Posts with tag: rental yields

Fastest Growing Rental Yields Found in the North

Published On: February 11, 2020 at 9:59 am


Categories: Lettings News

Tags: ,

The North of England was the best region for rental yields in the final quarter of last year, as demand continued to outpace supply. 

According to data provided by Fleet Mortgages’ new buy-to-let index, rent as a percentage of property value rose by 2.6% in Q4 last year, rising to an average of 9.1% across the region. This is up from 6.5% in Q4 of 2018. 

In the south, Greater London yields edged up by 0.3% from 4.8% to 5.1%, whilst in the South West, yields held fast at 5.5%.

Across the country, average yields in England and Wales rose 0.7%. There was only one region to see a drop in rental yields compared to last year, and that was the North West, where they took a slight dip from 7.5% to 7.4%. 

Steve Cox,  distribution director at Fleet Mortgages, said: “Clearly, the market has shifted over the past 18-24 months as landlords get to grips with the increased costs that come with private rental sector activity, in particular the phased-in changes to mortgage interest tax relief for individual landlords.

Fastest Growing Rental Yields Found in the North“Landlords now tend to look differently at their properties, with many converting single-tenancy properties into multi-tenant ones in order to secure better yields. These higher yields are needed in order meet those growing tax liabilities, but to also offset the increased cost of acquiring tenants and regulation. Examples of these changes include more properties being converted into self-contained flats rather than keeping the property as a larger family home.”

Portico Reveals 8 Potential Property Hotspots for 2020

Published On: January 15, 2020 at 10:08 am


Categories: Property News

Tags: ,,,,

If you’re looking for somewhere new to invest this year, leading estate agent Portico has revealed eight potential London property hotspots for 2020.

With house prices in London remaining relatively flat over the last couple of years and wage growth increasing, the agent has calculated that it has become 10% more affordable to purchase a property in the capital.

Vatche Cherchian, Portico’s Regional Director, comments: “While house prices in London have remained relatively flat over the last couple of years, wage growth hasn’t. We’ve actually seen a 4% growth year-on-year in wages. And if you tally that wage growth increase up against flatlining London house prices, what you’re saying in real-terms is that it has become around 10% cheaper to buy a property, which is encouraging.”

There has also been an increasing demand for rental properties in London, but a low supply of stock. This has resulted in increasing rents and healthy yields.

The recent housing report from Tony Blair states that, if we see the Conservative manifesto proposals carried out, we could see a 26% rise in prices. For investors looking to use these factors to their advantage, Portico has used its extensive market research and London rental yield data to conclude the following property hotspots for 2020:

1. Barking & Dagenham 

Average house price: £318,527*

Average rental yield: 5.4%**

2. Sutton 

Average house price: £387,286*

Average rental yield: 4.4%**

3. Havering 

Average house price: £392,031*

Average rental yield: 4.9%**

4. Ilford 

Average house price: £421,226*

Average rental yield: 5.5%**

5. Newham 

Average house price: £445,425*

Average rental yield: 4.9%**

6. Redbridge 

Average house price: £488,632*

Average rental yield: 5%**

7. Hounslow 

Average house price: £497,758*

Average rental yield: 4.7%**

8. Tower Hamlets 

Average house price: £545,550*

Average rental yield: 4%**

*Rightmove data correct as of 16.12.2019

**Portico rental yield map data correct as of 16.12.2019

Top Tips for Investing in Rental Property

Published On: September 25, 2019 at 8:26 am


Categories: Landlord News

Tags: ,,

Following on from yesterday’s article on property investment in Liverpool, we’ve created a list of top tips for investing in property and making a profit from buy-to-let properties based on information provided by Simon Clarke from Acentus Real Estate.

  1. Location,  Location, Location
    Focus on finding out which cities have the best long-term growth in terms of house prices and other economic factors. Clarke cites Liverpool as an example of a city that ticks all the boxes when it comes to financial stability. From its employment rate to its upcoming infrastructure investments, the city has much that makes it attractive to those looking to profit from property over the longer term. 

  2. Location, Location, Location
    No, that’s not a typo. After choosing a city, narrow down your locale even further. Look at local amenities; are there nearby shops and bars? Is it near a frequent bus route or train station? Is it within walking distance to the business centre? Consider the quality of the neighbourhood, is it run down and lacking in investment or is it an up-and-coming area that could see growth in the next few years?

  3. Amenities 
    As well as outside of the building, think about what is included inside. Apartments that come with a concierge service, onsite gym and communal garden areas are increasingly important to renters, and as such, have a higher demand. Clarke says:

    “Next to location, a development’s amenities are one of the most important factors to consider before making an investment. If the building has features that make it stand out from the crowd, that’s going to increase its appeal to renters, helping to improve yields and avoid void periods.”

    In terms of location and amenities, you should be seeing your investment as somebody’s home rather than a cash cow. Invest in a property that tenants would be happy to live in and in return you’ll attract tenants that look after the property and pay their rent for many months and years to come.

  4. Get the Best Mortgage Deal
    There are plenty of buy-to-let mortgage products on the market these days. In fact, a quick search for buy-to-let mortgages on Compare the Market, using the site’s pre-filled criteria, results in 393 product options at the time of writing. With so many products available, investors who are using a mortgage for their buy-to-let property purchase have plenty of choice over the terms of their borrowing.

  5. Budget for Unexpected Costs
    Since the Tenant Fees ban came into force in June, landlords are supposed to be responsible for costs such as maintenance, management and letting agency fees. Understanding from the outset what these costs might be is an essential part of calculating your likely yields and the development’s ongoing viability. 

    A financially responsible landlord should not be simply hiking the rent price to cover these fees, and if that seems like your only option then maybe property investment isn’t the right option for you.

Liverpool landlords obtain the best short let yields at close to 30%

Published On: August 28, 2019 at 9:46 am


Categories: Landlord News


Short term let properties in Liverpool and Manchester are achieving the best yields in the North West of England, according to new research by short term letting agency Portico Host.

Landlords with short-term lets in Fairfield, Liverpool can expect to achieve a rental yield of 27.2%. In comparison, long-term let landlords in the same area are achieving a yield of 13.6%.

Portico Host says that the short let yield is based on an occupancy rate of 50% of the year, which is typical for these types of properties due to seasonal demand.

Of the ten best performing locations for short term let yields, the top eight are in Liverpool postcodes (L6, L4 and L7). In Manchester, the highest short let yields can be found in Hulme (M15) at 15.1%.

Table: Best performing locations for short term let yields in Liverpool and Manchester

AreaShort-let Yield (%)Short-let Gross IncomeRental Yield (%)Rental Gross IncomeAvg. House Price Postcode
Fairfield, Liverpool27.2%£32,88313.6%£16,716£126,779L6
Walton, Liverpool25.5%£18,4937.9%£5,700£72,317L4
Kensington, Liverpool24.2%£27,4059.8%£12,260£119,150L7
Kirkdale, Liverpool23.9%£15,9308.5%£5,786£73,564L4
Anfield, Liverpool22.7%£23,7669.6%£10,457£102,772L6, L4
Toxteth, Liverpool20.9%£13,7799.0%£5,775£74,250L8
Orrell Park, Liverpool17.5%£13,7797.5%£6,360£91,500L9
Vauxhall, Liverpool15.5%£20,8856.8%£ 20,885£ 139,061L2, L3, L5
Hulme, Manchester15.1%£20,1586.9%£9,080£133,333M15, M16
Levenshulme, Manchester13.6%£19,3856.2%£8,700£140,000M19

Rachel Dickman, Regional Manager, Portico Host, said: “It 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 1.34 million people visiting the city in 2018, including business travellers, students and young professionals.

“It’s also continuing to host and attract major sporting events, such as the Netball World Cup 2019 which recently took place in the M&S Bank Arena. These factors are resulting in a growing number of people wanting to stay in short-let properties in Liverpool, and the increased demand for this type of accommodation is underpinning the rents that can be achieved.”

Highest Rental Yields to be had from University Cities

Published On: July 19, 2019 at 9:03 am


Categories: Landlord News

Tags: ,

It has been revealed that almost all of the UK’s top 20 best postcodes for buy-to-let rental yields are nearby a university campus.

This information comes from new research released by lettings platform Howsy. The statistics provided by PropertyData calculated 12 months’ rent divided by the average property price in each area. It then ranked these postcodes from the highest rental yields to the lowest for buy-to-let landlords.

It has been determined that 17 out of the top 20 on this list are within easy reach of a university campus.

Number one on the list was BD1 in Bradford, providing a key student accommodation investment for landlords. The city centre is a short walk from the University of Bradford and average house prices currently sit at £54,938. Average monthly rent prices are at £468, meaning landlords look to receive a yield of 10.2%.

Other areas on the list include SR1 in Sunderland, with a potential yield of 9.4%, and L7 in Liverpool (close to both the University of Liverpool and the Royal Liverpool University Hospital), with a potential yield of 9.3%.

Calum Brannan, Founder and CEO of Howsy, commented: “It’s no coincidence that the vast majority of postcodes with the highest rental yields are found within a stone’s throw of a university campus, and for a safe bet on your investment, these are the places to look when buying.

“While students aren’t always the ideal tenants, they bring consistent demand via an annual flow of new arrivals, the void periods are generally much shorter, and the supply-demand imbalance puts the landlord in control when choosing a tenant.

“As a result, these hot pockets of buy-to-let demand offer landlords an investment option that is almost certain to provide a healthy return despite slower market conditions and uncertain times in the buy-to-let market. Couple this with Howsy’s 24/7 customer service that seems to resonate well with student tenants and their nocturnal lifestyle and you’re onto a winner.”

Lettings Income Supplementing Earnings for UK Landlords

Published On: July 4, 2019 at 8:24 am


Categories: Landlord News

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Recent research has shown that more than half of landlords use lettings income to boost earnings from a full-time job.

According to information gathered for Precise Mortgages, more than half (52%) of landlords have chosen this profession as an extra source of income. The study found that even those with bigger portfolios are still choosing to work full-time and have other earnings on top of those from letting.

Around 32% of landlords owning between 11 and 19 properties responded that lettings income supplements day job earnings. 18% of those with 20 or more properties have other income in addition to rental earnings.

Across the market one in three (33%) landlords have also responded that they earn their living purely from their property portfolios. When looking at those with six to ten properties, this figure rises to 47%. When asked about plans to add more properties to their portfolios, 16% of landlords said they were likely to in the year ahead. 71% intend to fund their purchases with a buy-to-let mortgage.

Alan Cleary, Managing Director of Precise Mortgages, has commented: “Given that the majority of landlords have other earnings that can be used to show they can meet underwriting standards, lenders need to reflect this in their product offering to support landlords accordingly.

“Top slicing allows landlords to manage their properties in a way they choose and gives them greater access to the products and loan sizes they want and particularly for those who may have been restricted by ICR requirements in the past.”

Precise Mortgages’ top slicing feature can help brokers and their customers to access its range of 2-year Fixed rate buy to let mortgages as well as its 5-year Fixed rate products. The specialist lender has also streamlined the application process and enhanced its online buy to let calculator.