Posts with tag: rental yields

Birmingham is the new London for keen property investors, according to Surrenden Invest, which has been advocating the qualities of the Birmingham housing market for years.

Now, with London house prices falling for the last two years, increasing numbers of property investors are looking to Birmingham for their next investment.

The leading property investment company has assessed the latest data from Nationwide, which found that house prices in London fell by an average of 0.8% in the year to December 2018, following a 0.5% drop in 2017. 

By contrast, Nationwide’s figures show a 2.9% increase in the average property value in the West Midlands over the year.

However, it isn’t just London’s declining house prices that make Surrenden Invest such an advocate of Birmingham; the team was shouting all things Brum from the rooftops long before the capital’s property market began to wobble.

Jonathan Stephens, the Managing Director of the firm, says: “This simple fact is: Birmingham is an amazing city that has an awful lot going for it. Its business community is thriving, and there’s a palpable energy when it comes to startups and entrepreneurs in the city. 

“Birmingham’s residents demand the very best, whether that’s cultural attractions, retail outlets or the restaurant scene – and that’s precisely what the city delivers. This is a modern metropolis that is drawing in new residents by the tens of thousands, and for very good reasons.”

According to the latest Office for National Statistics population growth predictions, Birmingham’s population is expected to increase by around 166,000 people between 2018-41 – a rise of 14.5%. This is another factor driving the new wave of property investor interest in England’s so-called second city.

The rental yields on offer in Birmingham are another reason that attention is moving away from London, Surrenden Invest points out.

Then there’s the overall impact of regeneration work on the city. Grand Central’s opening in 2015 marked a step change in the way that many people thought about Birmingham. 

Now, the £500m Birmingham Smithfield master plan is taking regeneration to the next level. The Head of City Centre Development and Planning, Richard Cowell, has hailed it “an example to international cities”, with residents set to benefit not just from a new market area, but also from a museum, hotel, culture centres, leisure facilities and a 24-hour gourmet food hangout.

Stephens believes: “This is the new face of Birmingham – and it’s leaving London looking old and tired. When it comes to UK property investment, Birmingham is the place to be.”

Will you be looking to Birmingham for your next property investment? 

Buy-to-let yields for landlords have dropped to a three-year low, due to the effects of recent tax changes, according to the latest quarterly landlords panel by BM Solutions, covering the fourth quarter (Q4) of 2018.

The lender found that average buy-to-let yields have fallen to 5.6% on the previous quarter.

Those with large portfolios have been worst affected, with three quarters of landlords managing between 11-19 properties reporting a decline in profitability over the past three years.

Almost a quarter of buy-to-let landlords, especially those with larger portfolios, now plan to sell up and leave the private rental sector, with the research citing tax and regulation changes as the main reasons.

Despite that, some landlords are still planning to add to their portfolios, with one in seven investors preparing to purchase more properties.

The research also found that confidence among landlords in the UK financial market in the short-term has dropped by 8% year-on-year to just 9% – the lowest level in five years.

However, despite the decrease in their confidence levels, the majority of buy-to-let yields are still healthy, with 86% of landlords saying that they still make a profit from their property portfolios.

BM Solutions found that 31% of landlords make a full-time living from their lettings businesses, while 55% use their rental income to supplement their wages.

Phil Rickards, the Head of BM Solutions, says: “The buy-to-let industry has been through many regulatory changes over the past few years, and the effects of this are clearly being felt.

“However, the landscape is not entirely bleak. The proportion of landlords making a profit from their lettings activity remains at 88%, equalling the record high seen in Q3 2018.”

He adds: “It is clear that the market is sensitive to the current legislative and macro-economic environment, and this has been reflected in the latest findings.”

Landlords, have your buy-to-let yields dropped over the past year?

One and Only Pro, an AI-powered property investment portal, has named the North West as the best place to invest in buy-to-let property in England and Wales. The study ranked the top 172 buy-to-let locations using its unique algorithm.

Investment properties across England and Wales were given a score from one to ten, with the properties rated ten being the most likely to increase in value.

Dubbed the diamond property hotspots by the company, the five locations with the highest concentration of top scoring properties were found in the North West of England.

With 21% of diamond properties, Salford was top of the list. Properties in this area given the top score by One and Only Pro include a three-bedroom flat priced at £130,000, with a 12% potential rental yield and expected rental income of up to £1,300 per month.

Burnley came second, with 20% of properties showing the greatest investment potential, with Birkenhead and Bootle shared third place, at 16%. Blackpool (12%) took the last place in the top five.

These satellite towns are now expected to increase in popularity, due to their big city neighbours being overbought in comparison.

Despite the top five hotspots being located in the north, there are still diamonds to be found all across the UK. The One and Only Pro website also reveals a diamond in north London – a flat that boasts an 11.65% potential rental yield.

Henri Sant-Cassia, the CEO of the firm, says: “It is true that the North West is showing the greatest number of properties with investment potential, but a shrewd investor can find diamonds almost anywhere in the UK.  

“One and Only Pro has been designed to reveal those hidden gems, so even inexperienced investors can find the best deals in a particular area.”

He continues: “The top location in Wales, for example, was Swansea in position 28 out of 172 and Portsmouth comes in 32^nd place, claiming top spot for the south of England.  There are also 2% of properties on the market in London – in 60^th position on the list – that will see an increase in value and represent a solid investment.”