Posts with tag: rental yields

Brexit could cause short-term hit, with long-term gains

Published On: October 6, 2016 at 8:59 am

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The uncertainty being generated through the Brexit negotiations could cause short term falls in property values in Britain. However, new analysis suggests that this could present opportunities for real estate investors, according to a new survey.

Drops will remain fairly subdued given the economic outlook, the latest UK property market report from property investors M&G Real Estate states.

Panic

This report shows that despite a perceived panic in the post-referendum landscape, including the property market, investment opportunities in London will be more readily available.

In addition, the report indicates that sectors such as the private rented and long lease property will continue to provide attractive yields for pension funds and other investment types.

The outlook for the UK property market is, according to the report, now in a much stronger position to cope with any short-term uncertainty than during the crisis.

M&G Real Estates suggests that occupier markets are offering comfort, with supply issues continuing in many locations. With Britain seeing seven years of below average construction levels, rents have been rising in more prime locations.

Brexit puzzle .jpg

Overseas opportunities

Further data from the report shows that a number of overseas institutions are looking to take advantage of the slump in sterling. It appears that Brexit is largely a domestic concern, with investors from overseas looking to London as a safe haven.

Richard Gwilliam, head of property research at M&G Real Estate, noted: ‘We expect uncertainty during the Brexit negotiations to cause limited falls in capital values in the short term and commercial property remains a compelling asset class on a long term basis.’[1]

[1] http://www.propertywire.com/news/europe/brexit-negotiations-dent-uk-property-market-open-investment-opportunities/

 

 

Where is the best town for rental yields?

Published On: September 26, 2016 at 8:57 am

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The latest Buy-to-Let Index from LendInvest has revealed the top areas for rental yield growth over the year between August 2015 and July 2016.

Specifically, the Index focuses on postcode areas in England and Wales, looking where average yields have increased the most over the period.

Yearly yields

Blackburn came out on top spot, with average rental yields in the town rising from 4.13% to 5.69%- an increase of 37.8%. In addition, Blackburn is the cheapest area in the top ten regions for property buyers. Average house prices in the region currently stand at £95,000.

Carlisle came a close second, with rental yields spiralling by 36.5%. Gloucester came in third, with an increase of 19.4% in rental yields over the twelve months.

At the other end of the scale, Durham was found to be the worst region for rental yield growth. Here, returns have slipped by 34.2% in the year, from 7.09% to 4.67%. Durham was closely followed by Chester and Croydon.

Where is the best place for rental yields?

Where is the best place for rental yields?

Savvy

Christian Faes, Co-Founder and CEO of LendInvest, noted: ‘savvy property investors won’t only look out for which areas will offer the best returns right now, but are considering the best growth for the months and years to come. That means spotting areas which will become more popular in the future. That may be due to improved transport links, for example those towns which are due to be on the new HS2 line, or those which are due to benefit from new infrastructure projects, which will bring additional employment into the region.’[1]

[1] http://www.propertyreporter.co.uk/property/which-town-tops-the-list-of-buy-to-let-hotspots.html

 

 

Investment Firm Expands in Manchester Following High Landlord Demand

Published On: September 22, 2016 at 9:57 am

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Investment Firm Expands in Manchester Following High Landlord Demand

Investment Firm Expands in Manchester Following High Landlord Demand

Investment firm The Mistoria Group has expanded its business in Manchester, following high levels of landlord demand.

The high yielding property investment specialist has recently opened a new office in the heart of Castlefield, in Manchester’s city centre.

The new office, located at 2 Burton Place, is The Mistoria Group’s third office, alongside Salford and Liverpool. Acting as a hub for international enquiries, investment and sales for both UK and international investors, the new office will be staffed by a team of five.

The new Manchester office has been launched on the back of a surge in landlord demand for high yielding properties in the North West and a 35% rise in demand from international property investors.

The Managing Director of The Mistoria Group, Mish Liyanage, comments: “We have had a very successful year so far, achieving almost full occupancy for all the properties we manage on behalf of landlords, achieving 100% in Salford and 98% in Liverpool. We have been inundated with enquiries and still have a long waiting list for students wanting high spec, shared accommodation.

“Our new Manchester office will help us to continue grow our strong presence in the North West, supplying some of the best rental yields and investment opportunities that are available in the region. With the new international website underway, we have high hopes for the new office in developing our international aspirations, by expanding our offering to current and new overseas investors. Jerry O’Brien will head our international sales division.”

He explains: “We wouldn’t be able to achieve this success if it wasn’t for the great team we have working across the different divisions at Mistoria. It has been a very busy period for our lettings, marketing team and MCC Accountants. Everyone has worked very hard to ensure the smooth running of the business in the period approaching the 2016/17 academic year.

“Over the next 12 months, we will continue to do what we do best in providing some of the best high yielding investment in the UK and overseas.”

The Mistoria Group is a high yielding, student buy-to-let investment specialist, offering Houses in Multiple Occupation (HMOs) and armchair investments in the north of England.

North East rents rise over £600pcm

Published On: September 7, 2016 at 9:02 am

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New analysis has revealed that that average rents in the North East have gone above the £600 mark for the first time.

The report from sales and lettings firm KIS also shows that the typical rental yield in the area is now a record 4.6%.

Seasonal slowdown

In addition, further data from the report indicates that a summer slowdown in house prices in the North East saw values fall by an average of 2.3% per month in July and August.

This means that the average North East property is now valued at £157,438. Property values slipped in all of the twenty areas surveyed, with the exception of Whitburn.

Areas that saw the most sharp declines were Durham City, where prices fell by 4.2%, Houghton-le-Spring (3.7%) and Darlington (3.5%).

The regional fall in property prices is in conflict with a rise of 5.2% recorded at the same period last year. In 2015, prices actually increased by 3.8% in July and by 1.8% in August. In addition, the typical house price in the North East is presently 3.8% lower than in August of 2015.

Rising rents

North East rents continued to increase by around £10 pcm across the summer, reaching £610. This is the first time rents have exceeded £600 since records began. What’s more, rents have increased by 7.4% from the £565 recorded since the beginning of August.

Blyth is still the cheapest place to rent, with typical costs of £397 pcm. At the other end of the scale, Tynemouth is most expensive, with rents of £1125 per month.

The regions ‘Buy-to-Let capital’ is Peterelee, where investors can expect rental yields of 6.1%. Other strong performers are Gateshead and Killingworth (5.9%) and Sunderland (5.3%).

Falling property prices have seen the average North East rental return rise to 4.6% over the course of the summer months.

North East rents rise over £600pcm

North East rents rise over £600pcm

Strong

Ajay Jagota, founder and MD of KIS, observed, ‘the current strong performance of the North East rental market is no surprise to us here at KIS where we saw a 15% year-on-year rise in transactions in July, with August continuing that trend. There’s a hypothesis to be made that the Brexit vote has strengthened the rental sector while slowing growth in residential sales as people put off making long-term decisions like buying houses, but it’s important to remember that regional house prices are essentially unchanged since the vote, a clear sign that some of the more apocalyptic predictions have not even come close to coming true.’[1]

‘There can be no question that rising demand for properties has taken average rents above £600 a month for the first time. Obviously renters will not want to see this, but this rise is broadly in line with inflation and of course rents in our region remain close to 20% lower than the national average. From a landlords perspective there couldn’t be a better time to invest with strong rental demand and rental yields in the North East at an all-time high and property values dipping slightly following a period of consistent capital

[1] http://www.propertyreporter.co.uk/landlords/north-east-rents-go-above-600pcm-for-the-first-time.html

 

 

UK rents rise by 2.4% in year to July 2016

Published On: August 25, 2016 at 11:24 am

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Rents in Britain’s private rental sector rose by 2.4% in the year to July 2016, according the latest figures released by the Office of National Statistics.

This was the same rate of growth recorded in the twelve months to June.

Regional rental rises

Data from the report shows that over the year to July, rents in England rose by 2.6%, in Scotland by 0.2% and were unchanged in Wales.

In fact, rental prices increased in all regions of England during the period. The most prominent increase was in the South East, where rents rose by 3.5%. Next came the East, with increases of 3.1% and London with rises of 3%.

The smallest annual rises were reported in the North East, up by 0.9%. The North West recorded rises of 1.2%, with Yorkshire and the Humber showing increases of 1.3%.

Since the beginning of 2012, rental prices in England have increased by 1.4% and 3% year-on-year. However, the lack of forward movement in Wales means that rents here are well behind. Scottish rental increases have slipped from a high of 2.1% in the year to June 2015.

Figures from the UK House Price Index shows that over a longer period, residential house price growth has been greater than rental growth. Between January 2013 and June 2016, the average 12-month rate of house price inflation was 6%. This is in comparison to 2.1% for rental fees.

UK rents rise by 2.4% in year to July 2016

UK rents rise by 2.4% in year to July 2016

Deposit struggles 

An annual rise in rental prices has underlined the struggles that many people living in the private rental sector are facing in raising a deposit. Richard Connolly, chief executive officer of RentPlus has described this as the biggest barrier to homeownership.

He noted, ‘The issue of increasing rents is not confined to London with the largest rental price increases in the South East, followed by the East of England, which highlights the fact that housing affordability is firmly a national issue.  The struggles are numerous with aspirant home owners in the current climate also facing rising fuel bills, low salary growth and low interest rates from savings accounts.’[1]

‘This all points to the urgent need for a rethink in this country on the housing models that are used to migrate people into home ownership. New innovations such as rent to buy models, which allow people to benefit from affordable intermediate rents and make real savings toward a home of their own, ought to be part of an inclusive UK property market which provides secure affordable housing options for all,’ Connolly added.[1]

[1] http://www.propertywire.com/news/europe/uk-private-sector-rents-2016082512309.html

Northern cities still produce best student property yields

Published On: August 18, 2016 at 9:04 am

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Categories: Landlord News

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New research from property crowdfunding platform Property Partner has revealed that cities in the North of England still lead the way for student property rental yields.

Ahead of the new academic year, buy-to-let properties in Northern cities still come top of the class for potential returns.

Student success

Property Partner has constructed a list of 86 university towns and cities across Britain and Northern Ireland and ranked them in terms of rental yields expected in the local market.

Cities in the North East of England have seen A grades, with Sunderland topping the list with returns of 6.9%. Middlesbrough came next, with yields of 5.9%.

Birmingham took the third medal position, with Aston and Birmingham City University offering good demand for investors. Average house prices here stand at £116,732 per year, with expected yields 4.5%.

In Manchester, over 100,000 students are expected to descend on the city in September. All three Greater Manchester universities are the top-ten places for expected yields. What’s more, the city is experiencing substantial infrastructure projects and regeneration works in areas such as Salford and Deansgate, meaning an investment could prove very savvy in the long-term.

Capital Pains

However, it is a different story in London and the South East of England. Years of substantial house-price rises have moved to severely restrict buy-to-let yields.

Six of the bottom ten universities for rental yields are in London. Imperial College, located in Kensington and Chelsea, was found to be the lowest-yielding area surveyed, with yields of just 1.3%.

Dan Gandesha, CEO of Property Partner, noted, ‘in this era of ultra low rates and high market volatility, stable investments which provide a reliable income and medium to long-term capital growth prospects are the holy grail. Property is a total returns investment and until recently, it’s been a capital returns play.’[1]

Northern cities still produce best student property yields

Northern cities still produce best student property yields

‘But with Brexit, the rules of the game are changing. Now our investors are increasingly focussed on the reliable income they can earn, month after month. Property Partner enables anyone to invest in residential property all over the country, providing one-click access to grandparents, parents, and their college-age children, so they can take their view on the property market, wherever they study,’ Gandesha added.[1]

The top 20 university towns by average rental income by postcode were found to be:

University town Median Rent pcm Gross annual rent Average house price Average gross annual yield % Average net annual yield %
Sunderland £575 £6,900 £65,201 10.6 6.9
Teesside (Middlesbrough) £425 £5,100 £56,272 9.1 5.9
Aston + Birmingham City £676 £8,112 £116,732 6.9 4.5
Salford £750 £9,000 £131,863 6.8 4.4
Edinburgh £1,101 £13,212 £197,010 6.7 4.4
Manchester Metropolitan £895 £10,740 £160,315 6.7 4.4
Manchester £750 £9,000 £135,174 6.7 4.3
Newcastle + Northumbria £823 £9,876 £150,609 6.6 4.3
Nottingham + Nottingham Trent £794 £9,528 £151,535 6.3 4.1
Coventry £901 £10,812 £179,412 6.0 3.9
Bangor £750 £9,000 £156,173 5.8 3.7
Huddersfield £540 £6,480 £116,802 5.5 3.6
Portsmouth £925 £11,100 £201,434 5.5 3.6
Queen’s, Belfast £802 £9,624 £183,505 5.2 3.4
Edge Hill (Ormskirk) £1,040 £12,480 £239,298 5.2 3.4
Durham £650 £7,800 £151,438 5.2 3.3
Southampton £901 £10,812 £212,852 5.1 3.3
Cumbria (Carlisle) £477 £5,724 £113,025 5.1 3.3
Leeds £776 £9,312 £184,628 5.0 3.3

[1]

[1] http://www.propertyreporter.co.uk/landlords/northern-cities-continue-to-dominate-university-btl-scene.html