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Prime property in UK university towns could be snapped up by buy let pensioners
People in the UK who are able to take money out of their pension pots from next month can be confident that if they choose to invest in buy to let they are likely to see strong returns, it is claimed. Recent research by IPSOS MORI suggests over 15% of the estimated 200,000 expected to cash in their pension will choose an investment in property. Management and investment company Grant Property Investment, said it has already seen a 28% rise in property sales in the last quarter of 2014 compared to the same quarter the previous year and expects a further rise when the pension changes take effect in April. For those who do enter the market, there is the potential to enjoy the potentially higher returns than the 3% to 4% pensioners could receive when buying an annuity, the firm believes and points out that investors would also own an asset that can substantially grow in value in the future. ‘As a business, we only source prime traditional Georgian and Victorian properties in areas that have high occupancy and can produce a high rental yield. Consequently, on behalf of individual and institutional investors we are very active in 12 UK cities, including Edinburgh, Stirling, Dundee, Glasgow and Aberdeen,’ said As Peter Grant, chief executive officer of Grant Property. Grant acknowledges that recent analysis from the Halifax suggests UK house prices are firming, while various experts expect house price growth of 4% in 2015. In addition to this he believes prime property in places such as Edinburgh will continue to offer a solid return, including for those who seek alternative ways to utilise a pension pot. ‘Our own expectation is that the properties in prime city centre locations, outside London, will increase in value by a further 3% to 5% in 2015 and achieve rental yields of 6% to 8%. This is significantly better returns than in London where some view prices as overheated and yields are as low as 2% to 3% in prime areas,’ Grant said. ‘It’s also our experience of the market that high quality traditional residential property consistently outperforms new build developments from a capital growth and yield perspective,’ he added. The firm recognises that those of pensionable age may be wary of tax implications, investing in a single asset class and variations in future interest rates and therefore it always recommend clients take independent advice before making any decision. ‘As an alternative to an annuity, investing in a prime buy to let property gives you and your offspring an asset and potentially rental income higher than returns from an annuity. Many parents of offspring heading for university may also see the benefit of investing in high quality property that can support their child through education and provide monthly rental if let to fellow students,’ Grant pointed out. ‘We expect the buy to let will remain a standout investment for 2015, especially in hotspots like the university cities of… Continue reading
Buyers pay over 12% more on average for a property on the UK coast
Living by the coast in the UK comes at a price with homes within 100 metres of the sea worth 12.4% more on average than property up to a kilometre away. But there is also substantial variation between locations, according to international real estate adviser, Savills, which has mapped coastal premiums for the first time. The coastal premium is highest in England at 18.7%, compared to 16.6% in Wales and just 1.2% in Scotland, where the coastline is vast and complex. ‘In our survey of people looking to move home last year, we found that the view from a property is the most valued attribute that buyers are looking for and for many, a sea view is as good as it gets. That means living by the sea comes at a cost, with a clear price premium for proximity to the coast,’ said Sophie Chick of Savills research. In England, the highest coastal premiums occur in the north of the country. The North East and Yorkshire and the Humber carry the greatest premiums at 41.3% and 36.1% respectively, although average prices are highest in the South West and South East. There is also considerable variation in the premium at a regional level and this probably reflects the popularity of some coastlines over others. Merseyside holds the highest coastal premium, with properties near the sea selling for an average of £357,000, some 86.5% higher than those inland. Overall Dorset has the most expensive coastline of any county, with an average sale price of £393,000 and a premium of 46.1%, reflecting the high prices in the ultra prime coastal hotspots of Sandbanks and Canford Cliffs. ‘Counties such as Devon often hold a wider coastal premium than our 100 metre cut off, which dilutes the difference paid for proximity to the coast. On the other hand, counties with remote coastal locations such as Grampian in Scotland have lower premiums, as isolated areas drive down average prices,’ explained Chick. Continue reading
Miliband only UK political leader who would pay under mansion tax
With the general election campaign now underway in the UK research has found that Labour leader Ed Miliband lives in the most expensive house of all the main political party leaders. Labour want to introduce a new mansion tax if it wins the election in May and it has defined a mansion as being a property worth over £2 million. Yet it is only Miliband who lives in such a home. According to research by property website Zoopla, Miliband’s North London home is now worth £2.73 million, more than three times the average in the area. Conservative leader David Cameron’s West London home and Liberal Democrat Nick Clegg’s South London homes fall just short of the threshold applicable to the new proposed tax. Cameron’s home in West London is valued at £1.97 million while Clegg’s family home in South West London is valued at £1.89 million. UKIP chief Nigel Farage’s Kent home is currently valued at a more modest £550,000. However, each leader has seen the value of their home grow substantially since the last election, like most home owners across the country. Miliband has seen the value of his home increase by £1 million since the Conservative/Lib Dem coalition came to power, despite his apparent distaste for their economic policies. Cameron’s home has risen by £671,000 in value and Clegg’s by £573,000 during the same period. As things currently stand, Miliband would be the only current party leader required to pay the annual Mansion Tax mooted by the Labour party on properties worth in excess of £2 million, although house price rises could also soon nudge Cameron and Clegg into this territory. ‘Miliband’s home is in a desirable part of London and is now worth a lot more than he paid for it before the last election. If Labour comes to power as his property tax bill is likely to rise by at least £3,000 per year,’ said Lawrence Hall of Zoopla. Continue reading
