Tag Archives: real estate
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
Majority of UK tenants face higher rents at end of tenancy agreement, it is claimed
Almost two thirds, 60%, of UK tenants have seen their rent increase on their current property at the end of each tenancy agreement, new research has found. And many are forced to pay additional fees, averaging over £100, to letting agents to renew their contracts, according to a study by mortgage and loans provider Ocean Finance. Landlords increase rent by an average £84 a month, or £1,008 a year, at the end of each tenancy agreement, the figures show. On top of that, 13% of renters are also hit by charges from letting agents of £117 on average for renewing their tenancies. The study shows that over half of tenants stay in the same house for five years or more, which could see them paying almost £600 in letting agents’ fees to continue renting their home. According to the figures from the Office of National Statistics, prices on private rentals increased by 2.1% in the year to March 2015, driven by the buoyant market in London and the South East. ‘The buy to let market is booming at the moment, driven partly by the London market, although there are strong hotspots across the country,’ said Gareth Shilton, Ocean’s spokesperson. ‘As demand for rented properties continues to outstrip supply, and many people struggle to get on to the housing ladder, landlords are in a strong position to continue to increase rents each time a tenancy agreement ends,’ he pointed out. ‘On top of rental increases, tenants are facing rip-off fees from letting agents, not just to take new tenancy agreements, but also to roll-on an existing tenancy for another six or 12 months,’ he added. Continue reading
Central London prices set for growth of 18% over five years
House prices in central London set to rise 18% in next five years and rents by 19.5% as market moves forward after the UK’s general election, it is claimed. The latest analysis says that unprecedented uncertainty surrounding last month's election saw a stifling of house price growth across London, with the rate of house price growth at less than 4%, compared to the 9.6% increase seen in 2014. The emergence of the capital as a political scapegoat, with potential rent caps and a mansion tax being discussed, contributed to the sense that London households would bear the brunt of any tax changes, it points out. However both issues have now subsided, following the surprise majority win by the Conservatives, according to international real estate consultants Cluttons. Despite this, the damage done to domestic and international buyers' confidence was reflected in a sharp tailing off in demand during the first quarter of 2015, with both vendors withdrawing properties and buyers adopting a wait and see approach. ‘There is no doubt that the results of the general election have helped to re-inject confidence into the market that had receded early on this year,’ said Cluttons' international research and business development manager, Faisal Durrani. ‘The outlook for the London housing market has stabilised, while buyers and vendors have returned to the market following a conspicuous absence of activity. Our outlook for the rest of the year is for increased stability in the market and a return to a more normal state of activity,’ he added. The report also says that despite the Mortgage Market Review (MMR) contributing to a 16% year on year dip in home purchase loans in greater London to March 2015, affordability appears to be improving slightly, with the average loan size dipping to 3.86 times annual income in the first quarter of 2015. Risks still remain on the international front however. ‘International risks such as the threat of another Scottish referendum, a disorderly Greek exit from the European Union and a potential Brexit mean that the market has moved from a situation of having several unknown unknowns to being left with a handful of known unknowns. A Brexit remains the biggest threat as the impact on the economy is the biggest unknown at this stage,’ Durrani explained. Cluttons forecasts modest central London house price growth in 2015 of between 2% and 3%, before accelerating to nearly 5% in 2016 and stabilising at around 4% per annum between 2017 and 2019. Cluttons expect this level of growth to deliver cumulative capital value appreciation of almost 18% over the next five years. The prospects for the prime central London rental market are stable, with average growth of 4% per annum forecast for the next five years. Cluttons explains that affordability and the desire to purchase remain key challenges for the capital's rental market and while supply levels are rising, the strong rate of job creation in London will help in absorption rates. ‘The more subdued growth forecast… Continue reading
