Posts

studentliving

University Cities Worth Investing In

University Cities Worth Investing In

Universities are a major reason that the market for buy-to-let investment in Leeds, Liverpool, Leicester and Bradford make  ‘Northern Powerhouse’ cities looks so attractive. Cities such as Manchester are now seeing post graduate retention rates in the region of 50% which in turn generates around 17,000 students every year being added to the population and seeking quality apartments. This drives up both property prices and rental demand. Good quality apartments offer students secure, comfortable and conveniently-located lodgings. Among the interested investors will be parents looking to house their children for the duration of their studies, and secure themselves a long-term source of income after graduation. 

Let’s take a look at four university cities offering fantastic buy-to-let investment opportunities. 

Leicester 

What once was a hub for textile and shoe manufacturers has been transformed into St. George’s Cultural Quarter. There, Victorian buildings provide a home for the city’s artists and creatives. That’s where our Agin Court two-bed apartments are based. They each offer more than a thousand square feet of living space, with those near the top offering terraces and balconies, to boot. Each is just a short walk from both Leicester University and DeMontfort University.  

Leeds 

Leeds is home to two universities, both of which rank consistently well on league tables and student surveys. Leeds University was named University of the Year 2017 in the Time’s Good University Guide. The city’s regenerated South Bank is attractive to up-and-coming professionals. The Ellerby Road apartment complex boast two-bed apartments, each of which provides 732sq ft of living space, and will be ready to receive tenants soon. The city offers an excellent transport infrastructure, meaning that residents will be able to reach any part of campus via bus. 

Liverpool 

A £4 million investment programme has helped transform Liverpool into one of the UK’s top business destinations. Old Hall Street is a seven-storey property whose central location makes it perfect for urban professionals. Just a seven-minute walk from Liverpool Lime Street Station, it’s convenient for frequent travellers – Manchester is just a forty-five minute train journey away, while London is reachable in around two hours. The city offers a high concentration of universities, with the red-brick University of Liverpool being perhaps the most prestigious. Old Hall Street is within walking distance of a host of bars, clubs, restaurants and shops – including the world-famous Cavern Club where the Beatles made their name. 

Bradford 

Bradford’s student population is among the country’s youngest, which makes the city’s future appear especially bright. The city centre has witnessed explosive growth in recent years, with hundreds of shops, bars and restaurants opening. Our York House apartments are located near Bradford College and the University of Bradford, making them an ideal residence for new students. They’re also easily reachable via the nearby Canal Road. Bradford city council have created ‘growth zone’ incentives to encourage the development of the city centre – which can only be a good thing for the value of nearby properties. 

Why are University Cities worth Investing In? 

Having completing their studies, many students will have formed an attachment to the cities in which they’ve been living for three years or more. They may have formed lasting friendships and romantic attachments, and so be unwilling to move away. Thus, those that don’t choose to go onto a postgraduate degree (or move back in with their parents) will often move into full-time employment in their university city. 

The rate of graduate retention varies enormously from region to region. This rate depends on many factors, but the availability of high-quality accommodation is inarguably key. While many landlords might hesitate to deal with students, highly-skilled young graduates they become will drive local growth, which makes investment in university cities more palatable. 

It won’t surprise many readers to learn that, according to the latest HESA Destinations of Leavers survey, the biggest winner is London – but some of the so-called ‘Northern Powerhouse’ cities aren’t far behind, with a retention rate hovering at around two thirds. As such, such cities contain some of the best UK property investments, and are well worth investigating! 

 

studentliving

Property investment in North and Midlands

Market Update for UK Property Investors

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/

SOYO increases the investment potential around Victoria Gate, Leeds

Leeds’ newest district SOYO, or SOuth of YOrk road, will be the city’s new cultural district. The attention of property investors has been drawn to this area of Leeds city centre, as the area has undergone vast redevelopment with the construction of Leeds’ newest luxury shopping centre Victoria Gate, the home of John Lewis. The district will be built adjacent to West Yorkshire Playhouse, Leeds College of Music, BBC studios, Northern Ballet Head Quarters and is set to become a key development in the regeneration of Leeds City Centre.

Leeds’ New Cultural Quarter

The SOYO proposal includes 106,000sq ft of offices, 35,000sq ft leisure, in excess of 700 residential units, a multi-storey car park, 7,500sq ft retail facilities, a medical centre and a series of vibrant public squares. This type of redevelopment is contributing to long-term economic growth in this area of the city centre and is essential for property investors to be aware of when considering capital growth potential of the property.

West Yorkshire Playhouse

The West Yorkshire Playhouse, which opened in 1990 is set to have a £14 million facelift. Redevelopment will include a brand-new entrance, studio and improvements to the buildings interiors for the thousands of visitors they host every year to enjoy. The Playhouse is a big pull for tourists for the city and was shortlisted for a top tourism award in the Arts & Culture category as part of the prestigious Welcome To Yorkshire White Rose Awards.

Transport

The city’s transport system is well positioned for access in and out of the SOYO district. Tenants will have a 6-minute walk to the bus station and 10-minute walk to the train station. Generally, Leeds is one of the most well-connected cities in the UK with exceptional rail, air and road links. London is just two hours away by train and one hour by air. Major roadways including the A1, M1 and M62 are in the vicinity, bringing drivers right into the city centre.

Infrastructure Investment

Within the immediate vicinity of the development is the completed Victoria Gate, a new £165 million luxury shopping centre which is also home to the largest John Lewis store outside of London. The true value of Victoria Gate has been revealed as it is expected to attract over £82.5m of inward investment to Yorkshire during its first 10 years. It’s no surprise then that the economy of Leeds ‘grew faster’ than London since Northern Powerhouse was launched back in 2014.

Investment into the Education Sector

A key growth area for development in Leeds is in the education sector. The city is already served by three universities and has the fourth biggest population of students in the UK. The crane survey recorded four new starts in 2017 adding over half a million sq. ft into the development pipeline. This included Leeds City College’s Quarry Hill campus and developments at both the University of Leeds and Leeds College of Building.

From Students to Young Professionals

Rental potential and longer-term capital growth is strong as more graduates are staying in the city to work in its growing financial, technology, professional services sectors. Three major universities support a thriving student population who are encouraged to stay in the region by more affordable house prices than in the South East ensuring high rental demand and healthy yields for landlords. House price growth in Leeds was at the highest in the UK, with average growth of 5.7% in 2017.

Financial Quarter

Leeds is the second largest financial city after London and has an economy worth £64.6 billion. There are over 30 national and international banks in the city, with First Direct and Yorkshire Bank basing their headquarters there. The city is seeking to establish itself as a strong Northern centre for financial services. A report from law firm Irwin Mitchell said Leeds has expanded its financial sector substantially in recent years, with the city’s total output from finance and insurance increasing by 40 per cent between 2012 and 2015.

Five things to help direct your property investment strategy in 2018

Investor appetite for buy-to-let property didn’t diminish after Brexit and the latest UK House Price Index report from The Office for National Statistics stated that average house prices in the UK increased by 4.5% in the year to October 2017. So what should property investors in the UK and abroad be thinking about in 2018?

Location: The North West will remain a strong spot for investors

Manchester was one of the buy-to-let hotspots of 2017 and the rapid growth in jobs and population saw investors and developers clamouring for real estate in the city. Liverpool sits slightly behind Manchester in terms of popularity but the huge student population and £5 billion redevelopment of the city’s waterfront means the city is almost keeping up with its neighbour.

However, Manchester and to a lesser extent Liverpool, have become less affordable for some investors who are starting to turn their attention to Yorkshire, Nottingham and the smaller growing outside of London.

London loses its appeal in 2018

After a long period of rising house prices across London and chronic undersupply, investors have been priced out of the market and renters are struggling to pay for less space. In London, tenants are paying £100 per sq. m. compared to around 15 sq. m. for the same price in Bradford.

The Royal Institution of Chartered Surveyors (RICS) have suggested that house prices in London and the south-east will fall in 2018 and the UK is set to outperform London in house price growth over next five years says JLL UK Residential.

Smaller regional areas get greater attention

Some of the UK’s smaller cities and towns may be less well-known to international investors but if they exhibit the classic market drivers of: an increasing population; expanding and growing job market; and new large-scale infrastructure projects, investors should be considering these places as viable options for buy-to-let investment.

With lower entry price points than cities like Manchester which are growing fiercely, combined with the promise of catch-up growth because of government programmes like the Northern Powerhouse and the Midlands Engine, these lesser known cities are good investment options in 2018.

Interest rates will stay low

The Guardian reported that another 0.25% hike is expected in the first half of the year, taking the Bank of England base rate to 0.75%, although that is likely to be the only increase in the year.

For those with a mortgage, that will add £22 to the typical £175,000 tracker mortgage, but with more than half of all borrowers on fixed rates, it will probably go unnoticed by most homeowners and will only marginally affect portfolio property investors.

Housebuilding to increase

The need for new homes has been recognised and has moved up the government’s agenda over the last year with the publication of the government’s housing white paper. Back in November, the UK Prime Minster Theresa May promised to take “personal charge” of solving the housing crisis.

As a result, new home building in the UK has picked up with 217,000 homes coming on to the market in 2016-17, up 20% on the year before. But that only brings the total back to levels seen before the financial crash, and a long way short of the 300,000 target set by the government. The supply side of the housing equation will be less pressing than in previous years.

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.

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

Portfolio Items