Posts with tag: Sequre Property Investment

Outer city rental markets continue to show stronger growth vs inner city

Published On: November 1, 2021 at 9:59 am

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Rental homes in outer city areas have seen stronger growth over the last year, while inner city rental properties continue to command a higher monthly rental income, says buy-to-let specialist Sequre Property Investment.

Its research involved an analysis of rental market data for London, Manchester and Birmingham, revealing how it differed when comparing inner and outer city area.

Sequre Property Investment reports that inner city rental markets attract the strongest levels of monthly rent. On average across all three cities, the monthly cost of renting within an inner city area is at £1,152 versus £908 per month in the outer city market, highlighting a difference of 27% or £244 per month.

The biggest difference has been recorded in London, where rents across the inner city rental market are 37% higher on average. In Manchester there was an increase of 26% and in Birmingham it was 9%.

Looking at annual rental growth, however, it has remained largely flat in the outer city areas, while across inner city rental areas it has fallen -4.4% in the last 12 months.

Manchester has performed the strongest, with inner city rental values remaining largely unchanged in the last year, while across the city’s outer rental market values have climbed by 3.7%. In Birmingham, outer city rental values are up 2.2% versus a marginal 0.3% uplift across the inner city.

London’s rental market has struggled across the capital, with only a 1.1% increase in rental values across outer city areas and a -7.8% drop across inner city areas.

Daniel Jackson, Sales Director at Sequre Property Investment, commented: “It’s clear inner city rental markets are still struggling due to the decline in demand caused by the pandemic, despite a gradual return to normality from a social standpoint and with regard to the workplace.

“This is particularly evident across the London market, where rental values have plummeted across inner city areas, while they’ve also struggled in outer city areas. 

“The good news is that elsewhere, outer city rental values are on the up, with both Manchester and Birmingham seeing very healthy levels of growth. This suggests that tenants are now starting to make their return and this is a trend that should soon reach our city centres and help boost values across inner city rental markets.”

The current rental values for inner and outer city rental markets and the inner city rental premium

CityInner city average rent 2021 (per month)Outer city average rent 2021 (per month)Inner city rental price premium
London£1,874£1,37237%
Manchester£838£66726%
Birmingham£743£6859%
Average£1,152£90827%
Data sourced from the Office for National Statistics – Private rental market summary statistics

The current rental values for inner and outer city rental markets and the annual change across both

CityInner city average rent 2021 (per month)Inner city annual rental changeOuter city average rent 2021 (per month)Outer city annual rental change
London£1,874-7.8%£1,3721.1%
Manchester£8380.0%£6673.7%
Birmingham£7430.3%£6852.2%
Average£1,152-4.4%£9080.1%
Data sourced from the Office for National Statistics – Private rental market summary statistics

Tenant issues sits top of reasons why landlords look to sell in the next five years

Published On: July 29, 2021 at 8:12 am

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Despite government changes to Stamp Duty, tax relief, and a potential change to capital gains tax, UK landlords remain undeterred where their investment intentions are concerned, says Sequre Property Investment.

Research from the buy-to-let property investment specialist has found that just 10% of landlords have sold part of their portfolio in the last five years. Just 19% stated they were thinking of selling up in the next five years.

The research also found that the majority of landlords thinking of selling up are doing so because they have become tired of dealing with tenant issues. A close second reason was retirement.

Daniel Jackson, Sales Director at Sequre Property Investment, comments: “Investing in property remains one of the safest options you can make in this day and age and so it comes as little surprise that the majority of landlords remain confident with their investment and have no plans to exit the buy-to-let sector.

“It’s also interesting to see that the Government has failed to intimidate the nation’s landlords, despite a consistent campaign to reduce profit margins and force them out of the sector. In fact, more landlords have decided to leave having grown tired of dealing with tenants than they have because of various government tax changes.

“So, it looks as though the Government will have to actually build some more homes if they wish to address the current housing crisis, rather than rely on hard-working landlords to boost the nation’s property stock levels.”

Landlord survey results

Have you sold part or all of your buy-to-let portfolio in the last five years?
AnswerRespondents
No90%
Yes10%
Do you intend to sell part or all of your buy-to-let portfolio in the next five years?
AnswerRespondents
No81%
Yes19%
What has been the driving factor behind this? (Tick all that apply)
AnswerRespondents
Tired of dealing with tenant issues24%
Retirement23%
Changes to landlord tax relief19%
Increase in stamp duty tax for B2L purchases12%
Investing in a different asset11%
A potential increase in capital gains tax11%

Private rental market valued at £1.4trn in current market conditions

Published On: July 27, 2021 at 8:27 am

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The current bricks and mortar value of the UK private rental sector (PRS) now sits at almost £1.4trn, research from Sequre Property Investment shows.

The buy-to-let specialist has compiled data on the number of current private rented dwellings across England, Wales, Scotland and Northern Ireland, and calculated the total value of these rental portfolios based on current property values.

The company estimates there are 5.5m privately rented homes across the UK, accounting for 19% of the entire property market. With the current average UK house price now at £254,624, this puts the PRS bricks and mortar value as high as £1.4trn.

4.8m homes within the sector reside within England alone. This places the total value of the English rental market at £1.3trn based on the current average house price of £271,434.

London accounts for 40% of this total market value, with the 1,042,000 rental homes located in the capital valued at nearly £519bn.

The South East (£234bn) and the East of England (£154bn) are also home to some of the most valuable rental markets, with rental stock in each region estimated to be worth more than £150bn.

Outside of England, Scotland ranks as the second most valuable rental market from a property standpoint, with the 371,000 privately rented homes worth nearly £64bn on the market.

In Wales, this current rental market value stands just shy of £38bn, with the Northern Irish private rental market valued at nearly £18bn.

Daniel Jackson, Sales Director at Sequre Property Investment, comments: “The private rental market is the backbone of the UK housing sector and plays an incredibly important role in providing homes for those that are unable to overcome the financial hurdles associated with homeownership.

“Despite this, we’ve seen a number of legislative changes implemented to deter landlords from the sector by a government that clearly has no idea what they are doing.

“While it may only account for 19% of the total market, reducing the size of the sector would leave many struggling to find an alternative option with regard to their living arrangements.”

The estimated worth of the dwellings within the PRS based on the number of dwellings and the current market value of a home in each nation or region.

LocationAll dwellingsPrivate rentedPrivate rented as a % of allAverage Property ValueTotal est value
United Kingdom29,559,7775,493,83018.6%£254,624£1,398,860,363,632
      
England24,658,0004,799,00019.5%£271,434£1,302,611,145,489
Scotland2,650,000371,00014.0%£171,448£63,607,184,256
Wales1,437,567204,95514.3%£184,297£37,772,604,137
Northern Ireland814,210118,87514.6%£149,178£17,733,512,868
      
London3,634,0001,042,00028.7%£497,948£518,861,773,174
South East3,985,000670,00016.8%£350,016£234,510,389,824
East of England2,733,000497,00018.2%£310,200£154,169,527,431
South West2,604,000506,00019.4%£277,603£140,466,965,340
North West3,334,000556,00016.7%£189,245£105,220,424,552
West Midlands region2,537,000451,00017.8%£219,793£99,126,788,132
Yorkshire and the Humber2,461,000482,00019.6%£181,856£87,654,406,816
East Midlands2,124,000391,00018.4%£216,077£84,486,121,936
North East1,246,000203,00016.3%£143,129£29,055,143,233

Average house prices sourced from the Gov.uk – UK house Price Index (May 2021 – latest available).

Dwellings stock and tenure sourced from Gov.uk, Gov.walesNRS Scotland and Gov.scotNISRA and finance-NI-gov.uk.

Private rental market worth £1.3trn in current market conditions

Published On: June 23, 2021 at 8:22 am

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There is some £1.3trn worth of housing stock within the private rental sector, research from buy-to-let specialist Sequre Property Investment shows.

Sequre’s analysis of stock rented either privately or via a job or a business found that despite declining from a high of 4,832,000 in 2016, there are still some 4,799,000 privately rented properties across England. The company says this is the second-highest level on record despite a string of government attempts to dampen the financial return on offer to landlords within the sector.

The highlights of Sequre’s research include:

  • London accounts for 22% of all private rental stock in England. With the capital also home to the highest average house price, it means the London rental market is worth a staggering £512bn alone.
  • The South East is home to 14% of all private rental stock and the second most valuable rental market at £229bn.
  • Despite only accounting for 10% of private rental dwellings in England, the East of England is home to the third most valuable rental market at £156bn.
  • Although both the South West (11%) and North West (12%) are home to a slightly larger proportion of private rental market stock, marginally lower property prices mean they trail the East of England slightly in terms of total rental market value at £142bn and £102bn respectively.
  • The North East accounts for just 4% of all rental market stock, the lowest of all English regions. But despite this, the region is still home to a private rental market made up of £29bn worth of bricks and mortar.

Daniel Jackson, Sales Director at Sequre Property Investment, comments: “The private rental sector has grown considerably in recent times, both in terms of the level of stock available, but also where the value of this stock within the wider housing market is concerned.

“Not only does this demonstrate the continued strength of the sector, but it also highlights its importance as the backbone of the private rental market. Without it, the government would be left with a shortfall of nearly five million homes and given their consistent failures in addressing the current housing crisis, this would no doubt be yet another obstacle they would fail to overcome.

“Fingers crossed they’ve now realised the importance of the rental market given the fact a widely expected increase in capital gains tax failed to materialise during the last budget. While a buy-to-let investment will predominantly focus on the yields available, the capital appreciation of a rental market investment is an additional benefit that many landlords can reap on exit. Had the government decided to penalise this, a mass exodus of landlords would no doubt have followed.

“Of course, while the overall value of the rental market is higher in the south, the north can present some very good investment opportunities. Those looking to these more affordable regions can realise yields in excess of 8% in the right areas, which gives them more scope for building cash flow and as well as seeing capital growth.”

LocationPrivate rental stockProportion of the private rental marketCurrent average property valueTotal estimated value
London1,042,00022%£491,687£512,337,654,457
South East670,00014%£341,358£228,710,159,423
East of England497,00010%£313,964£156,040,267,090
South West506,00011%£279,951£141,655,220,320
North West556,00012%£183,299£101,914,249,115
West Midlands region451,0009%£216,973£97,854,677,282
Yorkshire and the Humber482,00010%£179,408£86,474,652,915
East Midlands391,0008%£213,308£83,403,614,468
North East203,0004%£144,032£29,238,467,397
England4,799,000100%£268,380£1,287,953,882,762
SourcesGov.uk – Live tables on dwellingsGov.uk – UK House Price Index