CategoriesInvestor Advice

4 Reasons To Invest In Liverpool Property

Liverpool is considered one of the best places in the UK for property investment. The city is vibrant, with an eclectic mix of students and professionals complementing the diverse and rich culture.

Totally Money included 6 Liverpool postcodes in their list of the ‘top 25 UK postcodes to invest in a buy-to-let mortgage’. House prices in Liverpool sit well below the market average, yet rental incomes remain high. It is no wonder businesses and investors choose this area in the north over many more expensive properties in the south.

Liverpool has cemented itself as a core city in the northern powerhouse, with excellent train links connecting the area. Additionally, the long-awaited completion of the HS2 high-speed rail network means that the journey from Liverpool to London will take just 94 minutes.

The spotlight on the north is continuing to shine, with many businesses and investors choosing lower cost homes with stronger yields.

In this post, we’ll look at why you should consider investing in Liverpool property.

4 Reasons To Invest In Liverpool’s Property Market

1. A Revived and Thriving City

In 2008 Liverpool was awarded the city of culture. Since then, through various regeneration schemes, the city has been transformed. From shopping centres to sports stadiums and even the dock itself. Liverpool has been given a new lease of life which has seen a plethora new residents flocking to the area.

Not only did this regeneration spark a boom in tourism, but businesses saw the vast opportunities in the city. Large firms began building bases in Liverpool, appreciating the exceptional transport links and the city’s industrial heritage.

This means that demand for property in the city has skyrocketed, particularly high-end, centrally based accommodation.

2. Successful Student Community

Liverpool is home to four universities that attract students from around the globe.

Whilst most students opt for university halls in their first year, they are demanding high quality, functional and central locations for their final years, and they are willing to pay a premium for it.

This demand for student accommodation is set to rise in the coming years, with the local universities becoming increasingly popular. Private rental properties are needed to make up the shortfall of beds in student accommodation.

Houses in Multiple Occupation are often investors favourites, which are perfect for the ever-growing student population.

3. A Booming Business Area

This flourishing student city provides the perfect stream of fresh graduates every year to complement the local businesses.

Liverpool beautifully and effortlessly manages to blend a thriving scene of start-up companies with established businesses that have been household names for decades.

For those looking to invest in local residential or commercial property, the options are endless in Liverpool.

4. A Luxury Lifestyle

Liverpool offers its residents a luxury lifestyle that many other cities outside of London struggle to match. It is popular with students, young professionals, and families alike, willing to pay a premium to live in such a vibrant and exciting city.

It is a lively city packed with galleries, museums and, of course, the iconic waterfront.

The city draws tourists from around the world, all eager to experience the legendary nightlife. From the famous Beatles trail to the bustling underground music scene, there is a night out for everyone to enjoy in the city. Aside from the iconic music venues, Liverpool is football crazy, with tourists from all around the globe visiting the stadiums every year.

Reach out to the team at Track Capital to discuss our Liverpool property investments.

 

CategoriesInvestor Advice Tips & Tricks

The Benefits of Remote Property Investment

Remote property investment is on the rise.

It offers the freedom to invest anywhere in the world, from the comfort of your own home.

Remote property investment provides investors with the freedom to rapidly build their portfolio with a range of properties in different locations, and at various price points.

What Does it Mean to Invest Remotely?

Property investors no longer want, or need, to physically visit properties.

Not all real estate markets are created equal. So, knowing that you can easily invest in property in other cities, countries, or even continents means that investors can reap the rewards without having to commit to the regular travel that traditional investment required.

Remote property investors generally work with a local property investment company. This local company will typically have a portfolio of properties and will be able to connect the buyer with local lawyers and currency exchange services.

Working remotely takes the stresses away from investing. It makes the process much faster, allowing investors to reap their rewards much more quickly.

Remote Investments Allows You to Diversify

Investing remotely means that the world is quite literally your oyster. It allows you to overcome geographic limitations and diversify your portfolio.

Investors can tap into up-and-coming markets with exceptionally high rental yields, regardless of where in the world they are based. Sticking close to home can be risky, as one market crash and your whole portfolio could be in trouble.

For those with a particular passion for commercial property, the market close to home may simply not be broad enough, and remote investment allows you to expand your portfolio without the commitment of regular travel.

Allows for Differences in Risk Appetites

Working remotely allows investors to navigate regional economic downturns, using the power of local investment companies to build in areas that are currently flourishing.

Of course, there are risks associated with every investment, and real estate is no exception to this. Yet, every investor will inevitably have a different appetite for risk. For those who want something more secure than their local area can offer, remote investment provides the solution.

Keeps Things Strictly Business

Remote property investment ensures no emotional connection is developed between investor and property.

This makes it much easier to make intelligent financial decisions, allowing investors to expand their assets.

Speeds Up the Whole Process

Working with a dedicated property investment company means that you have access to the best assets in a range of locations, as well as knowledge of the latest off-plan builds. This means decisions can be made quickly, and sales are generally completed in a much more timely manner.

Property investment should provide you with a passive income, and working remotely allows for a completely hands-off approach. Many investors favour this method, especially when trying to scale their businesses.

For Commercial and Residential

There appears to be a myth that remote property investment is only for those looking to invest in commercial property. Whilst the commercial market is popular, remote working is ideal for every asset class.

Every property investor knows the value of Houses in Multiple Occupation, and student lets. Remote investing allows you to scale rapidly, using an investment company as an inside track into the thriving student markets.

How Track Capital Can Help

Successful remote property investment centres on surrounding yourself with a strong team.

Track Capital is a transparent and passionate property investment company based in the UK. We pride ourselves on finding the best possible investments for our clients, providing a bespoke service to ensure properties align with their investors.

We are also proud to offer comprehensive after-sales support, a crucial element to ensuring smooth remote property investments.

The best part: we do not charge our investors a penny.

To find out more today, contact Track Capital on +44(0)203 627 3987 or [email protected].

 

UK Property Investment Recession
CategoriesInvestor Advice

Where is the best area to buy property in a recession?

The UK last entered recession in the second quarter of 2008. House prices started rapidly decreasing, with the average house price hitting a rock-bottom low of £154,452 in March 2009.

Ever since, average prices have – by and large – kept increasing. As of March 2020, the average house price in the UK stood at £233,716 – an uplift of 51% in 11 years.

Many savvy buyers will have benefited greatly from buying low and waiting for the market to recover. Even more so if the property was purchased as an investment with the intention of renting it out (often called a ‘buy-to-let’).

In such cases, owners will have benefited not just from the increase in property value, but also the rental income made from the property during the past 11 years.

Undoubtedly, property investors across the UK will be watching carefully to see how the UK’s latest recession, officially confirmed in August 2020, will impact the property market. Similar to 2008-2009, it could prove to be an unmissable opportunity for those wanting to start or expand their property portfolios.

With that in mind, we have gathered data from the HM Land Registry to look at the areas of the UK which saw the largest growth in average property prices between the first quarter of 2009, when prices were at their lowest, and the first quarter of 2020.

We’ve combined this with data on average rental yields too, so we can identify areas offering the ideal balance between capital growth and rental profitability.

The results provide an interesting look back at the UK property market over the past 10 years, but more importantly, they may help property investors to identify locations to consider for the future.

As such, this research answers two key questions:

  1. Where would an investor have been best off buying during the last recession?
  2. How can we apply the findings to future property investment decisions?

Data

The HM Land Registry maintains a database of the price paid in property transactions across England and Wales.

We exported the data for every property transaction, grouped by postcode districts (e.g. SW1), during Q1 of 2009 and Q1 of 2020.

We then calculated the percentage change in each postcode’s average price paid, showing us where prices have increased the most around the country.

Separately, we collected average rental yields for each postcode in 2020 from PropertyData, an excellent source of residential property market data in the UK.
By combining the two data sources, we were able to analyse:

  • Which postcodes saw the largest capital growth, i.e. property value?
  • Which postcodes, with a minimum gross rental yield of 5% in 2020, saw the largest capital growth?

Whilst the former is a strong, simple analysis of the property market, the latter may be more useful for property investors.

Gross yield is a measure of how much income a property generates each year from rent as a percentage of its value. We chose a benchmark figure of 5%, as this is typically high enough for an investor to achieve a yearly profit, whereas anything lower than 5% could mean the costs of running the property (mortgage, maintenance, etc) exceed total rental income.

Furthermore, it has been well documented that the London property market has performed well and above the level of the rest of the country since 2009. Our findings are consistent with this.

We decided to account for the “London-effect” by duplicating our data: one version included postcodes inside the City of London (those beginning with: N, E, EC, SE, SW, W, WC, NW), and another version excluded those same postcodes.

This left us with four tables in total:

  1. Postcodes, including the City of London, ranked by capital growth
  2. Postcodes, excluding the City of London, ranked by capital growth
  3. Postcodes, including the City of London and with a minimum rental yield of 5%, ranked by capital growth
  4. Postcodes, excluding the City of London and with a minimum rental yield of 5%, ranked by capital growth

We chose to omit Table 4 from this report as only a single City of London postcode made it into Table 3, so the results for Tables 3 and 4 were practically the exact same.

Results

Table 1: Postcodes, including the City of London, ranked by capital growth

The top 20 postcodes ranked purely by capital growth between 2009 and 2020 are as follows:

A table showing postcodes, including the City of London, ranked by capital growth since 2009

Table 2: Postcodes, excluding the City of London, ranked by capital growth

The top 20 postcodes, excluding the City of London, ranked by capital growth between 2009 and 2020 are as follows:

A table showing postcodes, excluding the City of London, ranked by capital growth since 2009

Table 3: Postcodes, with a minimum gross rental yield of 5%, ranked by capital growth

Ranked by capital growth, the top 20 postcodes with a minimum gross rental yield of 5% are:

A table showing postcodes, with a minimum gross rental yield of 5%, ranked by capital growth since 2009

Analysis

Where would an investor have been best off buying during the last recession?

From reviewing the data above, the absolute best place a property investor could have bought during the last recession was in London – in particular, the W11 postcode of Notting Hill in the Borough of Kensington & Chelsea.

On average, had an investor bought in W11 at the start of 2009 and then sold at the start of 2020, they would have walked away with close to £1.5m in profit.

In terms of raw cash, there are only two other postcodes in the entire dataset that saw a similar increase in average sales price: SW 3 and SW7. Both are also in Kensington & Chelsea, highlighting the famous borough’s eye-watering property values.

In fact, through the lens of capital growth, the best places in the country where an investor could have bought during 2009 were mostly in the City of London – postcodes from the City make up 75% of the top 20 biggest increases in average price (Table 1).

However, not all property investors have the funds to purchase in such high-value locations. Instead, the majority of investors are looking for deals which represent great value for money.

In order to identify where an investor would have got better value for money we can look at two things:

  • Capital growth outside of London
  • Gross rental yield

Table 2 shows us where an investor would have been best buying to benefit from growth in property value after the last recession, excluding London.

The results are heavily skewed towards the South East of England, with 90% of the top 20 postcodes in Table 2 within a commutable distance of the capital. The ripple effect of London’s property market is on full-display here, and this is something we’ll pick up on more in the next section.

Meanwhile, if we consider rental yield as a valuable factor – which it is – then the results become much more interesting. With a minimum gross rental yield of 5% applied in Table 3, the top 20 locations a property investor could have bought in suddenly spread much further around the country.

The list is topped, perhaps somewhat surprisingly, by MK9 – covering the very centre of Milton Keynes. After this, we see a mix of areas within close proximity of London (SE28, RM9, RM10, etc) and areas in more Northern parts of the country that have witnessed huge redevelopment projects over the past 10 years (Coventry, Leeds, Leicester, Liverpool, and Manchester).

What can we learn from the results?

History has taught us that a recession leads to a drop in property values – turning a sellers market into a buyers market. In the coming months, investors may have the opportunity to grab a property below market value. So what do the results of this report tell us about where they should look?

Don’t rule out high-value locations

Given London’s domination of Table 1, a key takeaway from this data is that the value potential of “premium” locations with very-high average property prices was huge – far outpacing the average increase in property values during the last 11 years.

Investors may want to reconsider their stance on comparable situations in major cities like Manchester or Birmingham, where many believe the city’s most premium locations have little capital growth potential left. Our results suggest the perception that prices have already peaked in such locations may not necessarily be the case.

Especially when we consider the expected growth of the Northern economy over the next 20 years. With HS2 set to better connect major Northern cities with the capital, and a slew of leading companies setting up bases in the North (HSBC, BBC, ITV, Deutsche Bank, Amazon, to name but a few so far), then it is not unreasonable to suggest we could see London-esque growth in other locations around the UK.

In short, the results highlight the return-on-investment potential of even the most expensive locations over the long-term – something an investor with ample funds may want to keep in mind.

Regeneration is key

Table 1’s results aren’t just all about the strength of the fancy West London postcodes.

Looking at the performance of the East London postcodes is equally as insightful. Many areas covered by the E and SE postcodes have been regenerated in recent years, with projects driven by a demand from young professionals for accommodation close to the capital’s centre. The result is that areas like Camberwell, Clapton, New Cross, Sydenham, Walthamstow, and Walworth – all of which make it into the top 20 – have seen huge increases from what were previously quite reasonable average prices for London between 2009 and 2020.

This is a finding we also see reflected by data from Table 3. Previously dilapidated city-centre areas, which have undergone major rejuvenation and restoration projects, have benefitted immensely from such work in the past 10 years.

Coventry, Leeds, Leicester and Liverpool are all examples, as shown by the data in Table 3, but perhaps the biggest standout is Manchester.

Manchester has several entries in the top 20 of Table 3. Redevelopment schemes have propelled the city forwards in the last 20 years. Ancoats (M4) is almost unrecognisable from the start of the last recession, with the area now filled with modern residential apartment blocks and scores of highly-rated cafes, bars and restaurants (in fact, the city’s only Michelin-star restaurant is based in Ancoats).

Meanwhile, the BBC’s move from London to Salford Quays (M50) was a catalyst for new jobs, infrastructure, businesses and investment in the area, now known as MediaCity. It’s worth keeping in mind that Liverpool Waters, a £5.5bn development project in Liverpool’s L3 postcode, is being built by the same people behind MediaCity.

The takeaway here is that investors should be playing close attention to undervalued, central areas in cities prime for regeneration. Right now, this means looking northwards.

There are plenty of large redevelopment projects with the potential to improve local property values throughout the Northern cities represented in Table 3, for example Birmingham’s Big City Plan, Leeds’ South Bank Project, Liverpool’s Liverpool Waters, and Manchester’s NOMA. In addition, Sheffield (which narrowly missed out on the top 20 in Table 3) is another to consider, with the city unveiling a 10 year economic plan in 2015.

The ripple effect is real

Table 2 is the perfect example of the London property market’s ripple effect. With many individuals, couples and families unable to afford to buy or rent in the capital, the demand for accommodation within close proximity rose sharply following the last recession.

In turn, and exacerbated by the low supply of affordable housing, property values in the South East have seen major increases in the past 10 years – leading postcodes in the South East to dominate the results of Table 2.

In 2020, investors can benefit by anticipating a ripple effect around other major UK cities. Areas witnessing large economic growth in the UK, such as Leeds, Liverpool, Manchester and Sheffield, will be prime candidates, so investors lacking the budget for a city-centre property could instead look to benefit from high-potential, low-cost opportunities on the outskirts of those cities.

Plus, we may now see a higher proportion of the workforce not necessarily needing to be in a city centre each day. The coronavirus lockdown has shown many that ‘working from home’ is a realistic option with benefits for both the employer (saving on office rent) and employee (better work-life balance). It remains to be seen how this will impact property demand, but one potential situation is renters and buyers who no longer need to be in the city centre could look for lower-cost options on the outskirts. The increased demand could really propel property values in those areas.

Above all else, look for investment fundamentals

Finding a balance between monthly rental income and capital growth is the key for any investment decision. Focusing solely on current rental yields will leave investors blind to the progress of a location as a whole in the past 5-10 years, whereas if we only look at capital growth we’ll miss affordable areas with high profitability.

And whilst finding a balance is difficult, the results in Table 3 prove it is possible.

All of the postcodes in Table 3, bar one (IP26), outstripped the average property price growth for the entire UK between Q1 2009 and Q1 2020 (+49.52%) whilst maintaining a rental yield of 5%+.

In fact, if a property investor in 2009 had been looking for a good balance of capital growth and rental yield, the best place in the UK they could have invested was Milton Keynes City Centre.

Milton Keynes has seen a brilliant rise in property prices since the last recession, thanks largely to a strong, service-based economy; the Centre for Cities scores it 4th in the UK for GDP per worker, whilst also ranking it 4th for business startups per 10,000 population.

Furthermore, Milton Keynes is within commutable distance of both Birmingham and London via the M1 Motorway or train – making it a great location for anyone wanting easy access to the UK’s two biggest cities.

And finally, the city has a campus for the University of Bedfordshire, where just under 14,000 students attend. The presence of students can aid local economic performance, whilst supplying a consistent flow of potential tenants for property investors.

In short, Milton Keynes has a number of the fundamentals a property investor should be on the lookout for:

  • Business investment
  • Employment opportunities
  • Accessibility and transport infrastructure
  • Flow of tenants

These fundamentals are key considerations in any property investment decision, and especially so when the economy is under strain – such as during a recession.

Summary

Our research has found that during the peak of the last recession, almost overwhelmingly, London was the best location in the UK where a person could have made a long-term investment in property, given the growth in property values over the following decade.

This is unlikely to come as a surprise to many, given the capital’s status as one of the world’s leading cultural and economic hubs.

However, perhaps the best performing locations within London do offer some food for thought. Before starting this research we anticipated London would dominate, but given the results were ordered by percentage change we thought that London’s eastern suburbs would come out on top, where gentrification and regeneration have led to huge increases in property values.

Many of the city’s E and SE postcodes do appear in the top 20, but the postcode in 1st was W11, Notting Hill – a reminder that luxury property in high-value areas is a very safe choice for those who have the money and are happy to wait for the market’s growth.

The research also identified other leading postcodes where investors would have made a good return had they bought in 2009. These primarily consisted of locations within a commutable distance of London, but we saw a strong representation of Northern cities after applying a 5% gross rental yield filter.

We don’t know how the recession and ongoing coronavirus restrictions will play out over the short-term, but history shows the market always recovers long-term. Therefore, by pausing to reflect on the past, we can better anticipate the future.

Whilst this research has more than exemplified London’s meteoric rise, there is good evidence we may well see similar growth in the UK’s other major cities: Birmingham and Manchester have been well-noted for their progress over the past few years, and the likes of Leeds, Liverpool and Sheffield are quickly gaining too.

For a property investor, now could be the perfect time to enter those markets. We are already seeing property developers offering excellent deals on new-builds, especially off-plan – where investors are in a position of power thanks to deposit protection and the ability to see how the market plays out.

In a decade from now, it will be interesting to revisit these results and re-run the analysis. In the meantime, we hope investors will use the findings to act smartly and make sure they look back with happiness, and not regret over missing an opportunity.

How much money do I need to invest in property
CategoriesInvestor Advice

How Much Money Do I Need To Invest In Property?

As a property investment company, one of the most common questions we are asked is “How much money do I need to invest in property?”.

Unfortunately, there is no easy answer.

The simple truth is that the amount of money required to invest in property will largely depend on the type of property you want to purchase. For example, some properties can be funded with a mortgage, meaning a lower initial cost, whilst others require a cash payment in full.

In addition, investors will need to consider other one-off upfront costs, such as stamp duty, and any ongoing costs, like mortgage payments or ground rent.

In this article, we’ll explore the costs associated with investing in each type of property.

We do recommend taking the time to read the whole article, but if you are looking for a very quick answer, then we estimate that a figure of at least £30,000 is required to start investing in the UK’s lower-priced properties. Read on to learn more and understand how (and why) this figure can change.

Property Types

The type of property can have a significant impact on the money required to invest. Not only does the type of property impact the purchase price, but it can also change how a purchase can be funded – and therefore how much initial capital is required.

In the industry, we call property types ‘Asset Classes’. The following asset classes are the most common for investors in the UK:

  • Residential accommodation
  • Serviced accommodation
  • Student accommodation

In the following sections, we’ll look at the cost of investing in each asset class.

How much money do I need to invest in residential property?

In recent years, you may have noticed major changes to the skylines of the biggest cities in the UK. Property developers are building new, luxury apartment blocks all the time to satisfy the demand of professionals wanting to live in the city centre.

Property investors purchase properties in these residential blocks with the intention of renting them out, rather than living in the property themselves. This allows the investor to gain an income from rent each month whilst, ideally, the value of the property increases over time.

This type of residential property investment is often called ‘buy-to-let’ – simply, buying a property in order to rent it out. It is the most common form of property investment.

The lounge of a buy-to-let residential property

Upfront costs

The big benefit of the residential property asset class is that buyers can purchase using a mortgage, meaning they can get into property with a much smaller initial investment. Of course, this means taking on a debt and a requirement to meet monthly mortgage payments, but the rental income from your property should cover this (and then some).

For buy-to-let investors, 75% loan-to-value (LTV) mortgages are available. This means an investor will need a cash deposit of at least 25% of the property price.

Furthermore, the investor will need extra money for:

  • Stamp Duty Land Tax (SDLT) – in the UK, typically stamp duty is only payable on properties above £125,000. However, if a purchase means the buyer will own multiple properties, stamp duty may be due regardless of the price. You can calculate your likely SDLT using this tool. Please note that between 8 July 2020 and 31 March 2021 there is a stamp duty “holiday” which reduces SDLT for investors on properties worth less than £500,000.
  • Legal fees – a solicitor is required to do all the legal paperwork of purchasing a property. Costs depend on the property value, but usually fall between £1,000 – £2,000.
  • Buffer money – it’s always a good idea to have a little extra cash spare as a ‘buffer’. This helps cover any costs you may not have anticipated, for example purchasing furniture if the property comes unfurnished.

All in all, the amount of money needed upfront to invest in residential buy-to-let property can vary quite wildly. The table below shows how much an investor might need.

Purchase Price Mortgage Deposit (25%) Stamp Duty Land Tax Legal Fees Buffer Estimated Money Required Upfront
£100,000 £25,000 £3,000 £1,000 £2,000 £31,000
£150,000 £37,500 £5,000 £1,250 £2,000 £45,750
£200,000 £50,000 £7,500 £1,500 £2,000 £61,000
£250,000 £62,500 £10,000 £1,750 £2,000 £76,250
£300,000 £75,000 £14,000 £2,000 £2,000 £93,000

Please keep in mind these are rough estimates. Also keep in mind that until March 31st 2021, investors will pay a flat SDLT rate of 3% on any property up to £500,000, potentially saving thousands (for example, SDLT on a £200,000 property will be £6,000, rather than £7,500).

The table suggests a figure of just over £30,000 is enough to get started. There are certainly good buy-to-let properties in the UK around the £100,000 mark, but it should be noted this is a relatively low-value price in comparison to the average across the UK’s most popular cities (Birmingham, Leeds, London, Liverpool & Manchester). If you’re interested in learning more about average property prices, we recommend using the Land Registry’s House Price Index.

Ongoing costs

The most common ongoing costs of residential property are:

  • Mortgage repayments
  • Service charges
  • Ground rent
  • Management fees (if you want to be hands-off)
  • Maintenance costs

Combined, these could range from a few hundred pounds per month to a few thousand depending on the property, so they are not possible to predict without knowing the exact details. We advise investors to consider all potential ongoing costs and their likely impact on the net monthly rental income.

Section summary:

  • Residential property, such as luxury city-centre apartments, is often purchased by private landlords for buy-to-let purposes
  • These types of purchases can be mostly funded through a mortgage
  • However, the amount of money required upfront is affected by the purchase price, stamp duty, legal fees, and any additional costs like furniture.
  • As an estimate, we calculate that individuals with cash savings of over £30,000 may have the necessary funds to begin investing in residential property – although realistically you may need more than double this amount.
  • Investors should take time and care to understand all the costs involved, including mortgage repayments, plus the likely returns from rent and capital growth

How much money do I need to invest in serviced accommodation?

Serviced Accommodation is a type of property that looks and feels a lot like a residential apartment, but is marketed towards short-term lodgers, like tourists and traveling business professionals.

If managed correctly, they represent an advanced property investment strategy that allows investors to benefit from significantly higher rental yields in comparison to traditional single let models.

The key is finding residential developments that are short-term let approved. If they are, the owner can partner with a management company specialising in short-term let management. They will advertise the property on websites such as Airbnb, Booking.com, and others. Renters will be charged a premium to stay.

Whilst the occupancy rate over a year will be lower, due to the nightly rate being higher, the overall cash flow (and therefore rental yield) will increase.

Such developments are quite hard to come by direct from the developer, but the pricing structure is largely similar to that of traditional residential property as purchases can be financed with mortgages, although it’s important to inform the mortgage provider or find a specialist provider.

In short, the amount of money required upfront to invest in serviced accommodation is the sum of:

  • 25% deposit (usually, not always)
  • Stamp Duty Land Tax
  • Legal Fees
  • Any extras, such as furniture

As these factors mirror residential property, we recommend referring back to the table in the section above for more information.

Section summary:

  • Serviced accommodation is an alternative form of high-quality, short-term letting for tourists, business professionals, and more.
  • Investing in this type of property is practically the same as investing in traditional residential property
  • Purchases can be financed with a mortgage, meaning a lower initial cost upfront but higher ongoing costs compared to other types of properties

How much money do I need to invest in student accommodation?

With student numbers on the rise in University cities across the UK, there is a huge demand for accommodation.

The UK’s stock of traditional student accommodation provided by Universities to students, named ‘Halls of Residence’ (or ‘Halls’ for short), simply does not have the capacity to fulfill demand. Furthermore, many students are after high-end, modern, and well-located accommodation – a far cry from the run-down, damp squibs you may associate with student housing.

In short, this means many students will require alternative accommodation provided by new developments from the private sector.

Investors can purchase properties in these developments with the intention of renting it out to students. Student property investment is quickly becoming one of the most popular options for buyers.

Student accommodation

Upfront costs

Usually, student properties cannot be purchased using a mortgage, but they do generally come at a lower price than residential properties. Often, they’re below the £125,000 threshold for Stamp Duty Land Tax. You will still need to pay legal fees, however.

So, to invest in student property you will require 100% of the purchase price in cash upfront, plus money for legal fees (which is always around £1,000 on student accommodation) and a little extra to act as a buffer. The table below shows some estimates based on typical student property values.

Purchase Price Stamp Duty Land Tax Legal Fees Buffer Estimated Money Required Upfront
£60,000 £0 £1,000 £2,000 £62,500
£80,000 £0 £1,000 £2,000 £82,500
£100,000 £0 £1,000 £2,000 £102,600
£120,000 £0 £1,000 £2,000 £122,700

For reference, the typical value of student properties is usually between £60,000 and £80,000. Most of our active student developments are within this range.

One thing to note on student property is that although mortgages are a no-go, developers will often offer payment plans for investors buying off-plan. Off-plan means before the development is complete, i.e. the accommodation is still being built. Almost all student developments sell out off-plan, meaning investors can snag a property at a lower initial cost using a payment plan. Payment plans usually require a deposit of 25-50% on exchange, so if we use the upper end of this range (50%), we can produce another table to reflect these costs.

Purchase Price Payment Plan Deposit (50%) Stamp Duty Land Tax Legal Fees Buffer Estimated Money Required Upfront
£60,000 £30,000 £0 £1,000 £2,000 £33,000
£80,000 £40,000 £0 £1,000 £2,000 £43,000
£100,000 £50,000 £0 £1,000 £2,000 £53,000
£120,000 £60,000 £0 £1,000 £2,000 £63,000

Finally, whilst student property can have a higher entry price compared to residential property it does offer a higher rental yield; average yields are between 8-10% whereas for a residential property in a city like Manchester the average yield is around 5%.

Ongoing costs

With student property, there is typically a fixed rental assurance period provided by the developers – during which all ongoing costs are covered. These periods can last a number of years, and it is only after this fixed agreement ends that a student property investor will need to consider ongoing costs.

When this time comes, the ongoing costs are similar to residential property, although do not include any mortgage repayments. This includes:

  • Service charges
  • Ground rent
  • Management fees (if you want to be hands-off)
  • Maintenance costs

Section summary:

  • Student property is in high demand and offers exceptionally high rental yields compared to other asset classes
  • We estimate individuals with approximately £60,000 – £80,000 in cash will be able to invest in student property

To conclude

From working through the intricacies of each property type, it’s clear the amount of money a person needs in order to invest in property can change dramatically.

But at the same time, each type of property has its own advantages and disadvantages.

As such, any potential investor will need to weigh up what they want to achieve from property investment alongside their available capital (i.e. how much money they have) before making a decision.

This is something we can help you with. We have years of experience in guiding new and experienced investors through the UK property market. If you’d like a free chat to learn more and ask a few questions, please get in touch.

Post COVID-19 Market Projection
CategoriesInvestor Advice

What Will Happen to the UK Property Market After Covid-19?

Post COVID-19 Property Market Video Presentation

A quick run-through of our forecast for the UK property market presented by one of our Directors, Tobi. Making use of recent industry reports, market data and what’s happened internationally, Tobi gives an insight into the impact and likely future effect of COVID-19 through his property market prediction.

Click Here To Watch

The 18 Year Property Cycle

In the presentation Tobi refers to the 18 Year Property Cycle, you can see the article he was referring to here. Tobi explains how once you grasp this, it will become an essential tool for buying and selling at the right time. As a property investor (and if you’re in property in general) this is one of the most important things you should learn.

So how do you profit from the property cycle?

  • Do not panic. Being knowledgeable and recognising what is happening in the market will help.
  • Don’t put yourself into a position where you would be forced to sell at the wrong time e.g. over-leveraging.
  • Don’t buy and overpay for property at the peak of the ‘explosive’ phase.
  • If you pick the right points of the cycle, you can offload properties when everyone is buying and cash in.
  • Cashing in can generate a healthy ‘war chest’ of money ready for when the next crash happens. Meaning you will be ready to pick up great deals. “Be fearful when others are greedy and greedy when others are fearful” – Warren Buffett.

So watch the presentation and review the article on the property cycle and you should be better armed to make investment decisions.

If you found this property market prediction helpful and you’re looking to capitalise on the current property investment environment and secure exclusive incentives, then please get in touch using the details below to discuss your objectives and our opportunities. We charge no fees to investors.

Email: [email protected]

Tel: +44(0)203 627 3987

CategoriesInvestor Advice

Off-Plan Property Investment in 2020

Investing in off-plan property is a strategy that is often a point of consideration for investors during a ‘normal’ investment environment and even more so during COVID-19. So today, we wanted to explain what off-plan property investment is, if you should rule it out and if not, how it can be advantageous to those exploring investing in the UK property market throughout 2020 and beyond.

Firstly, buying off-plan involves purchasing a property during the construction process, this can be from a couple of months to completion or up to 2 years in some cases. The key benefits include purchasing at a discounted price, developers need to incentivise investors to purchase during the construction period and this mostly comes from a reduced rate.

On top of this it gives investors the chance to buy direct from a developer at the base pricing, rather than from another investor on the secondary market with a mark-up on the pricing. Our purpose in this article is not to go through all the advantages but more so to address how it can be beneficial in the current market. If you want to discuss the pros and cons and if it could potentially suit your investment objectives, then do reach out to the team.

Is off-plan investment for me?

 

Before we dive into the potential further benefits of an off-plan purchase, it’s clear that this type of purchase is not for everyone and the points below will help you decide if it might work for you.

Mortgage Ability

Typically, when purchasing an off-plan property with a mortgage you can obtain a formal offer from a financial provider approximately 3 months out from completion, prior to this you will obtain an offer in principle based on your circumstances and the property. If you do obtain an offer it will likely be for a maximum of 6 months. With this in mind, you do not want to commit to a purchase without being sure you can get a mortgage closer to completion, if you typically have a wide range of lenders open to you this shouldn’t be an issue but if you struggle to get a mortgage on a property on the secondary market it’s best to ensure you’ve discussed at length with an experienced mortgage broker/advisor.

Specific Completion Date

If you’re heavily reliant on the income starting to accrue from the projected completion date and you will be in financial difficulty if there are any delays, then put directly, you shouldn’t be investing in any property let alone off-plan projects. Whilst an investment company can relay projected completion timeframes and updates from developers, in some cases progression is simply beyond control, COVID-19 or extreme weather being prime examples. So just consider that when buying off-plan there is always a slim chance of a delay, all be it mitigated by going with an experienced developer and construction company, in our cases we typically add a few months onto the projected completion date to be on the safe side.

You are a worrier!

This is a big factor that some investment firms overlook, you may be financially and practically well suited to off-plan property investment but if your general thought process includes worrying and affects your day to day quality of life, then of course you shouldn’t invest in off-plan property to save 10-15%. There is no point investing and then worrying for the next 6, 9 or 12 months. So in general, if you are very risk-averse then we suggest sticking to an investment without construction risk, no matter how good it looks on paper.

Why off-plan now?

 

Ok, so you’ve decided that you may be open to considering an off-plan project, the next question is why would you, other that the pricing, we’ve outlined a few additional points which are evident more so in the current market conditions.

Delayed Completion

If you secure an off-plan property now, this could be a real benefit, especially if the completion is for the latter part of next year or even 2022 because it gives a chance for the market to settle and correct itself, maybe even have a surge in house price growth, meaning you sit back and miss the storm while still securing an attractive asset at a discounted rate. The property market is currently at a stand-still due to COVID-19, if the market does take a slight dip then we do not foresee this being for too long. Knight Frank has predicted a -3% decline on average across the UK for 2020 but then a +5% increase in 2021 which follows our prediction of a short-lived blip.

Potential to Flip?

When purchasing off-plan, the right property can present the opportunity to flip. What do we mean by this? When you buy a property off-plan, you will most likely pay a discounted price compared to what it would be worth if the property was built and complete. So, let’s say you secure a property now for £200,000 and in 24 months’ time, before completion, it is re-valued at £250,000. If you then sell it, you will have made a £50,000 gross profit from just putting down your initial deposit e.g. less any costs. This is an extreme example and that would be a phenomenal return, but it does demonstrate how you can profit from a low cash outlay and limited risk exposure of the deposit but still benefit from the capital growth on the entire property value.

This could be a great opportunity if we have a positive surge in property prices following the Coronavirus blip. Now while this is potentially a lucrative strategy, we do not advise this to be your only exit strategy as it is market dependent and comes with risk. You should always factor in the option that you will have to hold the property and rent it out so make sure those numbers work for you, and of course, choosing a genuinely discounted project is crucial, so be sure to do your research.

Miss the Voids and Capitalise on Tenant Demand

Due to delayed completion, you miss the current period of uncertainty and issues such as tenants not being able to pay rent (the Government have currently allowed 3 months with no eviction proceedings) or a tenant moving out and not being able to re-let the property due to no viewings taking place. When the development completes in 12-24 months’ time, the uncertainty will have gone and the rental market should be an even more buoyant one due to more people being forced to rent. More demand can lead to rental price increases which will be more prominent in city-centre locations.

Beat the Bank

The UK interest rate is currently at an all-time low of 0.1% and we do not anticipate that going upwards much anytime soon. This means, leaving money in the bank is not wise and if you take inflation into account, you could be losing money with it sitting in the bank earning minimal interest. Whereas, with some of our off-plan opportunities, the developers are actually paying interest on your deposits, for example, a Liverpool development is paying 3%. So, during the period that your investment is being built, your capital is earning interest, which is rolled up and deducted from the purchase price.

Summary

 

So hopefully, the above has given you a bit of an insight as to if off-plan property investment is for you, or at least a starting point. There are countless articles to be found online which will go into further detail and we suggest you have a good read into it.

Construction from some of the substantial public developers has stopped in the UK currently but a lot of sites are ticking over at a slower rate, so just bear this in mind for completion dates but we expect things to return to normal (within reason) shortly. This may also be a good time to lean on developers to negotiate an incentive as (with all businesses) most will be keen to keep on moving with sales, it is not guaranteed they will say yes, but worth asking the question.

If you want to discuss it with an experienced Investment Consultant then feel free to reach out to us on +44(0)203 627 3987 or via [email protected] and we can run through your plans, work out if it’s best suited for you and look at live projects across key UK cities.

CategoriesInvestor Advice

Top 6 Online Resources For UK Property Investors

As a property investment company dealing with plenty of new and experienced investors, we are well aware that research, due diligence and general knowledge surrounding an investment class or any one particular property is essential.

However, also having a wider understanding of property, in general, is vital, enabling you to make informed decisions. Whilst us and many other investment brokers try and get across the benefits of investing in a softer market, we are also fully aware some investors simply want to remain liquid and conduct research, so when their confidence does return they are fully prepared and able to move forward.

Today, whilst many of us are stuck at home, we wanted to outline our top 6 online resources, in no particular order, which will facilitate further education and understanding of the UK property market as a whole. We have no affiliation to these companies or individuals listed below but we do know they provide fantastic content, so read on and build that knowledge!

Top 6 Online Resources For UK Property Investors

1. Home.co.uk Whilst the appearance of this website is quite dated, it’s a fantastic resource to view data/performance of any specific postcode in the UK. If you select, the ‘Prices & Rents’ tab and then type in a postcode, for example, M5, it will bring up further options to narrow down the data. Then go to ‘Selling Price Reports for M5’ rather than Asking Price, you can then select the option to view the performance over the last year. It will then bring up 3 graphs and you can change the timeframe at the bottom (the longer the better for more accurate info), then view the best performing property types, sales volumes etc – a great snapshot of any particular location.
 
Whilst these guys are effectively our competitors (although we charge no fees to investors), for years now they have been delivering amazing educational property content and value via their podcast, so we wanted to give them a shout-out.If you click the link above you will be taken through to their podcast list, it’s worth going through the archives as most of the information is still applicable, they’ve also got some interesting insights on the current market conditions.
 
This one will mean you have to fork out a bit of money but it’s well worth the small investment. As an investor, in our opinion, it really helps to have an understanding of the property development process as a whole, how sites are financed, acquired, the professionals involved and ultimately how a site is built out. If you’re interested in off-plan investment or loan note/property bonds it goes a long way to explaining the security and general process. For those advanced developers it may come across as basic but for most property investors it’s a really useful introduction to the property development world.
 
4. Hometrack As a commercial service, Hometrack provides market intelligence to companies like ours enabling detailed market analysis. Starting in 1999 and now owned by Zoopla Group, they also produce a City Price Index Report which tracks house pricing trends, this a great way for investors to keep an eye on the best performing cities in the UK in terms of capital growth. You can see the latest report here, showing recent data and the impact of COVID-19.
 
5. PropertyTribes.com If you wanted something a bit more interactive, this forum is a good place to start. They describe themselves as The #1 Property Forum for Private Landlords. So if you have a burning question, want to get an understanding of what other landlords are going through or just generally fancy browsing a variety of subjects in one place, take a look here. A word of warning though, as per any forum, take responses from other members with a pinch of salt and always do your own checks and due diligence, especially if it relates to a buying decision.
 

6. PropertyData.co.uk Comprehensive research should be at the heart of any property investment decision, and tools like PropertyData are key to that research. The platform can help you identify where to invest, review local market performance, compare areas you’re interested in, and even benchmark rental prices. There is a subscription cost, but for the price (starts from £14 a month) it’s one of the best tools available given the level of detail and range of data available. Plus, there’s a trial period so you can get a feel for the platform before committing. If you’re serious about investing, it’s well worth a go.

Bonus Resource

Many investors also own their own residential property and at one time or another could have been considering an effort to add value and renovate parts of the home.
If this is you, the team at GoCompare have designed a property investment calculator for people who are thinking of selling their home or looking to improve it to add value. Investing in renovations to increase the price of your property may well be worthwhile, whether it’s a loft conversion, an extension or simply a lick of paint.
You can view the calculator here.
Hopefully, that’s a good starting point to become more educated on the ever-changing UK property market.
Income Safe
CategoriesInvestor Advice

Is Contractually Guaranteed Income Safe?

We are trying to limit our use of the term COVID-19 as I’m sure everyone gets enough exposure through the mainstream media but in terms of property investment, it’s affecting investors strategy significantly. Fixed returns and options with lower-risk profiles, in general, are becoming the preference for many.

As we touched on in a recent email we have been recommending investors look at opportunities that offer a contractually guaranteed income and, as a result, we’ve been having more discussions than normal around the assurance offered and how secure the structure is. Today we wanted to address what a contractually assured income is, how to ensure it’s safe and hopefully help you decide if it’s suited to your investment objectives.

Fixed Income Structure

It’s first worth clarifying that most of the time when you see a company advertising properties with fixed income, they will be the agent/broker, working with multiple developers to introduce investors to their opportunities. Reputable companies ensure investors only form an agreement with the investment provider directly for the contractual income meaning the developer is specifically liable to ensure the contract is upheld.

You’ve probably seen ourselves and other investment firms market Student Accommodation, Hotels and Care Homes that you can’t find on Rightmove, all offering high fixed income. This income comes under a few names, for example ‘rental assurance’ or ‘contractually guaranteed return’. In essence, it’s all the same. It is a legally binding contractual agreement with the investment provider, i.e. the developer or management company, to pay you this income irrespective of the performance of the asset or market fluctuations.

This legal agreement is through a number of specific documents, Investors purchase a unit in a development through the Sales and Head-Lease agreement, then you lease your unit back to the investment provider through an Under-Lease, ultimately, the investment provider then becomes your tenant, paying you the fixed rent advertised of which should all be verified by a UK-regulated solicitor during the purchase process.

The investor benefits should be clear, it provides fixed income so issues such as occupancy rates, maintenance issues, late rental payments, and deposit issues should not be a concern as you will receive the fixed income either way. This provides buyers with peace of mind knowing every 3 months they will have the rental return paid directly into their nominated account, through a fully managed, hands-off investment.

A couple of points to think about…

It’s crucial to understand that investment decisions should not be made on the yield or rental assurance alone, we tend to have investors that just search for high returns and other investors that say it’s unrealistic – it all depends on their knowledge or experience of the market, 1000’s of properties are sold each year with 8-10% fixed rental returns and many developers have been paying these on time, every time, for years.

However, as responsible investors, and where we assist, is using clear evidence to show that the asset itself is likely to produce at least very close to, if not more than, the contractually fixed return. Investments should not just be purchased on a promise, even though it’s legally binding and you can take legal action if unpaid – we want to see what the property rents for, what the costs are and what the likely net return of the asset is. So, in other words, we are covered legally but also should apply practical common sense.

If the developer is promising 10% but the property is renting for £60 per week on an £80,000 purchase price, we know this is unrealistic as the developer is promising £8,000 per year but the rental income is only £3,120, so the developer is liable for the difference, which in the long term would cause issues. We simply avoid speculative developments and we wouldn’t under any circumstances bring such an investment to the market, our business would diminish rapidly, so you can be assured we do run our in-house due diligence on any project we advertise.

In contrast to the above example, we have care homes which let for £650-£950 per week, thus paying an 8-10% fixed return on a £70,000 investment is viable and sustainable even after operating costs, as the investor obligation is only £7000 per year at most but the asset produces £33,800 per year on the £650 price. So even after costs, there is still a hefty margin of safety.

At the moment, given the virus, councils are renting care home suites for over £900 per week in a desperate attempt to secure additional spaces for vulnerable residents, in an asset class that already sees a near 90% occupancy rate UK wide, now more than ever private providers are required to manage and build care homes, often partnering with investors.

So in short, don’t invest on the promise of a high return, you need to ensure it’s realistic that they can pay this income and also consider, it’s entirely possible the figure will be above the fixed rent in the coming years. Whilst you have the security of a fixed return, there are cases where properties will generate 9% and the developer is only contracted to pay 7% and keeping the difference, of which, of course, they are entitled to seeing as they’ve taken on the calculated risk.

Hopefully, that gives you a basic summary, that’s it from us today, wishing everyone a productive week, even if you’re working from home!

Read More: How You Can Minimise Investment Risk | COVID-19

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Investment Risk
CategoriesInvestor Advice

How You Can Minimise Property Investment Risk During COVID-19

As you can imagine over the past couple of weeks the market has softened and investors we are speaking to on a daily basis want to limit their risk exposure and ensure they are making sustainable investments, which will endure market fluctuations in line with COVID-19 implications.

Some investors will hold tight and wait and see how things go particularly in the tourism markets such as hotel investment or projects which have long-term construction timeframes, which is no doubt wise. However, we are engaging with investors daily and others do not want to wait 3 to 6 months and lose out on thousands of pounds of potential income.

In light of this, below, we’ve outlined some pointers for active investors, who may want to move funds from the stock market into a property investment and how you can ensure you are making a wise acquisition in the current climate, with security as a priority.

1. Avoid Leisure/Tourism Sectors

It may seem obvious to many but with tempting attractive returns, holiday-home and serviced accommodation investment models can be appealing. However, with severe tenant/demand fluctuations we have to be considerate of the viability of the structure given it relies heavily on charging premiums on short-term lets which have likely hit zero for most providers.

2. Income Over Capital Growth

A key decision in any investment is the growth/income model, although a good balance can be achieved most investments lean towards one strategy. City-centre residential new-build apartments in the likes of Manchester, Birmingham and even London (for the long-term) are capital growth-focused investments, e.g. the yield will be lower than alternative options but the property value will likely increase more quickly. The trouble is that you are relying on property price increases and although values typically double every 10 years in the UK, you are likely to see a stagnant market in the next year or two. Sensible income-focused investments will pay you no matter the market conditions.

3. Legally Binding Agreements

No matter the asset class, if it be traditional residential property, care homes, purpose-built student accommodation or property bonds, where possible, we want to be sure a third-party has underwritten the return and there is a robust agreement in place. There are investments on the market right now that provide high projected returns but now, in our opinion, is a good time to focus on contractually assured income rather than projected or possible returns.

4. Your Exit Strategy

Arguably, having a clear route as to how your original capital can be returned is one of the most important aspects of any investment. Yes, there are resale markets and plenty of companies out there who can assist in selling on the secondary market for liquid assets but having a buy-back agreement from a third-party, contractually assured, provides peace of mind for the duration of the investment term.

5. Risk & Reward

It is tempting to go for the highest yield you can find, we can tell you now sophisticated investors, family offices and institutional-grade funds, such as pension and insurance entities, do not scan the market for a 12% net rental income that we may see be achieved in a freehold HMO property for example. We want to look at assets that are underpinned by strong investment fundamentals rather than just the yield alone, these fundamentals vary from investment to investment.

COVID-19 Investment Environment

As a company, we have adjusted our marketing efforts to focus on low-risk opportunities of which provide immediate income, see sustainable demand and will not be affected by people self-isolating, an example of which can be seen here, providing 8-10%. Our key markets are the UK, the Middle East and the Far East, all of which have been impacted to a different degree, your location has minimal influence over your investment options.

It is a fantastic time to negotiate with developers and property management companies, so if you’re interested in one of our investments, then get in touch and we can negotiate on your behalf, let’s secure a low-risk asset that pays income and leaves no guessing or stressing about market performance. If done sensibly, now is the time. “Be fearful when others are greedy and greedy when others are fearful” – Warren Buffet.

Contact the team today on +44(0)203 627 3987 or on [email protected]

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Track Capital 2020
CategoriesInvestor Advice

Property Market Projections for 2020

As we come to the end of the year the demand for property and investment advice remains substantial, it’s been a great 12 months for us and we are looking forward to growing even further in 2020.
 
The UK remains a global magnet for savvy buyers and widely considered a tier-one investment location. I’m sure many of you are thinking about the market outlook for 2020 and wondering what’s expected, we wanted to give a quick insight and provide our thoughts on what we are likely to see over the coming year.
– Section 24 – many would have heard of the tax changes for residential landlords introduced recently in relation to mortgage tax relief. The changes were phased in and the full impact will hit next year as the introduction of the rates conclude. We do envisage some landlords leaving the market or looking at alternative asset classes, which could lead to a further dent in the supply of rental properties in some areas and consequently increased rental prices. Do note, there are ways to limit your tax exposure and whilst professional advice should be taken, investing via a limited company could be the solution, read more here.
 
– Property Prices – overall we believe we will see a marginal average UK house price increase of around 1-2% as we now have certainty back in the market seeing as the General Election is complete and the Conservatives were appointed back into power with a majority, albeit with the significant trade deal still to be agreed. However, even though the UK figure is conservative, there will be vast regional variants, for example, Liverpool is likely to experience a 4-5% increase due to the attractive yields and high demand along with continual improvement of their already positive fundamentals. Knight Frank recently released their UK Regional Market Forecasts for 2019 – 2024, see the figures below and full info here.
Mortgages – given the recent government changes, the pattern of more investors buying via a limited company and the general market sentiment, it’s likely there will be a spike in investors utilising finance for purchases via limited companies. Due to this demand, it could mean providers/brokers will respond by offering a wider product range of mortgages for limited companies and potentially more attractive rates.
 
– Locations – even since the referendum in 2016, whilst the Southern regions and London, particularly prime and super-prime locations slowed down, Northern cities have been growing significantly. Manchester and Liverpool were the two flagship cities leading the way, we expect this trend to continue. Having said that, we’ve identified three cities below which should also be given strong attention. There are developments in Manchester now which are being sold with comparable rental yields to that in London at 3-4% net, so it is pricing some people out of the market, therefore if you would like the balance of a low entry-level, high yields, strong demand and good capital growth potential, take a look at the below:
  • Leeds (+3.4% Growth Oct 18 – Oct 19 – Hometrack) – Leeds has the fastest-growing population of any UK city outside of Manchester and nearly £7 billion of development in the pipeline, demand is significant for one of the largest economic centres outside of London. The incredible regeneration of the South Bank area that aims to double the size of Leeds City Centre shows that redevelopment is a key driver for Leeds, the city definitely has a massive part to play within the Northern Powerhouse plans.
  • Sheffield (+3.1% Growth Oct 18 – Oct 19 – Hometrack) – Placed at a slightly earlier stage in the property cycle, this means prices remain attractive in comparison with other city centres and thus so do yields. Sheffield’s local authority seems to be targeting demand with incredible amenities, including £480 million spent on regenerating Sheffield’s shopping and entertainment offering. Definitely a city to get into before it moves along the property cycle where prices begin to increase and the yields begin to decrease as we’ve seen in Manchester.

  • Nottingham (+3.4% Growth Oct 18 – Oct 19 – Hometrack) – This is a city that we’ve have had on our radar for a few years now as it has all the indicators to show strong potential, supported by fundamentals – employers, transport, a strong student market etc, It’s infrastructure is incredibly well-developed and offers opportunities in and around the city centre and provides direct access to many key destinations. It still has affordable prices and strong demand from students and working professionals, Nottingham is also benefiting from regeneration, with intu Broadmarsh shopping centre being an example.
– Debt Investment/Loan Notes – whilst we saw interest in the key regional cities, the most attention from our now thousands of investor contacts was in the debt investment market. e.g. loan notes, this was an asset class that received significant attention by both retail/day to day investors and institutional funds, many of the multi-million-pound pension/insurance funds of Europe identified this sector as being one of their top areas of focus over the next few years, read more from City AM here.
 
In summary, whilst the market has been slow in recent years, sophisticated investors have been able to secure property at below market value and with additional incentives from developers, effectively, they’ve purchased on more attractive terms whilst the market was low and will sell when values increase over the coming years. 2020, will no doubt see a flurry of investors in the market, now confidence has returned.
All the best for 2020 and get in touch with us to discuss your property investment plans. We can discuss the most attractive options based on your criteria, we charge no fees for our service and will happily provide unbias advice. Click Book Consultation at the top right of the page to book a quick call with one of the experienced team.
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