Posts with tag: property investment

BoE’s chief economist says property investment better than pension

Published On: August 31, 2016 at 10:11 am

Tags: buying a property,housing crisis,pensions,property investment

The Bank of England’s chief economist has moved to suggest that investing in property is a better option for retirement than paying into a pension.

Speaking about preparation for retirement in the Sunday Times, Andy Haldane noted that, ‘it ought to be pension but it’s almost certainly property.’[1]

Shortage

Mr Haldane owns two properties but pointed to the fact that there is a severe housing shortage across the country. In turn this is driving up prices and placing upward pressure on properties.

Haldane said, ‘as long as we continue not to build anything like as many houses in this country as we need to…we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north.’[1]

Residential property investment returns-rental income and capital growth-are continually outperforming other mainstream investment types. These include commercial property, UK Government bonds and a more secure alternative to the volatile stock market.

Agreement

A number of property experts have moved to agree with Mr Haldane’s comments, including Graham Davidson, managing director of Sequre Property Investment.

BoE’s chief economist says property investment better than pension

Davidson observed, ‘poor returns, hefty fees and inconsistent annuity rates have caused the number of Britons taking out pensions to fall considerably. As Mr Haldane has pointed out, bricks and mortar continues to out-perform many other more volatile investments, providing stable returns with the added benefit of owning a tangible asset, unlike stocks and shares. This is particularly important for the older generation, many of whom will look to hand down their investment to family members.’[1]

‘Our figures support Mr Haldane’s claim, with 46% of our investors citing investing for their pension pot as their primary motivation for choosing buy-to-let property and 95% of investors purchasing with their pension in mind.’[1]

Opposition

However, not all experts are in agreement. Ros Altmann, former pensions minister, labelled Haldane’s comments as, ‘divorced from reality.’ He also said it was, ‘irresponsible’ to think people should rely on property over pensions.

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/8/investing-in-property-is-better-bet-than-a-pension-says-boes-chief-economist

Which University City Should You Invest In?

Published On: August 24, 2016 at 8:36 am

Author: Em Morley

Categories: Landlord News

Tags: property investment,student landlords,student property,student tenants,university cities

Following on from A-level results day last week, many students across the country will be looking to move to a new university city for the first time.

Online estate agent eMoov.co.uk has since released its annual University Property Index, which highlights the best cities in the country to invest in, based on UCAS entry level and property prices.

The agent has ranked the top 100 UK universities by dividing the average house price in the area surrounding the main campus by the average UCAS point entry requirement, to determine the average property price per UCAS point required to study at each university.

Which University City Should You Invest In?

The research has found which university city in the UK offers the best balance of affordable property for those considering an investment and a top quality higher education.

The average house price in the top 100 university cities stands at £319,963, with the University of Leeds coming out on top. With an average entry requirement of 436.5 UCAS points and an average property price of just £95,310, Leeds has a house price per UCAS point of just £218.

Contrastingly, the Imperial College London is in 100^th place, due to the sky-high house prices surrounding its Kensington campus. Although the prestigious institution requires 566.9 UCAS points on average – the third highest in the top 100 – the average property price is a whopping £2.5m, resulting in an average price per UCAS point of £4,431.

The University of Sunderland ranked in second place in the table, with an average UCAS requirement of just 290.5 – the eighth lowest in the top 100 – and an average house price of £65,201. This equates to an average price per UCAS point of just £224.

Making up the top ten are the University of Bradford (£269), University of Leicester (£301), University of Hull (£305), University of Manchester (£308), University of Dundee (£313), University of Strathclyde (£315), Aston University (£320) and Newcastle University (£349).

The complete top 100 can be found here: https://www.emoov.co.uk/university-property-index-2016/

The founder and CEO of eMoov, Russell Quirk, says: “University is often the first life step for those leaving home to study, and the cost implicated in doing so are high, with many not paying off their student debt until years after graduating.

“Investing in a property for your child can be one way of reducing the cost and can act as an additional source of income for years to come. When looking for somewhere to stay at university, as with a job, properties close to the campus are always going to be a more attractive proposition, and so buying in and around the university can help ensure interest in a property from the get go.”

He adds: “This research highlights where across the nation offers the most attractive proposition for a uni-let, in terms of close proximity to the university, an affordable property price, as well as a good level of education where the university itself is concerned.”

Landlords, are you looking for a student property investment in one of these university cities? These tips will help you prepare your property for new students: https://www.justlandlords.co.uk/news/prepare-property-for-student-tenants/

Student Property will be Top of the Asset Class for Landlords, Says JLL

Published On: August 22, 2016 at 9:25 am

Author: Em Morley

Categories: Landlord News

Tags: Manchester,property investment,student landlords,student property,student tenants

As college students across the UK prepare to go to university, property firm JLL believes student property will be top of the asset class for landlords following Brexit.

Student Property will be Top of the Asset Class for Landlords, Says JLL

JLL’s Student Housing team has projected rental growth of between 3-4% in London and 1-5% across the UK market for student property. Prime yields are also expected to remain robust, with good occupancy rates and attractive income growth for the 2016/17 academic year.

The Director of JLL’s Student Housing team, Huw Forrest, reports: “While it is too early to have definitive views on the impact of Brexit on the student housing sector, it is likely to remain more resilient than other sectors. This is due to the continued attraction of the UK university market, coupled with the depreciation of sterling, which will make the UK a more affordable destination to study for international students. It is also important to remember that EU students make up only 6% of students.

“We are currently seeing good levels of investment demand following the referendum and, generally, transactions we are working on have seen little impact as a result of the Brexit vote.”

JLL’s 5% rental growth prediction for student property is echoed by Jean Liggett, the CEO of Properties of the World, who believes that Manchester in particular will see such growth.

She comments: “The UK provides world-class education in a number of highly regarded institutes across the country. In fact, three of the top ten universities in the world are located in the UK. As a result, there will continue to be a growing demand for accommodation close to these universities, causing an increase in rents that will in turn provide higher returns for potential investors.

“What buyers like about this type of investment, post-Brexit, is the fact that they provide a fixed rate of return, have no extra costs during ownership and mitigate risk, subsequently giving them peace of mind. There will always be a high demand for good quality student accommodation. In our eyes, the sector will remain resilient.”

Manchester is already home to a booming student population, which is only expected to expand again this academic year. A spokesperson for the University of Salford states that it is expecting to see an increase in applicants for the start of the 2016/17 year.

Landlords, are you considering a student property investment? Remember that students can be some of the most reliable tenants, which is vital at this time of economic uncertainty.

Rental Yields of 8%+ Still Possible in London

Published On: August 10, 2016 at 11:07 am

Author: Em Morley

Categories: Landlord News

Tags: buy to let investment,London,London property market,property investment,rental yields

Although soaring house prices in London make it difficult for landlords to achieve high rental yields, London estate agent Portico has found that returns of 8%+ are still possible in the capital.

The agent has used its innovative Interactive Yield Map to analyse each London borough on a street level to find the highest potential yields for landlords.

Rental Yields of 8%+ Still Possible in London

The data found that the highest rental yield, of 8.3%, was found in the borough of Havering, in the Romford postcode area around Whybridge Junior School. The average monthly rent price for a two-bedroom flat in the area is just £1,156, which is £600 less than the average monthly rent of £1,756 across the capital as a whole.

Portico found that outer London boroughs offer the highest yields generally, with areas within Barking and Dagenham, Bexley, Redbridge and Bromley all offering yields of 6% or over.

The suburban district of Chadwell Heath in Barking and Dagenham – where the Crossrail service is set to launch in 2019 – offers landlords an impressive yield of 7.6%. Here, landlords can expect to charge a monthly rent price of £1,278.

In inner London, the strongest rental returns and most affordable monthly rent can be found in Greenwich. On the Pelton Road, Bellot Street, Blackwall Lane, Armitage Road and Millennium Way roads around north Greenwich station, landlords can expect a 6% yields with an average monthly rent of £1,477.

If you are thinking of investing in prime central London, however, yields range from 2-4%. The highest, 4.8%, can be found on the northern end of Finchley Road in Westminster, while the area around the World’s End Estate in Kensington and Chelsea offers a 3.8% return.

The Managing Director of Portico, Robert Nichols, comments: “The rental market has remained strong post-Brexit, but landlords still need to be smart about where they are investing, as a very small difference in yield can determine whether they make a profit or a loss.

“If you’re thinking of buying to let, transport links are key. London’s commuting tenants want to be within close proximity of a Tube, so look for properties near new developments such as Crossrail and Crossrail 2.”

He suggests: “Havering, Barking and Dagenham, and Bexley, which will soon have stations on the eastern edge of the Elizabeth Line, are clearly key investment hotspots where landlords are achieving extremely impressive yields.”

Landlords, will you take advantage of the high rental yields still on offer in the capital?

Prime Central London Property Investment Opportunity

Published On: July 7, 2016 at 9:26 am

Author: Em Morley

Categories: Landlord News

Tags: London property market,prime central london,property investment,property investors

A new opportunity to invest in prime central London property is now open to investors.

London Central Portfolio (LCP) has announced London Central Apartments (LCA) III, its latest listed residential property investment company. Alongside its tax benefits, LCA III is set to take advantage of current market conditions.

The chance to invest in the new scheme will close on Monday 25^th July.

LCA III offers investors an opportunity to subscribe for shares in a quoted investment company holding around 40 high performing properties. Further acquisitions are expected to be made, targeting central London’s buoyant private rental sector. A projected portfolio return in excess of 10% per year is forecast.

Why invest in prime central London property?

Prime Central London Property Investment Opportunity

Prices in the capital’s prime market have risen by 10.2% per year on average over the past 20 years, now standing at over £1.67m.

Although past performance may not be repeated and projected returns may not be achieved, growth in the market is supported by many factors:

Central London’s international appeal
Strength in the City of London
Strong education sector
Rule of law
Political and economic stability

Additionally, stock is limited in the capital and demand substantially outweighs supply. Each year, on average, just 289 new units are developed.

Current market conditions

Following the UK’s vote to leave the EU and the resignation of the Prime Minister, David Cameron, prime central London property is expected to benefit from a flight to quality and the security of blue-chip tangible assets, against a background of highly volatile financial markets.

LCA III focuses on the private rental sector, which represents 38% of prime central London’s residential market. The company intends to take advantage of the predicted bounce-back following the Brexit.

For international investors, LCA III is a chance to capitalise on attractive foreign exchange rates, as sterling has been driven to historic lows. It is expected that the Bank of England will at least keep interest rate rises on hold, although a cut is probable, further benefitting investors.

The scheme

LCA III will acquire a portfolio of one and two-bedroom units in prime locations, add value through refurbishment and professionally let and manage the properties.

Although recent tax announcements could be subject to change, LCA III is exempt from most of the new UK residential taxes being introduced – such as a reduction in mortgage interest tax relief – providing investors with higher returns than direct buy-to-let investment.

LCP believes that the Brexit vote creates an investment opportunity for new investors, but is obliged to warn potential backers that there is investment risk and a possibility that the value of any investment may go down.

However, it claims that despite the negative sentiment surrounding the UK economy post-Brexit, prime central London property will prove resilient to the downturn and will respond in a similar way as it did following the global financial crisis, when prices surged.

It adds that this strength is likely to contrast to the rest of the housing market across the country and commercial property funds, which are both much more susceptible to a domestic economic downturn.

With a very short window to invest in the scheme, find out more information here: http://www.londoncentralportfolio.com/Hidden-Files/LCP/LCA-III/LCA%20III%202016%20V30.pdf

Record Month for Buy-to-Let in June, Despite Brexit

Published On: July 6, 2016 at 8:35 am

Author: Em Morley

Categories: Property News

Tags: Brexit,Buy-to-Let,EU referendum,Northern Powerhouse,property investment

Finance and property advisory firm Nova Financial has reported a record month for buy-to-let transactions in June, despite last month’s shock Brexit vote.

The company’s Managing Director, Paul Mahoney, has experienced a surprisingly positive reaction from landlords in the face of the leave vote, and believes that this confidence will continue throughout the rest of the year.

Record Month for Buy-to-Let in June, Despite Brexit

“The response we’ve received from clients who are in the process of purchasing buy-to-let properties following the Brexit vote has been far more positive than one might expect, and most are of the opinion that it is business as usual,” he says. “In fact, we at Nova Financial posted a record month for transactions in June, with more of the same expected for July.”

Indeed, recent reactions from those in the property industry suggest that landlords could in fact benefit from the Brexit outcome.

However, Mahoney believes that the confidence shown by his firm’s clients is due to their interest in cities such as Manchester and Liverpool, which form part of the Northern Powerhouse. Additionally, the North East has shown resilience following the Brexi t, with house prices up by 4.8% over the past month.

Despite this, there are concerns within the sector that the Northern Powerhouse scheme may be in danger now that David Cameron has resigned and Chancellor George Osborne’s career remains uncertain. If the scheme does fail, investors in these areas could see their returns dampen.

Although confidence in northern cities has remained strong following the vote, Mahoney reports that landlords seem more concerned about the referendum’s effect on the London property market.

“It seems buyers are more concerned regarding the potential negative impact on the London market, as opposed to other cities,” he states. “We as property advisors agree with this attitude and view the London property market outlook as fairly sombre, whereas the main northern cities still provide very strong fundamentals.”

While investors and advisors may be feeling uncertain about investment in the capital, one investment firm insists that the London property market will prove resilient to the Brexit.

If you are considering a buy-to-let investment in the near future, which area will you choose?