Posts with tag: rental yields

Birmingham is the New London for Property Investors

Published On: January 28, 2019 at 10:57 am


Categories: Landlord News

Tags: ,

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 have Dropped to a 3-Year Low, Reports BM Solutions

Published On: January 25, 2019 at 10:02 am


Categories: Landlord News

Tags: ,

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?

London House Prices to Recover, Thanks to Booming Rental Yields

Published On: January 21, 2019 at 10:00 am


Categories: Property News

Tags: ,,

London house prices are set to begin a recovery this year, due to booming rental yields in some boroughs, according to analysis by

The property website expects the slump in the capital’s housing market to come to an end in 2020, thanks to improving rental yields making property more attractive to investors.

Home’s data suggests that this recovery is likely to begin in Newham, where, in December 2018, the average rental yield was 4.9%, compared to 3.6% in the same month of 2017. This 1.3% increase is the greatest rise in any London borough, apart from the City of London, where a 1.5% increase was observed.

The average rent price is Newham was £1,671 at the end of last year, which is up by 7.6% on December 2017.

The next hotspot for investors is set to be Hammersmith & Fulham, where the average rental yield rose by 1.2% over the year to December, from 3.9% to 5.1%. This promising increase comes amid growth of 6.2% in rent prices in this west London borough over the same period.

Other emerging areas for investors include Hackney and Southwark, where yields increased by 0.7% between 2017-18.

Outside of the City of London, Southwark recorded the greatest uplift in rents over 2018, at an average of 20.2%. A typical monthly rent price in this borough was £2,532 in December.

A 0.6% rise in yields was recorded in the City of Westminster and Tower Hamlets in the year to December last year.

Rents in Westminster increased by an average of 12.1% in the 12 months to December, taking the typical monthly price to £5,505, while rent prices in Tower Hamlets grew by 10.1%, to £2,350 per month.

Housing market recovery is set to take longer in many outer London boroughs, according to Home.

In Hounslow, Hillingdon, Harrow, Croydon, Waltham Forest, Richmond upon Thames, and Barking and Dagenham, rental yields remained unchanged between 2017-18.

Enfield, in north London, was the only borough to experience a decline in rental yields over the same period, of 0.2%.

The Director of Home, Doug Shephard, says: “You just can’t ignore the London property market’s remarkable ability to bounce back. History has shown us time and time again how the UK’s leading property market can burst back into growth after a period of correcting prices. The rate of rental yield rises is surely the best analytical tool to pinpoint where the first green shoots will emerge.

“Whilst it is encouraging that 32 out of 33 London boroughs are showing increased yield year-on-year, it is where they are growing most quickly that is of keen interest to investors. When they approach 6% in 16 or more boroughs, demand in the London sales market will reignite.”

Are you more inclined to invest in the London property market, now that it is due to recover?

North West the Best Place to Invest in Property in the UK

Published On: January 17, 2019 at 10:31 am


Categories: Landlord News

Tags: ,

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 32nd place, claiming top spot for the south of England.  There are also 2% of properties on the market in London – in 60th position on the list – that will see an increase in value and represent a solid investment.”

Rents Rising Below the Rate of Inflation, Reports Your Move

Published On: January 8, 2019 at 9:04 am


Categories: Lettings News

Tags: ,

Rent prices continued to rise below the rate of inflation in most UK regions during November, according to the latest report from Your Move.

The estate agent found that the average UK rent price rose by 1.8% in the year to November 2018, to hit £864 per month. This compares to a current inflation rate of 2.3%.

The greatest increase of the month was in the South West, at an average of 4.3%, taking rents to £701 a month, followed by 1.9% growth in the East Midlands, which took the average value to £663.

Rent prices in the East of England and London fell by an average of 1.1% and 0.9% respectively over the same period.

Private tenants in the East of England paid £881 per month on average in November, but those in the capital are still paying the most, at £1,263.

Your Move also found that landlords can now earn annual rental yields of 5% in the North East and 4.8% in the North West, due to low house prices and large student populations, which are resulting in good rent prices, meaning solid yields and few void periods for landlords.

Landlords in eight of the ten surveyed regions saw their yields remain firm between October and November.

The East of England and East Midlands both saw a marginal decline in yields over the month, with the former falling from 3.7% to 3.6%, while, in the latter, the typical return dropped from 4.3% to 4.2%.

London continued to record the smallest percentage returns, at an average of 3.2% during November. Across all of England and Wales, the average rental yield was 4.3% in the month – the same as in October.

Martyn Alderton, the National Lettings Director of Your Move, says: “Properties in the north appear to offer high percentage returns to property investors and, as a result, they are attracting interest even more.

“This strong appetite to buy has been accompanied by a rise in demand for rental properties, since the north is attracting many young professionals and families with its good transport links and job prospects.”

He goes on: “As the London market continues to gently slow down, other regions are coming to the fore and proving attractive to investors.

“In the South West, there was also good news and rental prices increased faster than anywhere else. The region boasts both the up-and-coming city of Bristol, and some of the most picturesque parts of the world in Devon and Cornwall.”

Your Move’s figures also reveal that the proportion of tenancies in rent arrears fell from 8.6% in October to 8.1% in November.

Average Rents Near London’s Elizabeth Line Up Substantially Since Construction Began

Published On: December 6, 2018 at 9:59 am


Categories: Lettings News

Tags: ,

Average rents along the Elizabeth line have increased at more than double the rate of the London average over the last six years.

There are 38 stations along the £15bn Crossrail project, and it’s had a major economic impact so far, in areas across the line.

London as a whole has seen a slowdown in rental growth, at 8.2%. However, since construction started in 2012, rents to the East of the line have seen the strongest levels of growth, in particular Southall, with average rent prices up by 38.19%.

Why have rents increased so much around the Elizabeth line?

Despite the delay in the opening date, from Autumn 2018 to Autumn 2019, the Elizabeth line is expected to transform the way people travel into London from the South East. This means easier access for commuters getting into the city centre, and more opportunities opening up for those looking for work in those areas.

What levels of growth can be expected in different areas?

As above, the station that has seen the highest rental growth is Southall, which is up by 38.19%. Manor Park and Romford to the East have seen rents increase by 37.24% and 30.47% respectively, and rents in Abbey Wood are up 26.51%.

In Ilford, prices are up by 27.24%, Seven Kings by 26.09%, Goodmayes 25.18% and Chadwell Heath 27.35%, all to the east of the line.

Towards the West of the line, Burnham has seen increases of 26.02%, Iver 28.03% and Hayes and Harlington up by 21.05%.

Three stations have seen local rents fall since 2012, although much less significantly. Taplow has decreased by 2.02% and Canary Wharf and Maryland decreased by 0.09% and 6.51% respectively.

John Goodall, Chief Executive officer of Landbay, comments: “The Elizabeth Line will improve access to the centre of London for thousands of commuters, but it comes at a premium for renters.

“The prospect of better transport links is creating higher demand for property in these areas. As a result, house prices and rents alike have increased, which for many landlords is an attractive proposition due to the prospect of extra return on investment,” he added.