Tag Archives: finance-update
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
Spanish property market recovery fastest in the Balearic Islands
The Spanish Balearic Islands, which reported some of the lowest house price falls in Spain during the six year economic downturn, is now experiencing the fastest and highest rises in the country. The strong property market is being supported by a healthy tourism sector and a multi-national house buying population, according to Alejandra Vanoli, managing director of Mallorca Sotheby’s International Realty. She pointed out that Calvia alone has 19,000 non-Spanish residents from 100 different countries and this year the firm is selling more houses than ever. In Ibiza it is a similar story. According to Glynn Evans, the firm’s managing director in Ibiza the international buyers are attracted by exciting culinary business ventures from multi-Michelin starred chefs, supercar and powerboat championships, 70 metre plus berths for the finest private mega yachts and several new five star hotels. On top of this, at the end of April, the Bank of Spain confidently declared an end to the property crisis. José Luis Malo de Molina, said that ‘the adjustment in the housing sector, in principle, is complete’ and ‘the process of price adjustment, in principle, has already bottomed out’. The mortgage market is also well into recovery. Data from Spain’s National Institute of Statistics show that property loans in the Balearics, for example, were up 36.2% in February 2015 over the previous year, above the national average of 29.2%. Meanwhile, the Spanish rental sector is also improving. Average rents increased by 0.2% in April, compared to the previous month, to €6.98 per square meter per month, according to the data from property portal Fotocasa, and year on year they increased by 1%. ‘In the last few months we have gone from registering widespread declines in home rental prices, to registering increases in every region except one. Rental prices, therefore, are starting to increase in most of the country,’ the Fotocasa report said. But rents are still down 31.1% since the peak of the rental market in May 2007 when it was €10.12 per square meter per month and all regions have seen serious declines since the peaks before the economic downturn. Rental prices have fallen the most in Aragon with a decline of 41.9%, are down 37.8% in Cantabria, down 36.5% in Valencia, down 35.9% in Castilla-La-Mancha, down 34.8% in Murcia, down 30.5% in Rioja, down 30% in Asturias and down 29.5% in Andalucia, since the peak of the market. However, prices increased in April month on month in all regions except in Castilla-La Mancha where they fell by 0.1%. Rental prices increased the most in La Rioja with growth of 4.2%, they increase by 3% in the Balearic Islands, and by 0.9% in Madrid. Continue reading
