News
Prime London lettings market sees demand exceed supply post-election
The prime London lettings market has experienced a complete shift this month from a quiet lull before the election to a mass influx of new applicants registering since polling day. The latest market report from agency W.A. Ellis, part of the JLL Group, indicates that while the mid-term break is normally a quiet period this year the firm has seen a 20% increase in tenancies starting year on year with the seasonal student market in full swing and demand exceeding supply. However, Lucy Morton, director at the firm, pointed out that when trying to secure accommodation for the start of the school year in September, few landlords will agree to their property sitting empty until then so it may be necessary for students to wait until July or August before starting their search, or take their chosen property now in order to secure it. ‘Our market share in super prime continues to rise month by month with huge success in the super prime sector of the London lettings market recently,’ she explained. This included a six bedroom house in Herbert Crescent with a guide price of £8,950 per week and a seven bedroom house in Justice Walk with a guide price of £8,500 per week. ‘This time last year we informed you of Mayor of London Boris Johnson’s launch of the London Rental Standard (LRS). People differ in opinion as to whether this scheme has been a success or not, however, the Mayor’s office has pointed to figures showing 331 lettings agents managing an estimated 121,000 properties have already signed up. We fully support the initiative,’ added Morton. Continue reading
UK’s regional office investment market strengthening
The UK’s regional office investment market experienced a slow start at the beginning of the year but investor appetite strengthened, according to the latest analysis of this market. Indeed, turnover in the investment market reached £1.48 billion in the first quarter of 2015, s almost double the turnover during the same period last year, and 5% higher than the previous quarter and the highest single quarter since the end of 2006. The regional office market report from Knight Frank also shows that Birmingham and Manchester proved to be the most popular destination for investors in the first quarter of 2015 with two major transactions of £131 million and £92 million. The report points out that given the substantial weight of money targeting regional offices, and following further yield compression both Birmingham and Manchester now command a premium over the UK’s other core markets, at 5%. These cities are closely followed by Bristol and Leeds, at 5.25%. At the other end of the spectrum prime office yields in Sheffield moved up 50 bps to 6.75% in the first quarter. This gives a 175 bps spread of prime yields, which is the largest seen in over 10 years since the fourth quarter of 2003. However the report also points out that prime headline rents remain under upward pressure. Two markets saw headline rents increase during the first quarter, with Birmingham rising to £30.50 per square foot and Leeds to £26 per square foot. The firm anticipates further rises in office rents during the remainder of the year and given current named requirements of 4.58 million square feet, which is the highest in five years, it expects to see higher levels of occupational demand in the second quarter back above the five year average. ‘We could potentially be heading towards a perfect storm of improving occupational markets and sustained capital markets, which hopefully will trigger new developments .With the growth of PRS also, this will be provide a major boost to regeneration schemes,’ said Stephen Hodgson, head of regional offices, Knight Frank. Continue reading
Birmingham named as UK buy to let hospot
Birmingham has come top in the best postcodes for buy to let, with landlords in the Midlands benefiting from the UK’s best rental yields, new research shows. The highest rental yield postcodes from the first quarter of this year can now be found in Birmingham, Ipswich, Liverpool and Glasgow, according to the data from property peer to peer lending platform LendInvest Though Birmingham has beaten London, postcodes around north and central London are still delivering the best overall returns on investment, thanks to capital gains delivered by rising house prices. The rental yield is worked out by taking the annual rental income your get from the property and calculating it as a percentage of the property cost. Using around 1,000,000 sales and 500,000 rental listings from Zoopla, LendInvest has taken the average asking rental price per year and divided it by the average asking property purchase price and then broken it down by the first part of a postcode, known as the outcode. Four of the 10 highest rental yielding areas are in Birmingham, with 13.6% in B44, 11.9% in B42, 10.5% in B98 and 9.1% in B23. In Ipswich and Liverpool landlords can get 10.8% in IP4 and 9 per cent in L28 respectively, while Glasgow areas such as G34, G21 and G22 are yielding 11.9%, 10.1% and 9.2% respectively. ‘Many landlords tend to invest near to where they live, but if they look further afield, they could easily increase their yields and capital growth,’ said Jane Morris, managing director of Property Let By Us. ‘The Midlands provides a great investment opportunity as the property is much more affordable than the South East and the yields are high. For example, in Coventry a three bed semi will cost around £125,000 and will provide rental yields of around 6.57%,’ she explained. ‘Many of the landlords that we work with are netting between 6.57% and 9.1% from their properties in Birmingham, Coventry and Nuneaton. My advice to any landlord looking to invest outside there area is carry out thorough research on property prices; rent prices; and yields to ensure they make the right investment,’ she added. Continue reading
