborough.

Landlords purchasing near Durham University can look forward to average yields of 5.22%. Warwick and Loughborough offer typical returns of 5.11% and 5% respectively.

Capital Pains

On the other hand, London was found to be the worst performing region for buy-to-let student landlords. All three of the top ten ranked universities here saw the lowest rental yields.

Here, landlords can expect rental yields of 3.46%, with property prices here amongst the highest in the UK.

The table below shows the top-ten ranked university locations for buy-to-let investment in the UK:

Rental Yield Rank Location University League Table Rank Student Population Avg. Property Price Avg. Rental Yield
1 Durham Durham University 6 17,927 £151,465 5.22%
2 Warwick University of Warwick 8 25,615 £338,220 5.11%
3 Loughborough Loughborough University 10 16,500 £237,005 4.93%
4 Fife University of St Andrews 3 8,790 £158,113 4.60%
5 Lancaster Lancaster University 9 13,336 £148,268 4.46%
6 Oxford University of Oxford 2 22,602 £497,603 4.12%
7 Cambridge University of Cambridge 1 19,672 £465,588 3.64%
8 London Imperial College London 5 14,700+ £717,217 4.53%
9 London London School of Economics 4 8,895 £1,125,671 3.46%
10 London University College London 7 38,000+ £1,125,671 3.46%
Where are the top university locations for buy-to-let investment?

Where are the top university locations for buy-to-let investment?

Rental Yields

Danielle Cullen, managing director at StudentTenant.com, observed: ‘For anyone looking to invest in a student property, it’s always advised to assess the potential rental yields in the area to see if it’s a sound investment. However, I must stress that rental yields aren’t everything and there are many things to consider before purchasing a student rental property.’[1]

‘Is the property located near the university? Does the property have parking spaces? What is the current condition of the property? It’s important to collect as much information before taking the plunge, to ensure you get the best possible deal,’ she continued.[1]

Moving on, Cullen said: ‘Looking just at rental yields for the top ten ranking universities, it might seem attractive to invest in a student property in an area like Warwick or Loughborough where yields are around 5%. However, when you account for the higher property prices, it might not be the best option available for investors.’[1]

‘Durham could well be an up and coming investment location for the student sector. It’s typically not what I would consider a ‘hotspot’ for private landlords looking to increase their portfolio, but could well be one to watch.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/top-university-towns-for-buy-to-let-revealed

Where are the best regions for rental growth?

Published On: April 28, 2017 at 8:39 am

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New figures from Your Move show that the average rent in England and Wales during March stood at £800, a rise of £2 in comparison to the previous month.

However, this was a fall from the £811 per month seen at the back end of 2016.

Rental Rises

The latest Your Move England & Wales Buy to Let Index shows that rents increased in six of the ten regions covered by the analysis during March, in comparison to February.

This was driven by rises in the East of England, with prices here increasing 1.6% in the last month. Now, values are 7.4% greater than in March last year.

Valerie Bannister, letting director at Your Move, noted: ‘In previous months we have seen rents in the South East rise as people looked to move beyond the capital, but it is the East of England which appears to be seeing the benefit as rents here have risen 7.4% in the last year.’[1]

Capital Slowdown

On the other hand, rents in London continue to slow. The capital saw rental decline on both a monthly and yearly basis. The average rental property in the capital let for £1,203pcm during March 2017, a fall of 6% month-on-month.

Bannister continued by saying: ‘Rents in London have declined in the last 12 months, falling from £1,297 a year ago to £1,203 in March 2017.’[1]

The capital was not the only region to experience a rental decline in the last month and year. In the North East, prices now average at £525pcm, after seeing a fall of 3.7% since February and 3.1% since March 2016. However, it remains the cheapest place to rent, according to the survey.

When are the best regions for rental growth?

When are the best regions for rental growth?

Yields

In terms of yields, the average in England and Wales was 4.5% in March, a fall from the 5% seen in March last year.

Regions with greater house prices continue to have the lowest yields, therefore it is not a surprise that the average yield in London was 3.2% last month.

At the other end of the scale, properties in the North East saw the largest yields, of 5.2% in March. The North West also saw healthy yields of 5% over the same period.

[1] https://www.landlordtoday.co.uk/breaking-news/2017/4/where-are-rents-rising-fastest-in-england-and-wales