property investment in Birmingham, buy-to-let investment Birmingham

Property Investment in Birmingham Smithfield Project is Booming

During the past 10 years, the city centre in Birmingham has transformed into a successful economic hub, second only to London.  For this reason, property investment in Birmingham is booming.

The appeal of city centre life is on the rise not least due to fantastic shopping facilities, excellent international cuisine and a buzzing nightlife.

Areas of affluence are emerging in the Convention and Jewellery Quarters as well as in Digbeth and surrounding areas. There’s no doubt that property prices are increasing rapidly.

£500 million regeneration plan

However, for those interested in property investment in Birmingham it’s still comfortably affordable for investors especially in Digbeth.  The £500 million Birmingham Smithfield regeneration project that has recently been announced spans over 34 acres.

Delivering 1,000 residential units, 100,000 m2 of floor space and 3,000 new employment opportunities, the site is expected to benefit the local economy by £470 Gross Value Added (GVA). It will also increase visitors to the area, currently at 40 million per annum, by millions more.

This 10 year Enterprise Zone initiative plan is creative, innovative and exciting. The development of residential zones, vibrant retail markets, cultural and leisure attractions will create an exclusive destination already deemed to be one of the top 10 global locations by Rough Guides.

The development is located next to the most popular shopping area in the city. Attracting 40 million shoppers annually, it accrues £2 billion in revenue for the local economy with over 50 million travellers using New Street Station.

Integration of the Midland Metro Tram, pedestrian walkways and cycling routes will facilitate easy access to the Curzon Terminal for the proposed HS2 (high speed rail). Improvements for public transport are also planned.

Birmingham’s £500m Smithfield city development plans unveiled

Buy-to-let Investment in Birmingham

As city life becomes more popular, with many people wanting to live permanently near to where the action and all facilities are, Birmingham Smithfield at Digbeth is an ideal investment opportunity.  Buy to-let investment property has always been in demand but never more so than the interest that has been shown this prime location.  Off plan investment for proposed apartments is significantly high.

Huge investment is currently being negotiated with a major Taiwanese conglomerate and with super rich Chinese.  To benefit from this project investors need to be decisive.

Building has begun

If you would like more information about property investment in Birmingham city centre and surrounding areas contact us today. Ere Property has offices in the UK and Hong Kong offering property investment services that are trusted by investors across the globe.

Take a look at details of investment property opportunities in Digbeth, Birmingham: https://ereproperty.com/property/enterprize-zone-birmingham/

The September changes to buy-to-let mortgages for property investors

The latest buy-to-let changes to affect investors will this time be felt by portfolio landlords who are looking to make another investment.

The Bank of England have placed new, tougher requirements on lenders including the interest rates-dependent ‘stress test’ on new mortgage applications. Any lenders who agree to fund an investor will have to look at the total portfolio of four or more mortgaged properties before making a decision about the type of financing for the single property application. This is because the whole portfolio has to be underwritten when applying for a new mortgage.

For multi-property landlords this may be a challenge as the whole portfolio has to be viable and most lenders have adopted the new rules meaning shopping round to find a lender who won’t apply this new criteria may be difficult. The amount of taxable income that you earn, the number of buy-to-let properties you own and whether you are part of a limited buy-to-let can affect the amount of the loan.

You can still be proactive as a portfolio investor even if you are not ready to invest again immediately. Having complete documentation of your buy-to-let properties and mortgages is an important first step and up-to-date proof of tax paid on your buy-to-let properties would be useful.

Surging property prices in Hong Kong encourage investors to look at UK buy-to-let

It’s no surprise to anyone with an eye on the international property market that affordability in Hong Kong has been on a steady decline for several years now as prices continue to rise.

At 2,754 km² the tiny island is home to over 7,400,000 people fighting for space and to accommodate them developers have resorted to building micro-homes. These tiny flats are designed to make intelligent use of limited room, but the diminishing space isn’t preventing prices from continuing to rise, breaking record highs.

The South China Morning Post recently held a “Redefining Hong Kong” debate series, titled: “Can Hong Kong rein in runaway housing prices?”. The debate, which was attended by staff from the ERE office in Wan Chai, discussed the difficulties the government faced in securing land to build new homes and how external factors such as US and Chinese economic conditions continued to affect price rises.
Optimists hope that house prices will start to correct over the next ten years but for expats who have moved to Hong Kong who are looking to make a financial investment in property, the prospect of investing locally is not feasible and they are looking for a more immediate opportunity.

For British expats who have moved to Hong Kong from the UK, ERE Property has been providing access to these opportunities, providing off-market deals and up-to-date regional knowledge of property in the UK. Our clients are working long hours and don’t have the time to act as a landlord. ERE has built up a service to offer these property investors a hands-free service with full lettings and management of their property. We value good service and operate with integrity and efficiency and as a result we have built up a network of investors who refer their friends and colleagues to us.

If you are based in Hong Kong, arrange a meeting with one of our Property Consultants to discuss why property investment in the UK’s regional cities is a good investment choice.

Comparing the Northern Powerhouse heavyweights

The key to Northern Powerhouse success is ensuring the sometimes neglected city regions are able to realise their economic potential. The task isn’t a small one and the Northern Powerhouse government minister is committed to balancing the UK’s economic output. Some positive outcomes of this focused strategy are emerging, as the Northern Powerhouse regions have seen inward investment increase even faster than the UK average. According to EY’s latest UK Attractiveness Survey, the north-west region attracted 90 foreign direct investment (FDI) projects in 2016 – 60 per cent of which were first time investments in the region.

Centre for Cities has compiled data on 63 of the UK’s cities to understand and improve economic performance. So how do the cities of Leeds, Liverpool and Manchester compare when it comes to house prices, employment, GVA and graduate retention, all key factors for buy-to-let investors.

In the report, mean house prices in Manchester are £175,419, whilst in Liverpool they are lower at £131,046. In Leeds the mean house price is the highest at £186,206, although when you take population growth and demand for property into account, it is evident that Manchester is a good choice for investors as the population size in 2015, placed Manchester 3rd out of 63 cities in the UK.

The Centre for Cities research also took into account graduate retention rate, or graduate gain. Graduate retention gives an indication of a city’s ability to retain newly qualified graduates based on job prospects, wages and quality of life. Leeds graduate gain is the 3rd highest of all UK cities, whilst 50% of students who left Liverpool for university subsequently came back to work after graduation.

Please note:

* The cities are ranked in order out of 62 or 63, dependent on the criteria, with places closer to 1 at the top of the list.

* “The Centre for Cities uses data for Primary Urban Areas (PUA) in its analysis. This is a measure of the “built-up” area of a city, rather than individual local authority districts. PUAs are used in our analysis because they provide a consistent measure to compare concentrations of economic activity across the UK. This makes PUAs distinct from city region or combined authority geographies.”

Brexit concerns aren’t affecting the regional UK property market

The UK’s regional housing market is shrugging off concerns found in the wider economy following the Brexit vote. New information from Rightmove suggests that the housing market has been resilient to Brexit worries affecting the wider economy.

Although this is a problem for first-time buyers who are facing strong year-on-year price rises, the news is broadly good for buy-to-let investors, signalling confidence and strength in the market.

In London, the combined effect of higher rates of Stamp Duty and Brexit has pushed investors out of the capital and house price growth, which was at 14 per cent in 2016, is likely to fall to three per cent this year and the outlook shows little promise of returning to any similar level in the foreseeable future.

The results also show that there are more buyers and sellers overall than this time last year. The number of sales agreed were also up by 4.6% in June 2017 compared to the same time last year.

Miles Shipside, Rightmove director and housing market analyst, said: “A year on from the shock referendum result and subsequent dent in activity levels, the fundamentals remain strong.”

And they do. Low unemployment and low interest rates continue to ensure the UK is a good choice for investors.

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Source: The Guardian, UK housing market shrugs off concerns of Brexit slowdown; City AM, Six charts showing what the Brexit vote has done to UK house prices

Yorkshire races ahead of other UK regions for employment growth

Yorkshire is already known as a prime location for business investment and expansion and news has been released that the county saw the quickest rise in employment in the UK in June, according to the latest Lloyds Bank Regional PMI report.

Yorkshire also had the second-fastest expansion in business activity in the UK in the same month, with output rising for the eleventh month running.

Optimism is particularly high in Leeds City Region’s business community and for good reason. The city combines great access to regional and national markets, great quality and excellent value for money office space. The city is growing and property investors are encouraged enough to look outside of the city centre at the areas which have been attracting commuters who have been priced out of the city centre.

The scale and diversity of the Leeds economy is key to its success. It centers on financial, legal and professional business services, a vibrant visitor and leisure economy, plus expertise in healthcare technologies and high value manufacturing.

Leeds City Region is home to the UK headquarters of a number of international businesses such as: Asda Walmart – supermarket chain; Capita – a FTSE 100 listed company concerned with business process outsourcing; CYBG plc – Major UK banking group; GHD – global HQ for hair fashion company; Jet2.com – a low cost airline; and Sky Betting & Gaming – betting and gaming company has headquarters in Leeds city centre.

As the home of these many international businesses, the region manages to keep a fairly good student retention rate after university, but students at Leeds Trinity University, the standout institution, are more likely to stay in the region after graduating, with 78.7% being employed in the Yorkshire and Humber region.

Leeds sits at the heart of a wider city region with an economy worth over £62.5 billion per annum and the city’s economy has grown almost 40% over the last decade. Since 2011, employment has risen by 11,000 and Leeds now has the highest ratio of private to public sector jobs of all major cities outside London. With this growth in the city, property investors are assured of the return on their buy-to-let investments and are now looking just outside of the city centre for apartments which appeal to tenants because of slightly lower rents than the city centre but that can still take advantage of the city’s good public transport network.

Victoria Gate: How a shopping centre transformed Leeds into a world class shopping destination

For savvy property investors, analysing a city’s house price growth is only one factor in making an investment decision. With high house price growth, Leeds has remained an excellent UK investment hotspots, outstripping London since the Brexit vote. The recent development of Victoria Gate, a luxury shopping centre that brought John Lewis to the city, has further proved Leeds’ investment potential.

Leeds’ Victoria Gate is a great platform for the retail brands to expand their portfolios outside London. Here’s why it has been getting investors so excited:

  • The centre has attracted four million visitors since its opening day

  • It was named the world’s Best Shopping Centre at the internationally renowned real estate competition the MIPIM Awards

  • A 255,000 sq ft John Lewis store has opened, representing a £37m investment. Plus it’s one of the biggest John Lewis department stores outside of London

  • Two new rooftop restaurants operated by D&D are poised to open on site shortly including a Japanese restaurant called Issho

  • A New York loft-style bar called East 59th is due to open in the summer

  • A new 50,000 sq ft “super casino” opened early in 2017.

Besides the great economic impact bought by the Victoria Gate, Leeds is also home to the UK headquarters of:

  • Asda Walmart – Supermarket chain

  • Capita – FTSE 100 listed company concerned with business process outsourcing

  • CYBG plc – Major UK banking group

  • First Direct – A subsidiary of HSBC

  • GHD – Global HQ for hair fashion company

  • Jet2.com – Low cost airline

  • Sky plc – Customer care and digital development

  • Sky Betting & Gaming – Betting and gaming company has headquarters in Leeds

  • Yorkshire Television – A subsidiary of ITV plc

Victoria Gate is just one example of how partnership between the public and private sector is at the heart of Leeds’ approach to major regeneration. The effect has been readily seen and felt over the last ten years. Smaller scale initiatives have focused on reinvigorating town and district centres with the aim of realising the city’s ambition to become the best UK city by 2030.

Should I invest in a studio apartment?

Studio apartments are gaining popularity in the UK property market, but is this the right kind of investment for you? Read the infographic below to understand more about studio apartment property investment.

1) Budget & Cost

Lower cost and low/no* stamp duty required
Usually studio flats are of a smaller size and so a lower price than one bedroom and two bedroom apartments.

Suitable for first time buyers / investors who want to expand their investment portfolio
With lower cost and thus lower / no stamp duty, studio apartments are a good investment choice for new investors who want to expand their investment portfolio. Studio apartments appeal to tenants, as the lower cost than a one bedroom provides them with the choice of staying in the city centre without paying as much.

*For the first property that priced below £125,000

2) Location is the key

While location is one of the most important aspects of an income generating property investment, it is even more important in the case of studio apartments investment.

Studio apartments tenants are mostly younger people who value privacy and commuting more than space. A modern studio apartment close to their school/workplace will guarantee a great supply of tenants.

I want my tenants to be young professional… Then you should purchase a development close to a business hub and/or city centre.

I want my tenants to be students… Then you should purchase a development with easy assess to universities/colleges.

3) Rental Growth

With an increasing number of young professionals and international students demanding apartments with a high quality finish, the popularity of studio apartments among tenants are undeniable.

Studio apartments usually result in lower maintenance costs and a higher supply of potential tenants. The rental growth of studio flats in most cases generates a higher yield (around 1% – 1.5%) than their one and two bed counterparts.

4) Capital Gain

Studio apartments are suitable for long term investment. The capital growth of studio apartments in the short term is not as profitable as it is for bigger apartments. Still, the location is the most important factor for a development’s capital growth. Choosing the right location to invest in a studio apartment can let you to enjoy both high rental and capital yields.

5) So…why studio?

  • Lower cost
  • Higher rental yield
  • More popular among tenant

How not to mess up at work – Lessons from the General Election

Don’t let people around you fluff your ego

The UK Prime Minister finished the June 2017 General Election without the majority she expected and lost 12 seats in all. MP’s and Ministers in her party who were previously thought to be secure lost their seats to Labour candidates. A couple of days after the Election joint chiefs of staff succumbed to the blame for strategic and policy failings and lost their jobs. The reason for their dismissal is cited as a refusal to listen to advice, even from experienced colleagues. In your place of work, there may be members of staff you trust, but don’t restrict yourself to their thoughts about new policies or products, as eventually you won’t be able to distinguish if they are telling you the truth or what you want to hear.

Get out from behind your desk and meet people face to face

Build your network by meeting with people face to face (see point above – don’t surround yourself with “yes people”). Meeting clients and colleagues face to face is important for building relationships and better understanding needs. Email and text messages are important for quick connections but you can’t get meaningful results from this type of communication all the time. Even Skype is a better alternative than email. According to some sources, an extra 66 per cent of 18 – 24 year olds were energised to register and vote in this election, compared to 43 per cent in the last General Election. It’s thought that the opposition leader Jeremy Corbyn’s efforts to connect with young people seriously contributed to this. The lesson we can learn? Get out there and meet key clients, build relationships and make sure you understand their needs.

Know your priorities and prioritise 

Here’s a scenario: You have end of year targets that you must meet. You know a big client will deliver, but only if you put the work in. You then decide to focus your attention elsewhere and miss your deadline. Who is at fault? This is a simplistic but pretty accurate way of describing what happened with the Prime Minister’s decision to call a General Election. Brexit will be Theresa May’s legacy – her party have to decide if she should have taken her eye off the ball to call a General Election and see how Brexit negotiations begin before they decide she is the right person to lead the party.

Understand your audience 

Do you know what your customers really want? Market research is an essential part of the process where a new product is launched. Take feedback from customers and incorporate their ideas into your own. The Conservatives launched a policy on social care that alienated a large part of their core group and then did a U-turn and retracted the policy, giving the impression they hadn’t thought much about their core audience at all.

Do your own research 

People are prone to getting excited about new ideas and jumping to assumptions as a result. Our advice would be to not get caught up in the hype. Take time to understand the impact of your ideas across the business in different departments. Review the proposal, do your research, get feedback from relevant people outside of your department and then act on that feedback accordingly. Also, know what you’re talking about when sharing those ideas; Labour MP Dianne Abbot struggled with her figures when asked about the results of a 2016 inquiry into London’s preparedness for a terror attack, proving that if you don’t know the answer, admit it and move on.

Stay away from the jargon

You can have great slogans which will help to buy in support from your colleagues but make sure you can prove what you say or they become nothing more than jargon.

Just say no

If this election has taught us anything, it’s that if someone comes to you with an idea that sounds too good to be true, it probably is.

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Source: Sources: City AM, General Election 2017: How big was the youth vote, and what impact did it have?; The Independent, Diane Abbott struggles with questions on recent London terror report in latest bungled interview

General Election 2017 – Key points for buy-to-let investors

Poll results

 

The gaps are narrowing. It is looking less likely that the Conservative landslide that was predicted when the election was announced, will happen. Not many people will trust the pollsters this time around, after the false Brexit vote and the US presidential election predictions. A better barometer of election victory is thought to be the local bookies and some pollsters are looking at the types of election bets people are putting on. With less than one week until the election, odds are 1/12 for the Conservatives, 13/2 for Labour and outside odds for the other parties range from 500/1 or 1000/1.

 

Housing Crisis

 

The Conservatives have stated they plan to give more money to local authorities who would have the opportunity to get involved with the development of council homes. The most controversial measure from the perspective of landowners would be to reform compulsory purchase powers. This would mean landowners could be asked to give up their land for less than the full value. Andrew Carter at Centre for Cities believes that there are ways of giving landowners fair value through a market system so the process could be controlled to the benefit of all.

Labour’s focus is on the rental market, with the addition of the promise of 100,000 council and housing association homes by the end of the next parliament. Jeremy Corbyn wants to help those in the rental sector by increasing the minimum tenancy length to three years, scrapping the right-to-buy scheme and getting rid of letting fees.

Effect on Brexit

Brexit is going to take place, there is no getting around it; Article 50 has been officially triggered and now it is down to how we negotiate our exit. As would be expected, Brexit has featured in both campaigns, although probably more heavily in the Conservative campaign. Theresa May is determined to have a strong and stable Brexit that draws on Britain’s global outlook and create new trade agreements with other countries. Jeremy Corbyn’s approach is to retain access to the single market and reject the idea that ‘no deal’ is viable in EU negotiations.

 

Supply

Demand on the housing market has long outweighed market supply. A simplistic look at some of the factors which have affected the issue of supply are the financial crisis, which affected construction output and also successive governments have built fewer homes than needed resulting in a ‘housing crisis’. Brexit and the General Election mean that some homeowners are waiting to see what the outcome of this uncertain time is before selling their existing properties. However, don’t neglect factors such as the growth and expansion that will continue, especially in the towns and cities of the North and Midlands irregardless of the outcome of this 2017 election.

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Would you like to talk to someone about the effect of the General Election and Brexit on investment property? Call us in the UK or Hong Kong or fill in the contact form below.