Listen in on a seminar room full of property investors and you're likely to hear certain cities mentioned time and time again. Few conversations pass without at least a fleeting reference to Birmingham, Liverpool or Manchester, but this celebrity sometimes comes at a cost. Big university cities have been delivering some of the UK's top yields for a good number of years, but as their reputations have grown, so local prices have tended to rise. 

This raises an important question: is their long term potential to investors now hampered by their own well-publicised success?

To answer that, we spoke with one of our in-house investment advisers, Jason Guest.

Q. Manchester, Liverpool and others are delivering some great results, Is this sustainable & is there a problem?

No, there's no problem as such. Properties in parts of these cities are doing really well, and we're still recommending many of them to our clients. But it's about being careful about your choices. For years now, journalists, advisers and pundits have been touting the potential of places like Manchester city centre, and investors have been quick to seize on some great opportunities. Many of them have done well, and that's fuelled a continuing spiral of awareness and investment.  That's all fine, but the issue to be aware of is the maturity of the market. Rising demand from investors tends to raise prices generally, and that's clearly been happening for some time, particularly in key parts of these 'hotspot' cities. Continuing capital appreciation is good news for early investors, but it creates a challenge for newcomers to the market. Rising prices make it increasingly difficult for them to achieve the sorts of yields that attracted to them to the market in the first place. To enter these 'honeypot' markets now requires more money up front, which means average yields will tend to be lower; it may also demand a readiness to compete with some much better established landlords.

Q. So you feel the big cities may have reached their peak?

No, I wouldn't want to make such a broad statement. I think it's fairer to say that it will be a lot harder now to achieve great yields in some of the country's best-publicised city centres. Prices - and therefore the costs for new investors - have risen sharply in the last couple of years, and that will tend to dampen down average yields for new investors. But that concern only really applies to destinations that have been on people's radar for a considerable time. Parts of central Birmingham and Manchester probably fall into that category. I'd have fewer concerns about newer developments, of the kind we're seeing in Liverpool's docklands, for example. But even there, there's a lot of publicity being generated and that could eventually have the same effect. The big winners will be the early investors, while those coming later to the market
will have to pay more.

Q. So there's life in the cities yet?

Absolutely. I certainly don't want to suggest that aspiring landlords should turn away from cities altogether. Many of them have a great reputation and all the ingredients are still there for some very rewarding investments. For all its fame and continued growth, Manchester's property market is still characterised by strong demand and healthy average rentals. It never became overheated in the way that London did, so many parts of the city still look like very safe bets. The same is true of many districts of other big towns and cities - in the Midlands, Yorkshire and Scotland, too.  What I do think it's important to acknowledge is that patterns of supply and demand are always changing, so just because a market looks popular, it's no guarantee that it's completely safe or that it holds the greatest potential for profit.

Q. So don't just jump on the bandwagon...

Exactly. Up until the last couple of years or so, there will have been many wealthy investors who regarded central London as a fairly safe bet, and really just because lots of other investors had gone there before. So relying on the herd instinct isn't always a guarantee of safety. London's property market made a lot of people very rich for a time, but it all depended on the timing of the investment. 

Q. So where do you think investors should now be looking if they want better returns?

That depends on all sorts of different circumstances, including whether you're happy to take a longer term view. For those who are, it could be worth investigating markets that are close to areas of strong, widely recognised growth but where average values haven't yet been much affected. Many areas of robust growth tend to produce a sort of 'ripple effect' - a slower, steadier growth in average values that expands outward from the centre. It's good to catch those waves while average prices are still low.  In Manchester, for example, we've recently been looking at properties south of the centre, where prices are just starting to climb. In districts such as Chorlton, absolute values are still relatively low, but the prospects for steady growth are certainly encouraging. Areas like this could be a really attractive option for investors who may not have huge budgets to work with but who want to achieve really strong yields. The same could also be said of certain parts of the East Midlands and Yorkshire. Currently, we're seeing growing interest in places like Lincoln and Halifax, both of which are benefiting from economic growth within their respective regions.
But there's no one-size-fits-all solution. As I say, the right choice of property depends on all sorts of things. If an investor with a large, well established portfolio came to me with a budget of £300,000, we might prioritise capital growth and look at options for a single investment in one of the more prestigious, well known locations. But if a first-time investor came with the same budget, it might make more sense to prioritise rental yield and use the money to invest in a number of more affordable properties. This all comes back to my original point: it's about being careful about your choices. Part of that is about knowing what you want to achieve. If you want to make your money work hard, then it makes sense to prioritise yield - and that typically means choosing affordable, carefully researched properties in areas of high rental demand. Those won't necessarily be found in chic urban centres and the best-advertised destinations; often, they'll be on the periphery.

Q. So in summary, what tips would you offer to potential investors and what would you tell them to take into account?

Decide your level of comfort.  What level of risk are you happy with, are you risk averse or happy to see benefits only if the security is set in place, and what are you trying to achieve from the outset.

Procrastination, over analysing and waiting for the “next better investment” are the proverbial devils on the shoulder of many of the clients/investors I speak to.

If you are a safe investor and want well located property that is ready to go, provide natural steady growth and secure rentals then that is perfect for you, you will remain cash positive each month after deductions and in time your property will grow in value accordingly.  However if you want to explore the options that can generate a greater yield and much more dynamic appreciation then you have to have an open mind set, for example buying off plan or under construction rather than already built.  We all know of people who bought before the market boomed in certain locations (particularly London and the boroughs) and its so easy with hindsight to say they were lucky, or question how they made their wealth, BUT I can guarantee those investors took a risk when others would not, when they could see what others did not believe in, when they bought off plan in an area that was marketed as up and coming, and saw the minimal deposit they used maximise their returns.

If it's a set amount of cash you want to invest and just want it to work for you, then it is simple, go for the highest yield on offer, but again, the offers get better dependent which stage you buy.  This question also relates to strategy as well, in general, long term exponents of buying property always reap the benefits, but short term is possible, particularly if you are the more open minded type.

Spot the signs and the right buying signals of areas, and get to know your towns and cities.  Most people reading this will be on multiple databases and will be inundated with emails and in all likelihood they will be touting the same places, Liverpool, Manchester etc, but that does not mean that other locations offer as good, if not better opportunities.  The fact is, that getting into a City or location before it is on all the obvious portals is key, so look for hints of future growth, the University towns that are genuinely short of accommodation, look for new investment, new commercial ventures, watch the news, read blogs etc 

It is far better to get into a market early, rather than buy 3 years after it has been plastered over all the portals – for example, the actual City Centre of Manchester is quite a mature market now, but I have no doubt that if someone could buy a property at prices from 3 years ago, now, then it would be an easy decision, so it is become that person.

Not all cities can grow like London or Manchester, it has to be a major City, for example Birmingham now has all the signs that Manchester had 3-4 years ago, so that opportunity is there.  If you look at a property price heatmap of London 15 years ago, with red being the high prices that have plateaued and will grow naturally, and green being the area that has that room to move, you probably would have seen the Centre of London and the SW as red, if you go on the same heatmap in London now, you will see every borough from Ealing to Stratford, Catford to Cricklewood and beyond are red – meaning there is little room for movement. The “red” will grow from the centre outwards so it is finding those cities that have the inner areas primed for regeneration that have major movement in terms of infrastructure and development.

Do your homework and ask questions?  There is never a silly questions, and more often that not, clients struggle to pick up the phone and ask something that would have been a very straightforward answer, send an email, if the question is relevant then your consultant will be able to answer it.  Unless I'm asleep I'll always respond to a question, be it a phone call or whatsApp message or email, dont be afraid to ask.

This really applies to the BTL residential market and not so much the simpler student market – but be wary of rental guarantees on residential properties, these are where you need to do your homework, look at rents in the area on property portals and see how they equate to what is being offered, if it does not add up then do not consider it.  If a £150k property is being marketed with a 8% Net rental guarantee (£12,000 per annum after costs) and rents in the area are just £750 pcm for a like for like property then you can see there is an issue, it takes two minutes to check this but could save you a lifetime of headaches down the line.

Be realistic!

Again we all know someone who is receiving 10% net returns in London, but ask the question of when they bought that property, it will be many years ago and rentals have increased as their property purchase price remains the same as it was when they bought 20 years ago. The numerous TV programmes always show successes and in most cases they are, but all investments have risks, so if it a set amount you want clear into your bank, if it is a 10 year plan, then don’t deviate from that and expect something that is not realistic. Residential properties do not come on the market offering 10% net returns, these are achieved through maturing, ask yourself, why would anyone sell something so lucrative.

Know your difference between return on investment and return on cash invested as they are two different things, have a plan, set out to achieve it and keep your feet on the ground, the clients who do this
invariably succeed and the ones who run before they can walk, often, encounter problems.

Have a budget and stick to it.

If you have questions about property investment options, please call Jason or one of our advisory team on 01244 343 355 or complete this ENQUIRY FORM to be contacted directly by a consultant.

Property investors may well have read reports that in the first quarter of 2018, houses in multiple occupation (HMOs) typically delivered the best rental returns of all UK property classes - producing average yields of 7.1%.

We have often made the point that average national figures don't mean a great deal, mainly because so much depends on local market conditions. Nevertheless, some HMOs are clearly delivering good results in
parts of the country, so we thought we'd take this opportunity to examine the subject. We approached our in-house specialist, property investment consultant Michael Johns, and asked him for his views.

Q. 7.1% is a respectable return. Are HMOs as good as they seem?

[Laughs.] Well, we're starting with a deceptively difficult question. I suppose I'd have to say that yes, some HMOs are delivering good profits. But this is a very chequered market, and returns vary considerably in different areas. There are all sorts of reasons for that, so to make the kind of returns that the headlines are suggesting, investors will have to do a lot of careful homework.  On the plus side, HMOs are purpose-designed to maximise rental income. Take a conventional house and convert it to put as many bedrooms in as you can, and - so long as the demand is there - you're almost bound to achieve better returns than you would from the original home. But a lot depends on how you buy it in the first place - whether as a traditional home or as a ready-converted HMO. Another big consideration will be the need for ongoing management.

Q. Let's take the first of those issues: the initial purchase. How does that affect profitability?

This is a big issue. There are essentially two ways to invest in an HMO. One is to buy an existing HMO, and the other is to buy a house that you plan to convert. Of the two, the second option is almost always the more profitable. When you buy an ordinary house, you'll be buying at about the standard market valuation and you'll be able to get a mortgage on it, so you should subsequently be able to take advantage of leverage as capital values rise. On the other hand, if you buy an HMO from its existing landlord, he or she will be valuing it as a live investment - very much like a business - so it will tend to be priced a lot higher because of the yields it delivers.
To put some numbers to that as an example, you might pay £200,000 for a conventional home, on top of which you'll pay a few thousand in conversion costs. But if that same property has already been converted and run as an HMO, you might be looking at closer to £280,000. To add to that, you'll probably also find that banks aren't willing to lend against that sort of higher valuation, so you'd then be looking at a cash purchase, which means you've no chance of getting any leverage advantage. Finally that same restriction also means that if and when you want to sell the property, you too will only be able to sell to cash buyers, so your market will be more limited.

For those reasons, if you're looking at investing in an HMO, my personal view is that you would be better to go for a traditional property and convert it yourself.

Q. You mentioned the need for ongoing management...

Yes, and that's another big consideration. In my experience, HMOs take an awful lot of managing. Often, you'll be looking at older properties that have been in private rather than business ownership. Consequently, they won't always have been professionally maintained. Besides facing the initial conversion costs, investors might have to deal with safety improvements, energy efficiency upgrades and more general repairs than, say, a new build investment opportunity. And even if the property was previously run as an HMO by someone else, these things might not have been adequately looked after. It's probably
fair to say that this is an under-regulated part of the industry so it's important to check for yourself that your new property meets all the relevant safety and energy regulations. After that comes the need to keep the place well maintained and marketable. Here, a lot depends on the kind of tenants you get. A lot of HMOs are about providing much-needed accommodation at the most affordable end of the market, so typical
tenants might include students and young workers who are trying to move up the career ladder. These aren't always the most conscientious, careful or long-term tenants, so be prepared for regular repair and maintenance bills.

Of course, that's not to say that you have to manage such things yourself. Many investors choose to appoint a rental management agent. That's fine, but some management companies charge a premium because they know how much work is likely to be involved, and some refuse to take on that sort of work at all. If you're looking for a hands-off HMO investment, it will pay to do proper research in order to find a suitable agency - one that can deliver a professional service at a sensible price.

Q. You're making HMOs sound like quite an onerous investment...

No, not necessarily. It's just that it can take a lot of genuinely hard work to find the right property in the right area, on the right terms, and available with the right support.  Look at it this way: there's a definite shortage of affordable accommodation for students, young people and for lower income workers who are trying to move up. HMOs meet that need in a way that doesn't require a lot of new building on greenbelt
land. At the same time, a well chosen property can also deliver healthy profits for the landlord. So HMOs certainly shouldn't be dismissed out of hand; it's just that I know a lot of investors who have said "I bought an HMO and I didn't realise how much work it would be; now I wish I'd gone for something else." It can be a bit of a minefield and people need to approach this market with their eyes wide open.

Q. So are there other pitfalls people should be aware of?

Regulation.  I think the UK Government is taking an increasingly anti-HMO stance, and local councils are gradually introducing more and more restrictions. In Liverpool, for example, HMO landlords now need to have a licence, which they have to renew (and pay for) every year. In Nottingham, landlords need a separate licence for every HMO they own. There's a lot more paperwork coming in, and slowly mounting
costs, so it's possible that central and local government will gradually try to legislate the market out of existence.
There are several reasons why the public sector is feeling wary of HMOs. Partly it's about government not wanting to see too many family homes being converted into private rentals. Partly it's about local planning concerns - for example, not wanting to see a house full of noisy students moving into an otherwise quiet family neighbourhood. HMOs also have higher levels of occupancy, so they can
add to local parking and traffic problems, which can also be a headache for councils. These can be emotive issues for residents and they can quickly turn political.

One other legislative issue is the possibility that local authorities will soon insist on minimum room sizes, in an effort to eliminate the kind of stories you read about people renting out 'a cupboard under the stairs'. You can see the motivation, but it opens up a can of worms: people in smaller units might be forced out and have to look for lodgings elsewhere; lodgings that they might not be able to afford. That risks more problems with homelessness and other social problems, and more pressure on an already under-supplied housing market.

Q. So, all in all, are HMOs worth the hard work?

There's no right answer to that. Choose a good one and yes, it could easily be worth it. But you need to buy on the right terms and in the right area. It needs to be in decent condition, and you need to be confident that you can meet all your legal responsibilities without eroding your margins too much. You need to be confident that you understand - and can pay for - the likely maintenance demands, and you need to decide whether you can afford the added costs of a management agency if you plan to make it a hands-off investment.
That all takes time and effort but if you make the right choices, then an HMO can deliver good profits.

Q. It sounds like there's a 'but' coming...

Of course.  We've already looked at some of the pitfalls and people really need to be conscious of them. They also need to consider the alternatives. The headlines back in May identified HMOs as the number one investment for yields but that's looking at a broad national average. In reality, I think there are better options available in many parts of the UK.

Q. Like what?

7.1% is a pretty good yield but there are off-plan developments offering higher returns and these are sometimes assured for five or more years - so they'll deliver better returns with the added benefit of investment security.  And serviced apartments are really coming to the fore this year. They're still a relatively new option for many investors - which might be one reason why they haven't previously featured in national statistics - but they tend to produce much better yields than other property classes. You might be looking at returns of around 8% to 10%, and importantly, they take investors into a more reputable, higher value market. As a result, management agencies will be more ready to offer affordable support, ongoing maintenance costs are likely to be lower, and landlords are less likely to get calls from angry neighbours complaining about noise in the middle of the night.

Q. So, any final thoughts?

It's all about being realistic; doing the research and being aware of what you're committing to. Without question, some HMOs will produce very worthwhile returns, but I know a lot of investors who have regretted buying HMOs that were promoted on the basis of unrealistic figures. People have told me they were led to expect returns of 12% but when all the costs had been paid, the real figure turned out to be much more like 5% or 6%. That isn't terrible, of course, but that's probably going to have been the result of an awful lot of work. There are easier, hands-off investment opportunities that promise better yields, more security and less vulnerability to future changes in legislation.

If you have questions about property investment options, please call Michael or one of our other advisers on 01244 343 355.

On Thursday 2nd August 2018, the Bank of England's Monetary Policy Committee raised the base rate of lending to 0.75%. The move had long been expected, so it took few by surprise, but the 0.25% increase does inevitably raise questions about its likely impact on landlords.

For some buy-to-let investors, of course, it will have no immediate consequences at all. A large part of the private rental sector is made up of cash buyers and 'accidental landlords' who, having inherited property, choose to let rather than sell it. For this mortgage-free section of the market, a change in base rate has little or no direct impact.

However, there is another sizeable portion of the sector that does rely on finance. Investors with buy-to-let mortgages fall into two major categories - those with fixed rate deals, and those on variable rates. Those operating on a fixed rate basis will see no change in their repayment costs until such time as their contract period expires. In the short term, it is only those with variable rate mortgages who are likely to be significantly affected.

In recent years, the number of landlords opting for variable rate deals has fallen. According to the 2018 Buy to Let Mortgage Index published by Mortgages for Business, 93% of all new BTL mortgages arranged in the second quarter of this year were agreed at fixed rates. That's a sizeable majority, and most of these deals were for relatively long periods - typically for five years. This will keep a good number of investors well insulated against rising costs. Nevertheless, this does leave a minority of landlords for whom the increased cost of borrowing will have an adverse impact. The National Landlords Association estimates that the average value of BTL borrowing is approximately £77,000 and, on that, the extra 0.25% will equate to an added cost of £16 per month. In itself, that is a relatively small sum, but it could raise profitability concerns for those landlords already operating with very tight margins.

Yields and Profitability

A rise of 0.25% is modest by any standards, and it was widely predicted. The new rate of 0.75% is still exceptionally low in historical terms and it should certainly not be enough jeopardise a well-chosen investment. Faced with this widely predicted increase, some investors may simply absorb the added cost, while others will pass some or all of it on in the form of increased rents.

However, the hike in costs does serve to focus attention on profitability. There are some sections of the BTL market that deliver very small margins, and it is here - usually at the lower end of the quality scale - that base rate rises tend to cause the greatest financial problems. New investors will want to avoid such markets altogether, but for those landlords already operating in them, the best advice might simply be to adopt a new strategy: to sell up and, where possible, reinvest in more rewarding properties.

That, of course, is simplistic, but it stems from a simple truth. One does not need vast sums up front in order to invest in properties that deliver good, healthy returns. Across the UK, there are new-build flats and student apartments that may be secured for as little as £60,000, and yet some of these will deliver assured yields of around 7% to 8%. By contrast, £60,000 may only represent the initial down-payment on some conventional residential properties that require significant borrowing and which ultimately produce much lower yields.  This is a critical consideration. Yields are one of the most important measures of an investment's success, and in cases where profit margins are becoming perilously thin, it will often pay to reconsider one's portfolio.

Investing for Security

We live in turbulent economic times, with Brexit and other matters adding to the challenges that investors normally face. However, there are numerous affordable investment opportunities that keep risk to a minimum and which offer more than enough breathing room to cope with future base rate rises.  In many parts of the UK, we are seeing private investors earning rental yields of 6% to 7% on standard residential properties - that is to say, on apartments and houses in areas where demand is strong. These are returns that far surpass the rates offered on high street savings accounts, and in the longer term, they will
normally offer the additional benefit of a steady rise in capital values. Some investors can opt for properties that offer additional safeguards. For example, cash buyers may choose student properties and other new developments that offer assured yields for periods of 5 or more years. Returns of between 6% and 10% are often then achievable.

For even greater financial resilience, it can be a good idea to look for a mixed tenure development that allows investors to let their property either on a conventional basis or as a serviced apartment. The latter is becoming increasingly popular amongst both tenants and landlords, and in our experience, serviced apartments can deliver net yields of between 8% and 11%. Such returns clearly provide a more than adequate buffer against future base rate fluctuations.

The Mortgage Market

The Monetary Policy Committee has signalled that at least one more rate rise is likely before 2020. Any such changes will be small and signalled well in advance, but the truth is that the cost of borrowing is still exceptionally low and, with inflation running ahead of the Bank of England's target 2%, it is only likely to move in one direction.  Faced with the prospect of further rises, most landlords are now opting for fixed rate
mortgages, and lenders are doing all they can to accommodate them. The cost of a fixed rate mortgage is not much higher than a new variable rate mortgage, and in the face of so much economic uncertainty, fixing one's costs makes a good deal of sense. What's more, the mortgage market remains very competitive and around one in five lenders are now waiving any arrangement fees; others are offering incentives including free legal support and free valuations.

For those investors who cannot afford to alter their portfolios, then there is at least the option to remortgage, and many are doing so. Indeed, recent figures suggest that the number of people remortgaging is
currently outpacing the number of people seeking to make new purchases. Thus, while future base rate rises are a factor to consider, most investors still have plenty of options to protect themselves against the worst of their effects.

* * *

If you're thinking about re-structuring your borrowing, or if you'd like to re-examine your property portfolio, please contact us today. We can put you in touch with a selection of reputable advisers and we can introduce you to a range of investment opportunities that offer exceptional yields and security.

For more details, please call our advisory team on 01244 343 355 option 1.

Over the last week, members of the Residential Estates team have been visiting Tel Aviv to talk to the increasing numbers of Israeli investors who are turning to the UK property market to make their next moves. The event, called 'Royal Week', was hosted by Avi Idan and Naftali of www.t-nadlan.com 

It has been an interesting experience. As a British business operating within Britain, it's often easy to take certain aspects of the market for granted, but talking with foreign investors is a great way to remind ourselves about some of the unique advantages afforded by UK property.

Read the full story here...

With house prices in the UK’s capital having reached epic levels, investors have turned their attention to the regions and even Londoners themselves have been looking elsewhere.  Over the past five years, the number of people moving out of the city has risen by 80%, with over 93,000 departing in 2016. While Birmingham has been the favourite destination and other regional cities like Bristol and Leeds are amongst the top 20, the majority of people leaving London head for locations much closer.  As Londoners have discovered, in towns like Luton, just half an hour away, property prices can be as much as  50% lower and for investors they offer far better yields and capital growth prospects.  

It’s not surprising then that Luton was named as the UK’s number 1 property investment hotspot in 2016 by the Halifax Building Society, with a 19.4% rise in property prices, more than twice the UK national average of 7.5%. The average house price in Luton stood at £256,636, having gained £41.702 in a year and offered an average rental return of 4.81%. Indeed, the outer ring towns like Luton and Stevenage are amongst those with the fastest rising properties, and the trend is likely to continue in the coming years. Savills predicts that Luton prices will rise by an average of 41% between 2016 and 2019.  

Best known as the location for London Luton Airport, the home of Vauxhall vans and of Nadiya Hussain, the winner of the popular TV show Bake Off, Luton lies just 30 miles north of London and 22 minutes away by train. It has been described as one of the UK’s most affordable commuter towns but its appeal is not limited to lower property prices – the town is the location for a number of major regeneration schemes with a total value of £1.5bn which are expected to create 18,000 new jobs over the next 20 years.  They include the £110m redevelopment of Luton Airport, which is already underway, and a new 395 - acre Enterprise Zone. In total there are eight major strategic development sites offering retail, leisure, hotels and housing opportunities and large sites for engineering, technology, creative and aviation - linked employment.  The Luton Direct Air Rail Transport, which will link the Luton Airport Parkway railway station to the airport,  should also boost economic growth. Just opposite the station, Napier Gateway will see the creation of new homes and facilities on a former Vauxhall site and is set to complete in 2020. Other projects include a new £150m football and concert stadium, investment in the town’s Cultural Quarter, a Hilton Hotel and new transport facilities in the town centre.  Luton is also home to the University of Bedfordshire which has over 15,600 students.

“London has long been a global property investment hub, but those investing in the capital need to have large budgets and be willing to accept low yields. For those who want exposure to the capital’s property market but are looking for better value and returns, Luton is the ideal choice. Those who invest now can take advantage of rising demand as Londoners increasingly move out beyond the city’s boundaries, and of the investment taking place which will transform Luton into the leading out - of - London property hotspot.”

Links below:

Redevelopment of Luton Town FC http://www.2020developments.co.uk/

Newlands Park: The proposed new development sits on a 40 - acre site adjoining Junction 10 of the M1. Once completed, it will provide a significant landmark development comprising 500,000 sq ft of office space alongside leisure, retail, hotel and hospitality, served by under croft parking. The topography of the site enables us to create a positive design statement with high visibility from the M1, while an iconic ‘crystal’ design to the north creates a sense of space and aspiration  – complementing Luton Town Centre and contributing significantly to the local economy, with Newlands Park expected to deliver 4,000+ high quality jobs http://www.andarchitects.co.uk/luton

Luton has been named as the top spot for rental yield and price growth, according to LendInvest.  http://www.propertyindustryeye.com/luton

For more information on investing in Luton please contact our office on 01244 343 355, or email sales@residential-estates.co.uk

The Wimbledon Tennis Championships are here again, and for the seventh year in a row the prize money on offer from the All England Lawn Tennis Club has increased. The overall prize money pot stands at £34 million, with the winners of both the women’s and men’s single tournament taking home a staggering £2.25 million on top of the crown.

You’d think that would help them to find the perfect home right on the doorstep of the Championships, but alas, this prize money doesn’t leave enough to purchase a house in the area. In SW19 the average house price currently stands at £2.9 million. As an average price, this is a high price even for those earning well on the tennis circuit year in and year out.

Most of the private homes that the tennis stars rent over the course of the tournament are rarely for sale, with families keeping homes for generations. They can expect to see a return of up to £10k per week to rent
out a home during peak season, and the asking price would be as high as £6 million to £7 million in most cases. Keeping these homes in the family and renting them out to rich sporting stars for a few weeks at a time doesn’t bring with it much of an incentive to sell on.

To put the prices into context, at the average house price in the area of £2.9 million, a person would still have to earn around £400,000 per year in order to acquire a mortgage large enough for a detached Wimbledon property. When you consider stamp duty on top of that and legal costs, you can see why even the richest of the tennis stars playing at Wimbledon would think twice about buying property in the area. A deposit for a first-home in London is around the £92,000 mark on average, so even if you were to reach the third round of Wimbledon and used the £100,000 prize money as a deposit on a home, you’d only be left with around £8,000 to play with.

London House Prices Falling

Despite this latest news and the average house price in the Wimbledon area remaining too high even for the stars of the sport, there has been a continued fall in London house prices generally. This acceleration in
the market slump has reached its fastest pace since the autumn of 2009 when we were still feeling the after effects of the financial crash. During the spring quarter there was a 1.9% drop in property values in London compared with 2017.  In the first quarter of this year there has been a 1% drop from the previous year.

It is the first time since 2009 that we have seen a drop in property values at such a pace, with four consecutive quarters leading to the average house price losing £9,297 in value in the last year alone.

UK Property Market Update

Nationwide has seen a slightly different story however, with Halifax stating that UK house prices have risen for a second month, despite the market remaining flat and the annual growth rate falling yet again.

The average house price in the UK has risen by £745 in June (a 0.3% increase), yet this annual rate of growth has fallen for the third month in a row at 1.8% when compared with the autumn figure of 4%. The pattern seems to be familiar with house prices right across the country rising up a notch, only to decrease in valuation a month or two down the line. It is a fluctuating, yet subdued house market currently. In London there is obviously the general trend of a higher valuation of property to begin with, but across the whole country we are seeing a similar pattern.

At Residential Estates we have built a foundation that is strong. Our team is packed full of experts within the industry, each with a special niche within property investment that you can utilise as our client. We
can offer an extensive range of advice and guidance on all aspects of property investment, taking your personal circumstances into consideration. What we do is provide our clients with as much relevant financial information, as well as property precise location and industry information so that you are well informed when it comes to making a decision about property investment.

If you would like to find out more about our service, please feel free to get in touch with us today. You can speak to us by dialling 01244 343 355 or by emailing sales@residential-estates.co.uk and we’ll be happy to chat with you further about your desires, property requirements and budgets. Our live chat function on the website is also a fantastic place to pop by for an immediate chat with a friendly expert from our team.

The Bank of England Financial Stability Report - June 2018 click HERE

Please click for the Bank of England Agents Summary of Business Conditions Q2 2018

IT’S not often in the world of investment property that you get to shout about your success stories, especially as an agent, but Residential Estates were so pleased with the speed and success of its latest sale in the centre of Chester, that it was worthy of a mention.

City Suites, 38 City Road, Chester is a commercial property recently acquired by the Ladson Group, to be developed, refurbished and restyled into 21 high specification apartments, ranging from studios, one and two bedrooms. Taking just slightly less than a month to sell all 21, Residential Estates is proud to have been the agent chosen by the Ladson Group to sell these apartments. Open for purchase to anyone, but aimed at property investors, the apartments are ideal for the buy to let market as they will be finished to a high standard,located on the same street as the train station, close to the canal and within a five minute short walk of the city centre itself.  “Location, although a bit of a cliché, plays a huge part of what makes up an attractive investment opportunity,” said Michael Holliday, investment manager, Residential Estates. “Its not often that a development such as this becomes available in the Chester area, once we completed our research we jumped at that chance to work on behalf of the Ladson Group, and were incredibly keen to offer this fantastic development to our investor clients.”  Michael went on to add: “The Ladson Group is a renowned, well established developer, whose developments are always finished to a high standard, and this coupled with the great location made it an easy choice to accept, though we were not expecting that on the first day of launching it to our clients we would sell half of the apartments.”

The remaining apartments were sold throughout the next three weeks, with the last apartment being reserved just little under a month from launch. The Ladson Group is a privately owned property development company, founded in 1980, and based in South Manchester. Its aim is to provide the highest standard of accommodation for both the residential and student sector throughout the UK. Currently they are working on a residential project in the heart of Preston, overlooking the well known and picturesque Winckley Square. Guy Ladson was extremely pleased with the uptake of the development and is happy to continue the relationship founded with Residential Estates. 

For more information on UK property investments visit Residential Estates at www.residential-estates.co.uk or feel free to call 01244 343 355 option 1.

In a number of recent posts, we've talked about a reversal of the traditional North South divide. For serious buy to let investors (those who are in it for the long term and for whom rental yields are the prime concern) the lower priced markets of the North are where money tends to work the hardest.  There are exceptions. Recent rental data has indicated some good performers in the Midlands, for example, but it is the northern towns and cities that are leading the tables. Scotland produces a few winners, as do parts of the North East, but the greatest concentration of high-yielding properties lies within a triangle bounded by the three largest cities in the North West. Liverpool is one, Manchester is another, and we've covered both in previous reports.

The other point of the triangle is the North West's third largest city: Preston. 

For years, it had showed lacklustre economic performance and, like many parts of the region, it had seen a slow recovery in local property values. However, since 2013, it has begun an important transformation. In very short order, it has moved up the property investment charts and now routinely sits in the top 10 of buy to let hotspots.  TotallyMoney's 'Buy-to-Let Yield Map 2018' puts Preston in 8th place nationally, with districts of Liverpool and Manchester dominating the slots above. It finds that yields in Preston are averaging around 8.65%. That's based on a typical asking price of £125,341 and a mean rental value of £903.

The Student Market

One reason for Preston's attractiveness to investors is undoubtedly its huge student population. The University of Central Lancashire has played an important role in transforming the city, introducing new blood in the form of around 30,000 students and a veritable army of staff. UCLan is one of the UK's largest universities and the fifth biggest employer in the whole of the North West. The university's presence underpins rental demand and is one of the chief reasons why well-informed institutional investors are now sinking millions into student property developments.

Rising Population:

The City of Preston has an estimated population of a little over 141,000 but forecasters expect the number to rise steadily over the next 20 years. The projected increase is only modest - an upturn of around 4,500 residents by 2039 - though that figure could rise more quickly if new investment projects gain the expected traction. In any event, the city's growing population will undoubtedly help to sustain rising demand for accommodation, thereby buoying up both rental and capital values for the foreseeable future.

Economic Regeneration

The biggest news for property investors has been the signing of the Preston, South Ribble and Lancashire City Deal. This landmark agreement has secured £434m of funding, accelerating investment in transport infrastructure and promising the creation of around 20,000 new jobs . The collective impact of the deal should see the local economy grow by approximately £1 billion over the course of the next ten years.

The City Centre

Although TotallyMoney's latest rental report puts Preston eighth in its list of "the best buy to let areas in Britain", the city looks even more attractive as one gets closer to the centre. Earlier this year, TotallyMoney
found that yields in the central PR1 postcode were hovering around 10.04%. That's a return that puts the district in the UK's top five.  This is understandable in many ways. The university sits within this postcode, as do many new student residence developments; the area also encompasses some attractive properties around the city's marina. Desirable properties and city centre convenience often combine to generate strong demand, and here is no exception. However, PR1 is also home to concentrations of some very low priced properties that, while they might not be high-spec, certainly produce solid and dependable rental incomes.

But there's a risk in reading too much into these numbers. The 'centre' is actually a very large area, particularly if one defines it in terms of postcode. East to west, PR1 measures over 8.5km; north to south, it's nearly 6km. The total area encompasses everything from luxury riverside properties to housing association flats. Judging the market on these terms alone is likely to be misleading; it makes more sense to focus on the areas of greatest market potential.

The very centre of the city is where serious investors might wish to focus their attention. It's here that much of the City Deal funding is being spent. Recent improvements have included the city's main high streets, Fishergate and Friargate, and a £50 million facelift for Preston's Market Quarter. In addition to recently completed structural refurbishments, the markets will see the construction of a new cinema, retail units, parking facilities and restaurants.

Preston Railway Station

Another beneficiary of inward investment is the railway station, which, set on the West Cost Mainline, affords access to both London and Edinburgh in approximately 2 hours. The station is widely tipped to benefit from a future HS2 extension and, already, Virgin Trains has committed £1.5 million for improvements to its entrances and facilities.

Winckley Square (seen in the blog image)

Bounded by the offices of legal practices, accountants and other professional agencies, Winckley Square is a historic garden square set right in the heart of the city. In recent months, it has benefited from a £1.2million improvement programme, supported by the Heritage Lottery Fund, which has delivered new paths, seating, planting and lighting. Adrian Phillips, Preston City Council's director of environment
described it as "one of the finest examples of a Georgian square in the North of England," and noted that the improvements had precipitated a surge in its popularity.  Properties in this immediate locale benefit from a beautiful central location, the shortest of walks to the high street, and proximity to some of the city's most important employers. County Hall - the main seat of Lancashire County Council - is just a few hundred metres away, while the university and the offices of Preston City Council are both within easy walking distance. The first property was erected here in 1799, the square being conceived as an exclusive residential area. Commemorative notes set into the square's central seating area indicate many of the surrounding properties and the names of their original residents - individuals who included judges, doctors, a mayor, and the notable suffragette Edith Rigby. Today, thanks to significant investment, Winckley Square is rediscovering its identity as the city's most sought-after address.  Accordingly, new office conversion schemes are creating some of the region's most appealing residential properties.

Summary

Very low property prices, together with robust rental demand have helped to propel Preston to the top of the charts for buy to let investment. Capital growth may not have been so startling as in some other regions, but for those looking for healthy yields rather than quick, high risk gains, it's a market worthy of serious consideration.

Properties of an exceptionally high quality are readily affordable, and those in the very centre will be ideally suited to the needs of higher-spending professional tenants. More generally, investors can have real confidence in local rental demand. Preston benefits from a large student body, a rising population and the expectation that the City Deal will create 20,000 new jobs. Not only that, but, millions more have yet to be spent, and that's to say nothing of the potential economic impact of HS2 and Northern Powerhouse funding.

Widely cited as an example of best practice in economic regeneration, Preston is a city that is quickly finding its feet. For investors, it represents a rare and appealing opportunity.

* *

To find out more about investment opportunities in Preston, please call our advisory team on 01244 343 355 option 4.  or contact one of our advisors here.

To a lot of people the idea of a rental assurance is a very reassuring thought, and they are exactly that when they are in place, in fact more and more local estate agents are offering rental assurances on normal AST rental properties when they are in desired locations – everyone wins really, the agent potentially makes more money and the owner has security, but with just a small hit on the return – so for example, if you have a property that would normally rent for £700 pcm and the potential of voids (and the rule is you allow for 2 months void when working out your returns) and you are assured £650 pcm but without the risk of voids then that is a good thing (12 x £650 = £7,800 and 10 x £700 = £7,000) but obviously it is a risk reward thing and you may well not have any voids at all should you want the full amount, but it’s nice to have that comfort blanket in my opinion and then it is somebody else taking on the risk of getting a tenant.

So when properties are sold to investors that offer a rental guarantee, then it is an attractive feature, although understanding why they are offered is important, how they are managed and the “what happens if” questions are answered.

The majority of rental guarantee options are cash investments and revolve around student options but there are also plenty of residential developments that offer this option as well, it is worth noting on the residential side that lenders do not tend to like rental guarantees which might seem bizarre but they feel that the guarantee is somehow hidden into the price paid, it’s a flawed logic but in honesty it is the case on some developments (and how to see if it is pre-loaded into the price will be mentioned later).

What does a rental guarantee mean?

Under a guaranteed rent scheme, a landlord signs over their property to a company or letting agent for a specified period of time, in return for a guaranteed monthly/quarterly income. The agent then "lets" / "sublets" the property to tenants and manages the tenancy. Most schemes also promise to cover any void periods and maintenance costs.

This means that the owner is assured their agreed rent, and will be protected from void periods, they will also have all their management and letting costs covered, maintenance and any service charges – the management and service charges are still paid, but they are deducted from the gross rent to allow you your guaranteed rent – in some cases ground rent is also covered but in most it is not, this is a separate cost.

So why are rent guarantees offered and who manages it?

Simply because a management company feel they can fill the development, but they will only take it on if they manage the entire block, then because of economies of scale, and the fact they already have the man
power and systems in place, they can manage it for a fraction of what an individual could, or A.N Other management company could do - so again from a business point of view they can make more and can protect the investor from voids and then agree a % return that is attractive to the owner, pretty straightforward when you think about it.  They will only aim to make a small profit from each unit over the allocated time of the rental guarantee but when you take a small amount and multiply it by 100 or 150 units then you can see why it works for them, and it is worth noting that you would not be able to make the extra they take by having another management company or by yourself because if those economies of scale.

Why do they issue them for 3 to 5 years generally, or more importantly why do we feel these are the best options?

This is always a question that is asked, and the answer is because they know that during that period they can sustain that level of income and then they will get reviewed – like any property you own, you would hope that rents increase after 5 years so why wouldn’t this be the same, this is why we do not advocate or promote 10 year rental guarantees, because you are losing out – it is a rental market right now and this is not going to change as they estimate that 2/3rds of millennials will rent for the vast majority of their working life and in particular student numbers are increasing year by year, particularly from overseas, so this means that rents are going to increase as demand increases and there is a lack of supply of suitable accommodation. So once your initial rental period is over you would be quite right to assume your rental returns will increase and any new assurance will be for more. So if you have a rent of £150 per week and this gives you a 9% return after deductions now on a £70,000 property and rents have increased by 3% per year (the most touted figure) then that £150 per week unit would now be around £200 per week in year 10 which would entitle you to something like a 14% net return – why would you want to be only achieving 9% from years 5-10 when you could get 12% and securing your returns and protecting yourself from voids.

How do I know my rental guarantee is fair?

That is quite easy to work out, but this is by far the most important factor when it comes to rental guarantees – you need comparable evidence, and that is it – so you need to know that if you were not offered a
rental guarantee, or it wasn’t in place that you would be achieving the same sort of return – for example if you know a functioning self contained studio operating in the same location and used for the same market place is achieving £150 per week then this gives you a annual return of £7,800 – your management, service charges and ground rent come to £1,500 then this leave you Net returns of £6,300. The property is costing you £70,000 and you are being offered 9% Net returns for 5 years – 9% of £70,000 is £6,300 per annum which means you know that your rental guarantee is not only achievable (and the management company, and the economies of scale, as mentioned before, can run the block for less that an independent, hence they can offer the protection) but it also a “real” return, meaning it has not been factored into the price.

But this can go the other way...

A client of mine asked me to give an opinion on a residential investment in one of the large cities – the potential buyer was looking to purchase a 2 bed apartment for £180,000 (and hoping to get a 75% mortgage) and it offered a 7% Net rental guarantee – now that sounds like a VERY appealing return, but once you broke it down it becomes a horror show. Based on the cost of the apartment, the net return per annum would be £12,600 – as the return was net then you have to take into account the management, service charges and ground rent which worked out to be £2,200 per annum. This means that the guarantee would have to be making sure that the income for the property would be £12,600 + £2,200 = £14,800 per annum to be a “real return” or to break it down, £1,233 per month. I did what any lender would do, googled the postcode, found like for like developments and found an equivalent apartment and looked at what it was renting for and it was £700 pcm – so take into account the additional expenses of £2,200 per year that the owner has to pay, this would be £700 x 12 months = £8,400, deduct the service charges of £2,200 and this would leave the investor with £6,200 per annum which equates to a 3.44% net return – under HALF the guaranteed amount.

So the question is obvious – how can they offer 7% for 2 years – the answer is unfortunate, because the rental guarantee has been added into the price, you have paid for your own returns, so in numbers you have probably paid an extra £12k for an apartment.  What is worse, these are the same checks a lender would do – so it means they cant justify or approve the rental returns you are saying you have guaranteed and because you have effectively paid for your own returns you have an overpriced property and the valuation is declined, this means no mortgage and you either have to have the cash or you risk losing your exchange deposit – you may have the option of selling on before completion but you will only be able to sell it on at a real price so you would lose money.

To sum up

So yes, rental guarantees, when demand and the figure can be proved are a wonderful thing, they offer you security and zero hassle, but when they are merely used as an incentive and pre loaded into the price then you have a whole heap of trouble, and wherever you buy, if it has a rental guarantee then these are the first things you have to ask to be proved and provided to you.

If you would like any information on current options with rental guarantees that DO stack up then let me know, we have offerings up to 10% NET return on your investment and starting from a price of £49,995, or if you would simply like to have a chat about property investments in general then please feel free to contact Residential Estates by clicking HERE or phone 01244 343 355 option 4.

Residential Estates were at Bangor on Dee racecourse yesterday! What a fantastic day had by all, some money lost and some won, great food, good company and we had sun all day! Residential Estates also sponsored one of the races and chose the best turned out horse for that particular race.  

Many thanks to Steve for the day, and to all the team and guests, same time next year. 

In the first part of this article, we focused on private sector investment in the city, which is happening on a colossal scale. Major employers such as Nissan and Rolls Royce are supporting extensive supply chains and sustaining thousands of jobs, but still more are expected as a result of growth in key industries such as advanced manufacturing.

Investors with property in Sunderland can therefore look forward to an extended period of economic growth and rising demand for rentals. And importantly, much of this demand will stem from those with higher skills and incomes, so landlords with higher quality properties to let are set to benefit the most.

Private sector investment continues to energise the economy and it seems inevitable that it will do good things for the property market too. However, it is not all about business and industry; there are other important factors that make Sunderland an exciting investment destination, and it's these that we'll consider in this post.

Rising Employment

In July last year, the Leader of Sunderland City Council, Cllr Paul Watson said "Sunderland is undergoing huge change, building on our great history of enterprise and endeavour to become a modern and prosperous 21st century city." This is certainly true, and with such a lot happening, it's no surprise that employment is rising steadily. In fact, such is the rate of job growth that the Council is actively concerned that demand for jobs may actually outstrip the city's ability to supply workers. The result is that Sunderland is becoming a 'net importer of labour.'

The council’s Employment Land Review (2016) indicates that between 1997 and 2015, the total number of jobs in the city increased by 9,630 - a growth rate of 8.0%. Increasing numbers of workers are therefore commuting to the city, but many are finding it difficult to settle due to a scarcity of good quality 'starter size' accommodation. The bulk of local housing stock is relatively old, of questionable quality and bunched within the '2 to 3 bedrooms' bracket. The scale of unsatisfied demand for good, one-bedroom units could afford an important opportunity for investors.

Rising Population:

In our first ost, we pointed out that Sunderland boasts a very large university student body. This, combined with an influx of new workers and natural growth in the city's own population, is all adding to pressure on the housing market.

The city's population has been rising since 2009 and is forecast to grow by over 8,000 between now and 2033. Projections published by the Office for National Statistics suggest that the number of over 65s will also add to demand for housing, rising by around 22,000 by 2039. Housing supply is unlikely to be able to keep pace, so rental demand should stay extremely strong for the foreseeable future, and the
imbalance between supply and demand could begin to drive further capital appreciation.

Public Investment

Despite concerns that "forecast population growth would not be sufficient to support the anticipated level of jobs growth within the city," Sunderland City Council and its partners are certainly not taking that as any excuse to slow the pace of economic development. On the contrary, their efforts are intensifying - and to evident effect.

Major projects include the three-phase Sunderland Strategic Transport Corridor, which aims to connect the major centres of new development and employment. It will ensure fast connections between the city centre, the International Advanced Manufacturing Park and the Port of Sunderland, both of which were recently designated Enterprise Zones. The second phase - a £118 million road bridge across the River Wear - is approaching completion and a third phase, valued at £57 million, will begin in 2019.

Transport is a priority for redevelopment. The city's Metro system, for example, is undergoing a £337 million upgrade, the city's central railway station is scheduled for an important facelift and various development locations will be opened up by the continuing programme of road improvements.

The list goes on, but what is clear is that when it comes to promoting economic growth, the public sector is pulling out all the stops. Collectively, the combined transport and infrastructure improvements are expected to create at least 10,337 new jobs.

The Property Market

All the ingredients are in place for an outstanding property investment destination. The population is growing, the economy is thriving, and there's an impressive pipeline of inward investment that will continue well into the next decade. Employment growth is essentially certain and this will add to already buoyant demand for rental property.

Currently, that demand is not being met. Supply is based largely on outdated housing stock that often fails to meet the needs of newly arriving workers. As the inward migration of professionals and key workers continues, the market will almost certainly witness growing interest in newer properties that offer better facilities and higher standards of living. There are plans for new house-building projects, but numbers will be relatively limited and construction will mainly be taking place in outlying districts rather than close to the centre, where many employees would ideally wish to be.

Presently, there are few good properties available to let, particularly in the city centre, which is best placed to benefit from the improvements now taking place. Those units that come to the market are likely to be bought up very quickly.

Fortunately for investors, average prices in Sunderland are still well below national norms, so initial investment costs will typically be low. Given the high rental demand in Sunderland, yields will also tend to be excellent. According to Totally Money's "Top 25 Buy-to-Let Property Hotspots" for 2017/18, Sunderland sits comfortably at position number 20 in the UK rankings, promising average yields of 7.87%.

The North East is not notable for rapid capital appreciation but in the present climate, most serious property investors will be looking primarily for yield. Nevertheless, when it comes to price growth, Sunderland properties have been performing surprisingly well. In February 2018, BDaily news published figures from local sales and lettings agents that showed year on year gains of 6.4%.

Steady capital appreciation, easy affordability , rising demand and truly excellent yields; these are all good reasons why Sunderland is looking increasingly appealing to investors.

* *

To find out more about investment opportunities in Sunderland, please call our advisory team on 01244 343 355 option 4 or email sales@residential-estates.co.uk

Please click HERE for the full report

Recent years have seen a pronounced reversal of the traditional 'North South Divide' in the property investment market. By virtue of their greater affordability, many northern towns and cities have been delivering much better yields than their southern counterparts and, in numerous cases, they've shown that they've retained more room for capital growth.  It has also become increasingly evident that some of the best property investment returns stem from regions with large student populations. University cities have been topping the charts when it comes to rental yields, and many have seen big gains in average property prices, too.  Imagine those two factors as the two circles of a Venn diagram and the overlap between 'university cities' and 'northern markets' would give you some of Britain's most popular investment destinations. Manchester, Leeds and Liverpool might be some of the best known examples, but there are others, too.  One of these is Sunderland. It might be less celebrated than Manchester but it's becoming increasingly attractive to investors - and for a whole host of reasons.

In this two-part post, we'll take a look at some of the most compelling arguments why the city is worthy of serious consideration.

The Student Market

Education is big business in Sunderland. Voted the 'top student town for landlords' in 2016, Sunderland has one of the best performing education sectors in the country. It grew by 15% between 2012 and 2015 and now adds around £73 million to the city's economy. As a result, the city boasts a huge student population.

Sunderland College, which is currently developing a new city centre campus, educates over 11,000 young people on part-time and full-time courses, while the University of Sunderland attracts 19,500 students from over 100 countries. This - together with a sizeable local population of academics - naturally buoys up demand for local rented accommodation. Nevertheless, there is a continuing under-supply of good quality student properties within the area, so there are good opportunities for landlords with higher specification units to let.

Digital Industries

One of the biggest attractions to foreign students (who represent 30% of the university student body) is the growth of the digital industries. Dedicated courses are extremely popular and they are helping to fuel spectacular growth in the sector as a whole. The 2017 Tech Nation report listed Sunderland as one of the best places in the UK to develop a digital technology business. It found that, within the city, such firms support nearly 6,000 jobs and that the sector had more than doubled in size between 2011 and 2015. The Guardian newspaper recently described Sunderland as ‘one of the fastest-growing software hubs
outside London’.

The rise of a high-skill, high salary industry within the city inevitably spells good news for Sunderland's private rental sector, but the digital sector is only one example amongst many.

A Growing Economy

Numerous highly skilled sectors are now seeing rapid growth in Sunderland, and a whole raft of industries are helping to boost the local economy. What's more, with a major programme of investment now underway, economic growth looks certain to continue.

Sunderland is home to around 80 international companies, many of which are household names. Nissan is one of the biggest and best known, but there's a thriving community of other local and multinational businesses at work here - all contributing to a burgeoning economy.

According to a report by Irwin Mitchell in January 2018, Sunderland was the best-performing city economy in the North East over the third quarter of 2017. Victoria Brackett, the company's chief executive for Business Legal Services, said that Sunderland was "flying up the league table" and noted that this was due at least in part to some ambitious city planning. She said "Sunderland City Council revealed investment plans in 2015 and it is now believed that these are having a tangible effect ... with infrastructure in particular improving."

£1 billion of public and private money has already been invested in redevelopments across Sunderland, and with major employers committing to further large-scale projects, there are plenty of reasons to expect further growth.

The city's economic growth strategy is led by Sunderland’s Economic Leadership Board, whose "3, 6, 9 Vision" was launched in 2017. A £1.3 billion programme of investment, it will run for four years and will focus on big infrastructure projects. The plan aims to create 20,000 new jobs in the city and to raise economic performance by £1.8 billion per annum.

Advanced Manufacturing

A major part of this strategy is the growth of the city's advanced manufacturing sector and, in particular, the automotive industry, which supports around 30,000 jobs. The City Council notes that "In the last five years Sunderland’s automotive companies created 3,742 new jobs, invested £917 million and built two million sq.ft. of new floorspace on 88 acres of land."

Nissan is notable for having its principal European manufacturing centre here - the UK's largest ever car plant, which is the result of more than £3.7 billion of private investment. It employs approximately 6,700 workers directly, but sustains a supply chain of more than 27,000 people. Moreover, this number is certain to grow, following the company's decision to make Sunderland the focus of its electric vehicle production. This year, the company is expected to invest around £14 million to expand its current facility.

Another important employer in the area is Vantec Europe, a subsidiary of Hitachi Transport Systems, which recently opened a 40,000 square metre logistics centre. This will create 120 new jobs in addition to its existing workforce of 900. The business has invested nearly £50 million in Sunderland since 2012.

Rolls Royce is yet another well known name that has made a strong commitment to the city. It is investing over £30 million in a site in Washington in order to expand its aerospace business. The site is expected to open later this year.

International Advanced Manufacturing Park

To consolidate the city's position as a centre for high tech production, the City Council is supporting the development of its International Advanced Manufacturing Park. Work will begin in 2019. Set on a 150 hectare site, the IAMP is expected to attract around £400 million of private sector investment and to create an estimated 5,200 jobs on the site. Many more will be supported across the broader supply chain. Key industries will include the automotive sector, logistics, offshore and a range of projects involving low carbon energy.

Summary

Sunderland is clearly generating some impressive figures when it comes to job creation and economic expansion. Sectors such as higher education, digital technologies and advanced manufacturing are partly responsible for this, but so too are other growing industries such as logistics and renewable energy. The private sector is making a huge and continuing contribution to the fortunes of Sunderland, but it's only half the story.

In our next post, we'll look at how public sector spending is also helping to revitalise the city. We'll look at local demographics and at the Council's strategic investment in transport and enterprise development. For property investors, things are certainly moving in a very encouraging direction, so we'll also be examining the property market itself, where yields are some of the best in the country.

* *

To find out more about investment opportunities in Sunderland, please call our advisory team on 01244 343 355.

Over the last few years there has been a significant increase in the number of women buying property as part of a longer-term investment. Whether it is to develop houses in order to sell on for profit and move to the next property, or purchasing buy-to-let properties and becoming landlords, the rise of female property investors is going to continue. With celebrity inspiration in the form of a number of high profile female

businesswomen and property developers, as well as the positive perceptions from tenants with regards female landlords, the figures will only rise further in future.

Data released last year as part of a report into female property landlords revealed that around 40% of all landlords are now women. This is a huge increase in numbers considering that even as recent as 1970, women were being refused mortgages unless they had a male guarantor as part of the application. When you compare this with the number of small and medium business owners (just 17% of owners are women), you can see that property investment is an industry where equality is approaching at a fast pace, but why is this?

Female Inspiration

There are a few reasons why women are looking towards property investment as a way of making money. One reason is that over the course of the last decade there have been a number of positive examples and
role models in the public eye. Sarah Beeney for example is one woman who has been a success story and inspiration for women all over the country. As well as being a property expert on TV, she is also the founder of a DIY estate agent service, Tepilo. Having positive role models is important in any industry, and the numbers of female property investors could be linked to the increase in female visibility within this field.

Flexible Hours for Accidental Landlords

Figures show that more women than men have found themselves to be accidental landlords. Only 48% of women have deliberately purchased property with a view to renting it out to tenants. The figure for men is 61% in comparison. Many more women than men have rented out property that they own after purchasing a property for a family member (either a child at University who later departs, or for a parent who has then passed on). Once the profit potential is seen by the landlord, a more strategic approach can turn accidental landlords into fully fledged property investors.

Even for accidental landlords, owning a property and renting it out to tenants can be very rewarding. The flexibility of running your own property business is one where you are the boss of your time, the costs, terms of contract and everything else relating to its success. It is also something that doesn’t have to be a full time job, allowing time for other commitments such as family, work, and leisure time. These are all reasons why female investors are becoming particularly attracted by property investment as they juggle their work and family commitments.

Independence and Cash Flow

Data collected from landlords across the country seem to indicate that women think differently about property investment and how it can help them with long-term goals and financial independence. Whereas 53% of men rent property for monthly income, a higher percentage of 63% of women think in that way, rather than long-term capital growth. This steady cash flow approach provides many landlords with the chance to become self-sufficient and in control of their debts over a longer period of time.

Perceived Benefits of a Female Landlord

As part of the research, it became evident why tenants are usually happier if their landlord is a woman. There were a number of reasons why tenants indicated that they prefer a female landlord to a male:

- There is a feeling that female landlords are more sensitive to personal circumstances that can come up for anyone
- Female landlords are perceived to be much easier to talk to than male counterparts
- As far as organisation goes, women are believed to be better prepared for all eventualities
- If there is a problem with a tenant, women are believed to be much more reasonable with their approach
- As part of the search for a buy-to-let property, women take more time in choosing the right property
- Over time, and on the whole, the maintenance andappearance of a property is looked after in more detail and depth by a woman than a man

Although these might seem like broad generalisations, the perception of female landlords is positive and one that should help to push the charge of female property investors as they are more likely to receive a warmer welcome from tenants and prospective tenants.

Greater Acceptance and Inclusivity of Approach

One of the approaches of female landlords generally, when compared with male landlords, is that they are more likely to offer accommodation for rental purposes to a diverse range of tenants. 35% compared
to 25% of men would rent property to recipients of housing benefit for example. You are also more likely to find tenants of women to be students, pensioners or single tenants. This acceptance of a wider and more diverse set of tenants does bring with it extra caution in case of potential damage by tenants, but overall should be deemed a positive contribution to the industry.

Residential Estates has built a team of experts on a wide range of topics relating to property investment, regardless of our clients gender. We are able to offer you extensive guidance and advice on your personal
situation, ensuring that you have all of the relevant economic, location and industry information that helps you make the right decision for you.

To find out more about our service and for information from our property investment experts, you can speak to us through a number of simple means. You can either call us on 01244 343 355 or email sales@residential-estates.co.uk and a member of our team will be happy to consult with you and arrange a meeting at your convenience. 

On 18th April 2018, the Office for National Statistics announced that UK inflation had fallen to its lowest rate in a year. It fell from 2.7% in February to 2.5% in March.  On the face of it, that sounds like good news, except when you consider how the rate of inflation stacks up against the interest rates that most British savers are achieving. The cost of living is rising at 2.5% per annum, while money in the bank is typically earning far less than that. In short, most savers are effectively losing money.

This week, Moneysavingexpert.com lists three 'best buys' for easy access savings accounts, and not one of them exceeded 1.25%.  When it comes to savings bonds, the best of its top picks came in at 2.3%, and
that requires tying up one's cash for at least three years.

ISAs look no more attractive. According to the same organisation, the best easy access account offers just 1.3%, while savers who are prepared to lock up their money for three years on a fixed rate can earn a not-so-heady 1.87%. As Martin Lewis notes: "The top savings account interest rates have started creeping up following November's base rate rise, but many are still dismal."

Some current accounts do, admittedly, offer higher rates, but they tend to apply to only very limited amounts. Tesco, for example, offers 3% on current balance up to £3,000. Nationwide offers even more, but only on balances of up to £2,500 and only for a maximum of 12 months. For those with more to invest, the conventional savings route offers very poor returns indeed.

The case for investment:

Savers, of course, have not been blind to the woeful returns their money is making. Banks and building societies make their profits by investing their customers' money and earning better returns than the interest rates they pay out. That has always been true, but seldom have savers got such a raw deal.

Recognising that money in most savings accounts will inevitably lose value over time, many ordinary savers are making the decision to do something else with it. The obvious question is what? There are many investment paths to consider, and their appeal depends on a mix of factors, including personal circumstances, age and attitude towards risk.

Stocks and shares:

Canny investors have certainly been able to make money on the stock market in recent years, despite the economic uncertainty associated with Brexit, a minority government and the growing prospect of import tariffs and other barriers to international trade. However, returns vary massively.

'Playing safe' has sometimes been associated with building balanced portfolios, perhaps with an emphasis on established blue chip businesses. Many investment houses promote investment trusts that prioritise shares in FTSE 100 firms. However, as brokers so often point out, there can be a trade-off between risk and reward.  Playing safe might be the preferred option for many, but the returns are not always going to be impressive.

On 20th April, investment website The Motley Fool noted: "Overall, FTSE 100 stocks are now forecast to pay out a total of £87.5bn in dividends this year, at a yield of 4.4%."

That's ahead of inflation, certainly, and investors with large sums available might be pleased to achieve that. It's undoubtedly a better return than the sub-inflation rewards offered by most savings accounts. However , while it's certainly possible to achieve even higher returns, the risks tend to grow at a corresponding rate. Amongst families and individuals who may be considering where to entrust their lifetime savings, "higher risk" is not a phrase that many will want to hear.

Risk is inevitable in any investment but stocks and shares can be particularly vulnerable. Even businesses that appear utterly reliable can suddenly lose considerable value. Facebook's recent entanglement with Cambridge Analytica affords a good example, as does Volkswagen, which suffered a similar knock just a couple of years ago.

Today, with heightened international tensions and fears of a new cold war, together with growing protectionism on the parts of major players such as China and the United States, few will be predicting plain
sailing for most investors in the years ahead. And that's to say nothing about Britain's own difficulties over Brexit. Investing in stocks and shares still has its attractions, of course, and it will remain the favourite vehicle for some, but it is by no means a sure-fire win.

Property:

It will come as no surprise that we, at Residential Estates, favour property as an investment vehicle. However, our partiality shouldn't undermine the strength of the arguments that support it. We are in this business for a reason. Property investment has an excellent track record.

Let's look again at the yield that investors in FTSE 100 stocks are expected to earn this year. 4.4% is a healthy enough figure, and it stems from what can probably be regarded as a reasonably safe bet, underpinned by the reputations and solidity of the companies in question. But it's only 4.4.%.

Perhaps the most commonly regarded figure in property investment is capital appreciation, and expert opinions differ on how much property values are likely to rise over the course of this year. In December, for example, Halifax suggested that average prices could rise by up to 3% over the course of 2018. Earlier this month, Strutt & Parker predicted a rise of 2.5%, while Price Waterhouse Coopers (PwC) forecasts a rise of 4%. Knight Frank and Savills both predicted a more modest 1% growth in the market.

However, a focus on average price growth is misleading. Just as investments in shares must be carefully chosen and all the risks weighed, the same is true of property investments. Prices vary enormously by location - right down to level of streets and neighbourhoods - so any national averages are going to be so generalised as to be meaningless.

Think local:

In previous posts, we have emphasised the importance of focusing on particular growth markets. We've highlighted Manchester, Birmingham and Chester as three good examples, but there are others.

Making good choices at this stage is vital when it comes to the question of capital appreciation, as Hometrack director, Richard Donnell points out. He notes: "...large regional cities could register price rises of up to 25% over the next two to three years. The likes of Manchester, Birmingham and Glasgow have seen market activity increase and this has delivered above-average price growth of 6% to 8% for the last 12 months."

Location, then, is key to earning good capital returns - returns which, alone, could substantially outperform the collective results expected from the FTSE 100. But capital appreciation is only half the story. Just as shares have intrinsic value and pay out dividends, so property offers capital appreciation and a regular monthly yield.

At a time when average house price growth is expected only to be modest, rental yields are the figures on which many serious investors are focusing. Property investment is a long term business and for those who intend to keep their interest in bricks and mortar, it's the day to day rental performance that makes a property investment pay.

Again, location is the key. In certain markets - such as Manchester, the Midlands and Chester - investors are securing properties that promise yields of between 5% and 8%, and that's on top of any price growth achieved by the property itself.

All told, the combined benefits of capital growth and rental yields make property one of the most attractive asset classes currently available to investors. Not only are the returns often very good, but rental demand is exceptionally high across the UK - and likely to remain so for many years to come. The private rental sector doubled in size over the course of the last decade, and Knight Frank predicts that it will grow a further 24% between 2018 and 2021.

What's more, with the support of a rental management agency, property can be made a true armchair investment; one that does not require frequent trading or constant monitoring of the market.

The buy-to-let market became more challenging in 2017 with the advent of various new tax hikes, but it remains one of the most popular forms of investment in Britain today. In December, The Economist observed: "These days one in 30 adults - and around one in four MPs - is a landlord. Roughly a third of them are retired, many having turned to the housing market as the returns on their savings dwindled."

Property investment therefore stands as an option that still stands up to scrutiny.  Historically, it has performed well; it's no accident that property is often one of the most popular asset classes for institutional investors, featuring in major pension funds and the like. Returns vary by location but a well-chosen property should certainly outperform even the best high street savings accounts as well as the majority of options on the stock market.

If you're considering an investment and you'd like some free, expert professional advice, please call our customer support team on 01244 343 355 option 4, or email sales@residential-estates.co.uk or visit our contact page here

In recent weeks, much of our editorial focus has been on the big growth markets of the North West, but it's important not to overlook another of the UK's property success stories: the West Midlands. Here - and especially in Birmingham - property investors can find some excellent trend-busting deals.

Strong Average Values

The Midlands as a whole appears to have weathered the economic storm very well. Although many parts of the UK have seen average prices slow, values in the East and West Midlands have continued to make solid gains. This was noted in LendInvest's Buy-to-Let Index Report for March 2018, which noted that "The Midlands has shown itself to be wholly resilient to the house price growth slowdown, with cities Birmingham, Northampton and Leicester (all) landing a place in our LendInvest BTL Index Top 5 this quarter."

To put that in context, the report noted that many parts of the South East had seen dramatic falls in the average rate of growth over the past six months. Dartford, for example, saw a negative change of 66%, and East London saw the rate fall by 48%. (Note that these are changes in the rate of growth, not absolute values.) By contrast, Birmingham came second in the league table of those areas least affected by a deceleration in price growth. Here, rather than a fall, Birmingham achieved a positive change of +35% - a rate only bettered by Truro in the South West.

Yields and Rental Growth

Of course, property investors do not judge success purely in terms of capital gains. For many, the principal measure is that of yield - essentially, how hard one's investment money is working. In this respect, the West Midlands again produce good results, with Birmingham coming in at number 5 in LendInvest's list of 'Top 10 buy-to-let postcodes.' Of all the listed destinations, only Manchester exceeded Birmingham's average yields of 4.6%. The same report found that Birmingham delivered average capital gains of 6.7% and rental price growth of 3.91% - both comfortably ahead of national averages. Indeed, for rental price
growth, Birmingham ranks seventh in the whole country.

In short, Birmingham is performing well on all key measures. 

The obvious question is: why?

Inward Investment and Regeneration

Like other investment hotspots such as Manchester and Liverpool, Birmingham is attracting a large amount of investment from both the public and private sectors.

Major new transport projects include New Street Gateway, the city centre Metro and Birmingham Airport, all of which will enhance Birmingham's appeal as a central, well-connected base for internationally minded businesses. Additionally, the city will benefit from HS2 rail links, which will put London just 49 minutes away by train, rather than the 1 hour 22 minutes it takes at present.

HS2 has also kick-started other important regeneration works, including a £600 million renovation scheme at Birmingham New Street station, which was completed in 2015. HS2 is also at the heart of the £900 million Curzon Investment Plan, which will regenerate the area surrounding a proposed new Curzon Street station.

However, Birmingham's renaissance is not only about transport infrastructure. Birmingham City Council's Birmingham Development Plan (BDP) 2031 sets out an ambitious programme for construction and economic growth that will see the creation of large amounts of modern retail and office space. This will complement a raft of other schemes already underway.

New and ongoing projects in 2018 include:
 
1 Centenary Square. This impressive ten-storey office will shortly become home to 4,000 HSBC UK staff, following the bank's decision to relocate its retail and business operations to Birmingham. A £200 million
project, it will help to underscore the city's credentials as an emerging financial powerhouse. Other companies that have recently moved into the area include Barclays, Deutsche Bank and RBS.
 
Arena Central. This is the broader 3.7 hectare site on which 1 Centenary Square sits. It is also occupied by a Holiday Inn Express, which opened in 2017, and it will soon feature a further four residential and office developments.

Paradise Project. This £700 million development project will see the construction of an array of new office properties, the first of which - One Chamberlain Square - is scheduled to open in the summer 2019. An agreement has already been reached under which the accountancy firm PwC will take all the property's office space.

A sister property - Two Chamberlain Square - is also scheduled for completion the same year. Regarded as one of the UK's most important urban regeneration schemes, Paradise will ultimately deliver offices, shops, bars, cafés, restaurants and a new hotel.
 
Axis Square. Plans for this office development were announced in 2017. They include the construction of four office blocks in two phases, together with new shops, restaurants and a proposed new public square.

Besides these, Birmingham will also witness the opening of a new £45 million hotel and the launch of many other projects including the new Primark Pavilions retail regeneration scheme, and a £450 million canal-side redevelopment project, which will create a wide array of hospitality, retail and leisure facilities.

Such large scale investment by both businesses and public bodies is sure to have a profound effect on the local economy and, thus, the growth of local employment. As more workers are drawn to the area by the promise of jobs, demand for good rental accommodation is likely to soar.

Population and Affordability:

Property demand is already benefiting from a growth in population and jobs. The economy is growing faster than the UK national average and, in the twelve months to June 2017, employment in the city rose by a massive 110,000 - the largest regional rise anywhere in Britain. Moreover, the city council expects Birmingham's population to rise by 150,000 between now and 2031, which will raise demand for property still further.

Birmingham has an unusually young population and it is also boasts the UK’s second largest student body. The number of students living here continues to grow and, given the relatively low cost of living, this is a trend likely to continue well into the next decade.

A low cost of living extends to rental and property prices, too. Although average values are rising far more quickly than the national average, that's at least partly because they are starting from a lower base and, thus, they have more room to rise. According to the Office for National Statistics, the average house price in the West Midlands was around £191,000 in December 2017, compared against £484,000 in London.

Rightmove's figures for March 2018 differ but they show the same stark imbalance: average prices in the West Midlands stand at just under £220,000 while prices in London are closer to £632,000.

Following the same pattern, average rentals are much more affordable in Birmingham and its surrounding region. According to HomeLet, average rents stood at £674 inJanuary 2018, while in London, they were £1532.

Birmingham is therefore becoming a magnet for workers, students and others looking for a more affordable lifestyle. For the same economic reasons, the city promises investors healthy demand and equally healthy yields.

The Emerging Trends in Real Estate 2017 report named Birmingham as one of Europe’s most attractive investment destinations and the single most promising property market in the whole of the UK. In a similar vein, professional services firm Ernst & Young recently predicted that, outside of London and the South East, the West Midlands would be "the fastest growing region of the UK leading up to 2020, with growth underpinned by strong performance in the real estate and business services sectors."

As the focus for massive new investment programmes and a steadily rising population, Birmingham represents an opportunity that buy-to-let investors should seriously consider.

**

To find out more about investment opportunities in Birmingham such as our latest launch in Digbeth, please call our advisory team on 01244 343 355 option 4 or email sales@residential-estates.co.uk 

At Residential Estates we have developed a service that caters for a wide and varied audience. We understand that for each client there is a specific set of requirements and circumstances that have led to them

seeking the use of serviced apartments in the UK.

One set of customers that come to us with a very specific set of requirements is that of overseas travellers and workers visiting the UK.  Our service has been used by people travelling here to work on short-term
contracts from places as varied as the USA, China, India, the Middle East and many other parts of the world.

With many different cultures, characters, needs and desires, we have to ensure that our serviced apartments cover the bases and tick all the boxes for our visitors here on a short-term working contract.

Cost Effective Solution for Short-term Working Contracts

Our serviced apartments offer a cost effective solution to those clients coming to the UK to work from overseas. When it comes to very short-term stays, say a weekend or a few weeks, staying in a serviced apartment can cost as much as a stay in a hotel. Once you look at slightly longer stays (our clients are usually signing up for between 1 and 6-months) the price savings start to appear, often up to 30% in savings when compared with the price of a hotel.

Once you factor in the home comforts and flexibility, it really is a benefit for overseas visitors relocating to the UK for work to use serviced apartments. There is also a misconception that serviced apartments are
used mainly by millennials, but we have found over the years of our service developing, that our clients range widely in age, occupation and location, with an apartment a much more attractive option for senior management and directors of companies, professional contractors, digital nomads, recent graduates and students, as well as choosing where a visiting client will stay when visiting a company to conduct business.

Flexible Serviced Apartments to Suit All Types of Tenants

So why is it that such a variety of professionals are choosing to stay in a serviced apartment when visiting from abroad? The main benefit to most is that it offers ultimate flexibility without compromising on the high quality of service and luxury that they would expect from a hotel.

Staying in an apartment means that you can live and work on your own time and scheduling. You can choose to eat dinner when you want, either cooking or ordering in a takeaway, or venturing out to the many
restaurants close by. If a meeting overruns or a flight is delayed, there’s no need to be worried about making a set time at a hotel when you have an apartment of your own to stay in. It is a home away from home. Our apartments are carefully chosen to cater for those looking for a city centre lifestyle, close to amenities and public transport networks, we can offer apartments with or without parking spaces depending on the specific requirements of each client, as well as offering living space that is suitable for single living, young professionals, as well as families.

Quality Locations

When we are choosing new apartments we take into consideration many different factors that will appeal to short term visitors. They are always close to all the local amenities you would require for a short to medium-term stay in a town or city. Always within walking distance of public transport hubs for easy use for business purposes, as well as areas which are more likely to be used for visiting businesspersons and overseas workers, such as conference centres, Universities, and Hospitals, our serviced apartments will offer a range of local bars, cafés and restaurants to help with the social side of life during an occupants downtime.

It is always important to us that everything that could possibly be needed is within walking distance of the apartment, or at least easy to use public transport is within an easy walking distance. Travelling from abroad to work in the UK offers many different challenges and potential obstacles, including language, culture, the weather, food and much more. The easier that a framework is created to live and be comfortable within, the better the overall experience for the visitor.

A Combination of Leisure and Business

With such flexibility an overseas worker can quickly ease into life in the UK, and a serviced apartment offers the chance to create a seamless combination of leisure and business. It makes much more sense to many overseas visitors to remain connected with the local culture when working in a location for a period of time. Quite often, staying in a hotel can feel like a dislocating experience, with no real connection to the surroundings. By staying in a serviced apartment it is the closest feeling to living at home whilst working abroad. For an overseas visitor working in the UK, this can make a real difference to the overall experience of his or her stay.

Travelling to a foreign country to work can be stressful and daunting. Whether an individual is working in the UK for one month, or for many months, our serviced apartments are designed to help overseas workers settle as quickly as possible in a new location and it is a trend that is only going to rise with the World shrinking in terms of global trade.

Short-Term Serviced Apartments Through Residential Estates

Our offering is built around a bespoke service that caters for our customers every need. Whether customers have arranged a serviced apartment with us, or have been placed through their workplace, we will
endeavour to deliver a consistent and high quality service for the duration of their stay. This therefore offers opportunities for investors too as this is a market that will grow and grow. When a property sector is buoyant and this is combined with low entrance fees to the market, the ability to make significant profits are real.

If you would like to find out more information regarding our serviced apartments in a variety of locations and future investments in this attractive property sector, contact our office today on 01244 343 355 or email us at sales@residential-estates.co.uk and our friendly staff will be happy to offer advice and guidance.

As a traveller from overseas, you’ll have many unique requirements compared to a UK traveller. At Residential Estates we understand this, as many of our guests are from across the world, from many amazing cultures, such as India, China, USA. Our aim is to ensure that you feel at home in one of our luxury serviced apartments.  Every serviced apartment from Residential Estates, is positioned within walking distance of the local amenities ensuring you’ll always be within easy reach of bars, restaurants and shops as well as public transport. We know the challenge isn’t just a new area or town but a whole new country, culture and possibly language too, that’s why our apartments are situated in prime locations. You can get everything you need on foot, so keeping everything easy for your needs.

Serviced apartments offer arguably the most attractive accommodation option for business travellers relocating overseas. For short stays, the average serviced apartment costs roughly the same as a hotel per night; but for visits longer than 28 nights, there’s savings of up to 30% to be had. More space, greater privacy and increased flexibility for cooking and conducting meetings mean serviced apartments are also more commodious than hotels.

Our serviced apartments have a lounge, dining area, fully equipped kitchen, bedroom and stylish bathroom – as well as free digital TV and fast, secure, internet access included in the cost - allowing you all to live comfortably and stay connected to home, throughout the duration of your stay. We understand that being connected to home is as important as feeling as though you are at home, in one of our serviced apartments you will feel just this.

A few things you may wish to do or consider:

Familiarise yourself with the local supermarkets

Unlike hotels, business travellers have the means to cook up fancy food from the comfort of their apartment using the modern kitchen facilities provided. Electric hobs, ovens and microwaves allow for both meals in minutes, or gourmet dinners if you have the time.
So, take advantage – stock up your cupboards with local produce and explore the flavours of a new country in your own style!

How essential is parking?

Taking your car on a business trip, or hiring one abroad? If so, so you’ll need an apartment with parking facilities. Free on-site parking is the ideal scenario, but in some instances, you may have to pay an additional charge.  We have apartments that suit having a car and not having a car, be sure to mention this when booking.

Choose accommodation in walking distance of public transport

Save yourself the hassle of trekking about a new city like a headless chicken by opting for apartments close to local bus stops and train stations.  Our serviced apartments are fantastic for public transport,located within walking distance making your day as easy as possible!

But what if I’m bringing my family?

Serviced apartments tend to be very flexible when it comes to families. Self-catering presents the best possible solution for fussy eaters, while free Wi-Fi and flat screen TVs, ensure children are kept entertained for hours.  For those with toddlers, cots can also be provided. Relocation needn’t be a stressful process and selecting the right serviced apartments as you transition homes can be key.

Travelling from overseas for work needn’t be a stressful task or a daunting prospect, costs don’t need to stack up, so you feel like your living to a budget. With Residential Estates, you will feel at ease from your enquiry to the day you depart. Whether it’s yourself or your workplace that arrange your stay all your needs will be catered for whilst you’re here with us in the UK.

A long way from home, stay home from home, choose serviced accommodation.

Canal street was first developed in 1804 when the Rochdale Canal was first constructed, it was a major motorway of it’s time. This was the first canal to run right from the Pennines bringing raw materials into the city for them to be turned into final products ready for carrying to Liverpool, from there they would be distributed to all corners of the British Isles. This was quite the industrial area until the cotton trade saw a decline in the early 20th century, as the industry took a downfall the warehouses fell silent and empty. The area then at the time became a very dark and unvisited place, this then drew in gay men. With street lights unlit and narrow back streets men could meet to have relations in a time when it was frowned upon.

In the 1980’s Canal Street found itself fighting some tough relations with the police, even after the 1967 legislation of homosexuality. Still only people over the age of 21 were legally allowed to express emotions and only in private. The police would trawl the canals and the streets with flash lights looking for gay men, if they were discovered they would be exposed. The gay community were forced to go to bars where you could not see out and neither could anybody see in, they would be kept hidden away from the public eye.

The 1990’s brought a shed of light and hope for the gay community, following the council working toward lesbian and gay rights in the late 1980’s. Sackville Street Gardens were purchased, and Manchester became the first UK council to support civil partnerships. These were huge progressions to lead Canal Street into the 90’s. Manto opened in 1991, a proud gay bar. A gay bar that refused to hide anyone or for anyone to feel hidden anymore, they had large front windows so passers by could see in, no longer would they be invisible.

Over the next decade, more bars began to open along the Canal, each time the bar getting bigger and filled with even more pride. The street then gradually became the most successful gay village in Europe. Canal Street was home to TV shows such as Bob and Rose and Queer as Folk. The gay community began to thrive, and many visitors came to Canal Street.

As you walk the surrounding streets that lead to Canal Street you will see the trail of colorful flag stones beneath your feet, upon the walls of the street you will see big, bright statement wall art. To just alone walk the streets, you can gain a sense of the history and the passion that the community has put into the gay village. The community protect their environment as it is home to many businesses, residents and punters that have strived to make the street the vibrant gay village it is today.

The Gay Village is in the heart of Manchester City Centre and a stone’s throw from Manchester Piccadilly train station. It’s a vibrant street which is fully pedestrianized and is lined with bars and restaurants, attracting gay, lesbian, trans, bisexual and heterosexual’s. The gay village is an area full of pride, over years status has been fought for and has been deservedly awarded. This is celebrated annually with Manchester Pride, Sparkle Weekend, Bear Bash, just to name a few. The street is lit up and on weekends and weekdays of summer months the streets are lined with people, relaxing, celebrating and embracing life as themselves.

Canal Street, the Gay Village, a passionate community.

In the first part of this article, we gave some economists' views of the impacts of Brexit to date. In this second and concluding part, we look at some of the economic factors that will affect prospects for investors, and at recent figures that suggest a fast-improving global picture.

Brexit and Consumer Confidence

Feeling financially comfortable is important. The extent to which people feel secure can have a marked bearing on property price trends, and that's one of the reasons why Brexit's effects are so important to investors. However, there are many different factors at work here, and not all of them are pushing the same way.

It would be hard to argue that Brexit hasn't had a damaging effect on most people's real-terms wealth. Some estimates suggest that it has already cost the average worker the equivalent of a week's wages. Partly, this has come from rising inflation, much of which is directly attributable to the post-referendum fall in the value of Sterling. As the Pound lost value against foreign currencies, so imports became more expensive for British businesses and thus, average prices rose. Moreover, prices have tended to rise faster than the average rate of wage growth so, typically, workers and families are feeling poorer.

The FT reports recent findings by the London School of Economics that "with the pound falling about 10% following the June 2016 result, inflation has risen more in Britain than in other advanced economies... The LSE study estimates that the Brexit vote directly increased inflation by 1.7 percentage points of the 2.7% rise in the 12 months after the referendum. And with wage inflation stuck at just over 2%, the increase in inflation caused by the Leave vote has already hurt UK households."

Exchange Rates - Pros and Cons

However, the exchange rate is an ever-changing figure and one cannot suppose that the Pound's value will stay low forever. True, it collapsed dramatically after the referendum, but it has been on an upward trend since the first quarter of 2017.  It might be reasonable to suppose that it will climb further once the uncertainty of Brexit negotiations has passed.

For now, no one is expecting Sterling to follow a smooth or predictable path. At the time of writing, the Pound had made impressive gains in recent weeks, but it fell sharply on 31st January. This was the result of a report published by Reuters, saying that the European Commission had rejected a proposal from the City of London regarding a free trade deal on financial services. The prospect of trade barriers in a sector so critical to Britain's economy led to a fall in values against both the Euro and the Dollar.

We can expect some degree of volatility in values between now and March next year but it's important to remember that the world economy is recovering strongly. This is tending to buoy up the British economy, which is now faring better than many economists feared. Against this background, trade is likely to pick up and there is no reason why the Pound shouldn't make a gradual recovery.

In the meantime, there are some advantages to a poor exchange rate. Firstly, British exporters are benefiting because their goods and services are now effectively cheaper to overseas buyers. Secondly, the same is true of those selling or renting British property to foreign nationals. In the wake of the Brexit vote and the consequent fall in Sterling, many foreign investors were quick to invest in British property. Since then, investors with interests in student property have also seen rising demand on the part of overseas students, for whom an education in Britain suddenly became much more financially attractive.

Inflation and Interest Rates

The value of Sterling, and the consequent rate of inflation are important to investors. Firstly, as noted earlier, inflation has an effect on consumer sentiment. Secondly, the Bank of England has a remit to keep inflation in check and one of its principal tools is the ability to manipulate interest rates.

If inflation rises too quickly - which is a threat here as it is in many other countries - then the Bank's Monetary Policy Committee will feel increasing pressure to raise interest rates again. It has previously signalled that interest rates will rise, albeit at a slow and gradual pace, but higher rates of inflation, and/or unexpectedly strong economic growth could see these rises materialising sooner rather than later. Higher interest rates would have an inevitable knock-on effect on the cost of BTL mortgages and, potentially, the profitability of certain property investments.

However, the current signs aren't especially worrying. Inflation reached a six-year high in November 2017 but the rate has fallen since then. According to a BBC report on 16th January, "The Bank of England has said it thinks inflation peaked at the end of 2017 and will fall back to its target of 2% this year."  Moreover, the British economy is certainly in no imminent danger ofoverheating. Taking both those factors into account, it's probably fair to say that investors need not worry about any large or sudden hike in interest rates.

Summary

Thus far, the prospect of Brexit has had some damaging effects upon the UK economy, perhaps to the tune of around 1% of GDP. It has also pushed up prices, so consumers and house-buyers are feeling the pinch. A poorer exchange rate has led to higher inflation, which has added to the pressure on interest rates. However, none of these effects are devastating, and nor will they last forever. Whatever one's views on Brexit, Britain's departure from Europe is unquestionably coming, and the roles of government and business leaders are now to make the most of the opportunities ahead. As negotiations progress, so we will see an end to much of the recent economic uncertainty and, in that respect, the conditions for investment must improve.

In any event, one must also take account of a strongly recovering global economy. In January 2018, the World Bank revised it growth forecast upwards, saying it expects: "global economic growth to edge up to 3.1% in 2018 after a much stronger-than-expected 2017, as the recovery in investment, manufacturing, and trade continues."

In November, Goldman Sachs had expressed a similar sentiment, saying: "For the first time since 2010, the world economy is outperforming most predictions." It predicted "4% GDP growth next year, supported by still-easy financial conditions and fiscal policy.... The strength in global growth is broad-based across most advanced and emerging economies." In January, the IMF projected a similar figure, saying: "Global growth forecasts for 2018 and 2019 have been revised upward by 0.2 percentage point to 3.9%. The revision reflects increased global growth momentum."

Whether or not it's true that British GDP has dropped 0.9% as a result of Brexit, this figure could be more than counteracted by natural economic growth. In or out of the EU, Britain will remain a part of the world community. Trade will continue and the rising fortunes of other countries should soon percolate down to our own economy. In other words, there are credible grounds for optimism.

And besides all that course, there are the domestic forces that, regardless of Brexit, will continue to provide property investors with a firm foundation. Demand for housing still far exceeds supply, employment rates are high and yields remain broadly good, provided that one makes sensible choices about property type and location. What's more, properties remain unaffordable for many buyers, so the private rental sector still stands as the only practical option for millions.

For all these reasons and more, UK property looks set to remain a robust and resilient vehicle for investors during the years ahead. Intelligent, informed choices will be required in order to earn the best returns but in certain parts of the North West, the Midlands and elsewhere, there will continue to be some excellent opportunities.

* *

https://www.standard.co.uk/news/politics/brexit-la...

https://www.theguardian.com/politics/2018/jan/30/b...

https://www.theguardian.com/politics/2018/jan/31/b...

https://www.ft.com/content/e3b29230-db5f-11e7-a039...

Serviced Accommodation, Perfect for Business Travel….

For an outsider looking in, business travel sounds luxurious and exciting, until you actually find yourself in that situation. Business travelers find themselves living out of suitcases, living in impersonal hotels and feeling lonely. The hotel will never meet their needs as there is always something to pick at, simply because it is not home, and they do not feel that sense of settled.

Business travelers are constantly having to compromise on the luxury of home and it then quickly takes its toll. This is where serviced accommodation comes in, the travel and place to stay needn’t become the lesser of two evils and the burden to the job. Having a great serviced apartment to stay in then becomes something to look forward to at the end of a busy day, their own home from home in the heart of a great location.

I’m sure every business traveler has been in these frustrating situations, they have had work to continue with and they try and assume that awkward position, knees bent sat on their bed as they precariously  balance the lap top on them. Deciding whether to go it alone in the hotel restaurant or to spend another night in their room with room service, this then sending the thoughts back to what you would have eaten if you’d have been at home. Trapped in the same small space where the bedroom becomes the living room, the kitchen and the study, with no option to switch off, in a short time the hotel business traveler is  frustrated and stressed.

Instead, a serviced apartment offers a whole world of space for the same or less of the price tag of a stay per night. An apartment allows the business traveler to complete their work with high speed internet at a desk, once complete they can move into the lounge and relax whilst watching the television. Serviced apartments leave the city at their fingertips during the evening, so meal time becomes an enjoyable part of the
day. Now there is the choice of a stroll out, cook one of their home favorites or just simply beans on toast after an exhausting day, the apartments fully equipped kitchen can cater for every need. All before retreating to a home from home bedroom where they can relax in comfort ready for the next day.

Serviced apartments are crucial for creating a perfect work life balance, to find yourself living, breathing and working in the same environment can be very counterproductive to your work performance with negative impacts on the business and will also have a detrimental impact on your wellbeing. Serviced accommodation allows the space to be able to segregate work and play. When you can relax around your own
apartment listening to your favorite music, watching your favorite films, unwinding with a glass of wine whilst dinner cooks, business travel appears more sustainable and a lot less like a chore.

Serviced accommodation, not only more cost effective for the business traveler but a home from home.

To find out more please visit our Serviced Accommodation page here, or call our experienced team on 01244 343 355.

Brexit is a fraught political issue and it's difficult to make statements about its impact without them being interpreted as some kind of political statement. Nevertheless, Brexit is undoubtedly the single biggest issue affecting the near-term economic future of Britain and, as such, it is bound to have a significant impact on the private property/rental/investment sector. It is not an issue that can sensibly be ignored.

In this two-part article, we'll therefore try to separate the economic data from the political spin by examining views and research published by various independent bodies.  In this way, we'll try to give some sense of what it all means in practice for investors.

Property and the Economy

As a broad rule of thumb, property prices in recent decades have tended to rise in parallel with average earnings. When ordinary Britons feel financially secure, consumer confidence rises, people feel more ready to buy new homes, and tenants feel more able to pay higher rentals. In short, a growing economy is good news for property investors.

Of course, the usual caveats apply: a healthy economy will not affect all regions equally.  Capital values and rental growth will always vary between counties, towns and neighbourhoods. But this is not to dismiss the importance of the prevailing economic climate; it does inevitably affect consumer sentiment and this, in turn, can have a significant effect on market conditions in general.

Brexit is Coming

According to Theresa May's current plan, Britain will leave the EU on 29th March 2019. Negotiations are still in progress but the latest feedback from Westminster, the media and the continent appears to suggest that the country will then enter a transitional period, during which it will continue to abide by EU rules (including those relating to market access.) The length of this transition under a 'Norway-style' arrangement has not been determined but many commentators are expecting it to last around two years.
It is, of course, impossible to predict what will happen at this point, and at any future point that Britain leaves the EU entirely. However, there should be at least one undeniably positive outcome, which will be a  eduction in economic uncertainty.

At present, business investment is being hit hard by the uncertainty surrounding Britain's future relationship with the EU and trade with the rest of the world. Economists can argue the current and future impacts of that, but as negotiations progress, so that uncertainty must lessen. That will give businesses a firmer foundation for their plans and that, in turn, should see renewed investment to fuel growth and new employment.

In January, the Chancellor of the Exchequer, Philip Hammond expressed a similar sentiment, saying: "Because of the negotiations that are going on, there's a degree of uncertainty about our future direction and our future arrangements for trading with our European partners... That's bound to have an impact on thinking about the economy. The sooner we can generate certainty, the better, and that's why we are keen to build on the momentum that we generated in December; to get the negotiations moving forward in a steady way so that we can see real progress over the course of the coming months."

In some respects, it's arguable that Britain is at its lowest point in terms of uncertainty. It has, beyond any doubt, damaged growth and investment, and it has seen some important employers take flight to France, Germany and other faster-growing economies. But this situation will not last indefinitely; over the coming months, trading terms will be agreed and - for better or for worse - businesses will have a much clearer idea of where they stand.

The Economic Impact to Date

The future will always remain unclear but now, one and a half years after the Brexit vote, we can begin to see what the impact has already been. To do that, let's consider some independent views and reports.

The International Monetary Fund regards the prospect of Brexit as a force that, on balance, will tend to slow Britain's economic growth. On 22nd January, it reduced the UK's growth forecast for 2019 from 1.6% to 1.5%. This prediction comes at a time when the global economy is widely regarded to be recovering well. The intergovernmental organisation OECD has a similar outlook, referring to "the ongoing slowdown in the economy induced by Brexit."

In December 2017, the FT published a lengthy report on the impacts of Brexit, noting that "with 15 months of detailed UK data, it is now possible to begin to answer that important question... Economists for Brexit, a forecasting group, predicted that, after a 'leave' vote, growth in GDP would expand 2.7% in 2017. The Treasury expected a mild recession. Neither proved correct. The 2017 growth rate appears likely to slow to 1.5% at a time when the global economy is strengthening."

The report goes on to estimate, based on figures from various sources, that Britain's economy is now 0.9% worse off than it would have been had the country chosen to stay in the EU. Referring to the infamous campaign claim that a 'leave' vote could free funds to better fund the NHS, the FT adds: "That (0.9% reduction) equates to almost exactly £350 million a week lost to the British economy; an irony that will not be lost on those who may have backed Leave because of the claim made on the side of the bus."

This estimate is echoed by Jonathan Portes, Professor of Economics and Public Policy at King's College London. In December 2017, he said: "The conclusion - that, very roughly, Brexit has already reduced UK growth by 1% or slightly less - seems clear."

It isn't hard to find evidence to support these views, but as Julian Jessop, Head of the Brexit Unit at the Institute of Economic Affairs explains, the more important question is not how things currently stand but where they are going. Speaking in December, he said: "Lots of sensible Brexiters accept there will be a short-term hit, and it is unarguable that the economy is weaker than it would have been... between 0.5% and 1% weaker. As for the longer term, it’s all to play for. Brexit creates lots of opportunities; it is for the government to make the most of them."

In our next post, we'll look in more detail at some of the key economic factors affected by Brexit - exchange rates, inflation, interest rates etc.- and, with the world economy recovering strongly, we'll consider some important new grounds for optimism.

If you have any concerns over Brexit and the future for investing please feel free to contact one of our consultants on 01244 343 355 or email sales@residential-estates.co.uk

No sooner is one school holiday out of the way and the next one is already on the horizon.  As parents search the web for the perfect mini break for them and their little ones, taking a city break is sometimes overlooked.  Not entirely surprising with all the outgoings of parents – booking hotel rooms can be expensive for everyone, then there is finding a room big enough to squeeze in the whole brood. B&B’s then appeal as more affordable, but then tying you down to those set breakfast times when your 4-year-old is shouting for breakfast at 6am, but your teenager is still comatosed in bed!  Whilst trying to please all ages in the family the restaurant bills are piling up and for you, the parent, this relaxing break is becoming more of a stress haven by the minute!

However, fear not travel loving parents as serviced accommodation is here to give all your family the relaxing break you need.

Serviced apartments come in a range of shapes and sizes, one, two even three bedrooms.  Meaning each member of the family has their own area, then the open space lounges and kitchens offer a homely
space where you can all relax together. 

Unlike hotel rooms where you are all on top of each other using the bed as a seat or as a get out the way escape gap so your youngest can hurtle past whilst mums trying to dry her hair in front of the mirror and dads trying to see the football score on the telly!  Serviced apartments come with TV, open spaces, fully equipped kitchens, hairdryers, WIFI and much much more but also most importantly enough space for everyone.  With children loving their familiarities of life having this in an unfamiliar place is ticking off a huge bonus box when choosing where to book. In serviced accommodation this box can be ticked, you can cook their favorite breakfast at the time they want it and after a busy day bath and bed time can be kept the same, so you can finally sit back and relax and have your time. Costs don’t need to soar through the roof when you have your own fully fitted and equipped kitchen throughout your stay.

Now many of you are thinking but hold on a minute we love the perks of a hotel, rest assured perks still come all singing and dancing with serviced apartments too. Tea and coffee are provided, linen and towels, check in service and the apartments are serviced by a cleaner on a weekly basis for you. Not bad at all for all the money saved and the amazing amount of gained space.

You’ll find serviced apartments in the heart of the city centres nestled between all those hotels you trawled through to see which had the best sized rooms. So, you are still right on the door step of all the attractions the city has to offer, yet only a stone’s throw from your apartment so you can always nip back if needed. You will also find you are near all the best transport links so it’s never far to get the bags to when you arrive and depart, no more are we nearly there yet or how much further my legs are tired. Another bonus to the great transport links of the city is you can always head out of town a little to explore even further. A city break really is the perfect getaway for the diverse family who are trying to please everyone, from city to rural to relaxed in minutes.

Serviced accommodation offers a home from home, familiarity in an unfamiliar place.  For more details on our range of serviced apartments in the Chester and Manchester areas please contact Natalie or Danielle on 01244 343 355 option 3 or visit our Serviced Accommodation area of the website HERE

Stoke-on-Trent, up until now, has not necessarily been seen as the most glamorous of locations for those looking to invest in property despite the historical connections as the heart of The Potteries. Things are rapidly changing though, with strong growth predicted in the coming years, a popular and growing University on the doorstep and a Premier League football club to its name. Residential Estates believe now is the time to invest in Stoke-on-Trent.

There are a number of very good reasons why you should seriously consider investing in property in the Stoke area.

Fantastic Transport Links

For those looking to escape the big city crush but still requiring transportation links that allow them to commute on a daily basis, Stoke-on-Trent is in a special location. From Stoke-On-Trent you can reach the major cities of Liverpool, Birmingham and Nottingham within an hour by road or
rail, Manchester is only a little further though on-going developments to the M6 will cut that journey time soon too. Even London is accessible by train within two hours from Stoke-On-Trent. This access to fast transport links across England and into Wales, just over the border, ensures that Stoke-On-Trent is an enticing prospect for commuters and young families who may be looking for potential day trips away from the area should they choose to live in Stoke.

Quirky Town Configuration

In terms of the layout of Stoke-on-Trent, it is unique amongst modern cities in that it isn’t made up of different areas in the same way as other cities. Stoke-On-Trent comprises of a selection of different small towns, each with their own character and identity. Investing in property in Stoke-on-Trent provides you with the perfect chance to find the right location for your potential future tenants.

Hanley for example is full of quirky shops, independent bars, cafes and restaurants and a great location for shopping. Newcastle-under-Lyme is another strong location close to Keele University and the Royal Stoke University Hospital, with Penkhill and Hartsill both benefiting from recent development that has helped to increase the capacity for students and professionals working in the hospital. This is a residential market that is
sure to remain buoyant.

Growing University and Good Education Provision

There are a number of high quality schools within the Stoke-on-Trent and Newcastle under Lyme areas, but what we feel attracts property investment in the area is the fact that both Keele University and Staffordshire University are right on the doorstep.  In terms of a growing number of students and young professionals looking to learn, teach and work at both the universities and the hospital, Stoke is a city with great growth potential for property investors.  There is already a large population of students and professionals looking for long-term accommodation, and that figure continues to rise with the on-going development of Keele University campus; a £160m project that is due for completion in 2020.

Royal Stoke University Hospital Investment

It isn’t just the University that has seen significant investment in recent years. A £2 million NHS investment into the Royal Stoke University Hospital has been issued last year in order to provide 45 extra beds, cutting down waiting times and hoping to improve the service for an extra 5,000 patients. A large number of medical professionals, as well as professional administrative staff are required to work within a busy hospital such as this one, and with affordable property in the immediate vicinity it adds to the attractiveness of Stoke as a property investment location.

When compared with other areas of the country, the Stoke-on-Trent area continues to see a steady rise in property value from an attractive starting position. For those interested in investing in property for a solid future profit, either from selling property or leasing it, Stoke is certainly an interesting place to consider as there is plenty of upwards movement anticipated in the market.

At Residential Estates we have a wide and varied team of experts that are in a position to offer invaluable advice and guidance on your situation and financial goals. We have also launched an exciting new student property investment opportunity in the Stoke-On-Trent area so we are keen to
speak to investors that share our excitement in this area. At Residential Estates we can help you make the right decision with up-to-date information on the economic climate and the residential market.

If you would like to find out more information regarding our service as property investment experts, contact our office today on 01244 343 355 option 4 or email us sales@residential-estates.co.uk  and our experienced investment consultants will be happy to assist.

As a company we deal with all aspects of property investment, but the trend for our clients right now, and over the last 6 months has not been
leveraging (maybe to do with economic uncertainties such as Interest rates or Brexit) but to put the same amount of deposit into a cash investment with no debts attached to it and the fact it offers all the key criteria of a solid investment, namely:

• High Net returns.
• Fully managed so no upkeep, tenant sourcing, management or day to day issues.
• Proven and documented demand outstripping supply.
• Excellent resale and exit options if required.

We, of course, still have a great selection of leverageable options and would not deter anyone from this method with some very exciting upcoming launches, but this email is designed to highlight why cash investments work for some and dispel some myths.When talking cash investments we are mainly talking about PBSA (Purpose Built Student Accommodation), the main fact is simple – the student population is growing at about 6% per year and there is not enough accommodation to cater for them near the Universities they want to be, whichmeans they have to live further away, which increases their costs and ultimately affects their education. This fact is undisputed and information iseasily accessible on the internet – just search “student accommodation shortage” so this is your DEMAND, and this is one of the key areas of anyinvestment, and demand in certain locations will take an eternity to satisfy.

https://www.qaeducation.co.uk/content/lack-univers...

One area we are very keen to focus on is Newcastle Under Lyme near Stoke On Trent which house 3 Universities but has two very strong plus factors you have to focus on. Firstly the fact that the University campus accommodation at Keele university can only hold 3,000 students, yet theirforecast is to have 12,000 and this is just the one University, this is not taking into account Staffs University and then you have the Royal Stoke Medical University so you have a critical demand for accommodation to attract students. Secondly and more importantly is that there are very few other options, the town is small and does not have the private housing sector to fall back on, places like Manchester and Liverpool have large catchment areas that can offer students choice, hence depleting the number of students looking for YOUR bed, this is not an issue in this area, students do not have the choice here so demand will always be high, please see the link below:

https://www.sellhousefast.uk/blog/university-accom...

As for returns, who can complain at 10% Net after all deductions and with no risk of void periods for 5 years – if you offered that on any other property your hand would be bit off – so after all service charges are deducted, all tenant sourcing and admin, all upkeep and maintenance and fully furnished, you are also currently exempt from Stamp Duty.Then it comes to the ease of resale and how it would work, it really is not as hard as you think or may have been led to believe, the one downside is you cannot “release” funds from the property, this is true but if you needed to exit then your options are limitless and in brief this is how itworks:

• You pay £65,000
• Over 5 years you are guaranteed £32,500
• Your costs are £1,750 for 5 years ground rent

Net return £30,750

You want to sell in 5 years:The rent for the student which includes everything and all bills is £150 per week over 51 weeks – total £7,650 per
annum

*Service charges which includes all management, letting, upkeep and utilities is £1,350 per year.
Rents increase by an average of 3.5% per year
This means the rent will be £178 per week = £9,078 per annum
Minus the £1,350 equates to a £7,728 net return and based on your purchase price is a 11.88% Net return.

*Service charges may also increase in line with inflation but this is a minimal amount over 5 yearsIf you sold your property offering it on the market with the following returns, this is how much your property would be worth:

• 8% Net return = £96,000 and a £31k profit
• 9% Net return = £86,000 and a £21k profit
• 10% Net return = £78,000 and a £13k profit

So offering your property on the market at £78,000 in 5 years with a “REAL” 10% NET return is highly desirable and not hard to see how it would be attractive.

Based on this it means you would have achieved a CASH return in 5 years of £43,750 or a 67% return on your money, and this is why we see this as such a good investment plan.

Any questions please call on 01244 343 355 or email sales@residential-estates.co.uk

In previous posts, we've made the case for Manchester as an attractive property investment destination. It consistently ranks highly in terms of yields and capital appreciation, and increasing numbers of talented young workers are migrating here in preference to London and its over-heated property market.

We've all settled into the New Year, 2018, now, however a small mention must be made for the Residential Estates 2017 Christmas Party at Chester Racecourse.  A lovely meal, drinks and and merry time was had by all.  A Big thanks must go to Steve (P) for the do, which everyone enjoyed.....some more than others ;)

For property investors, 2017 was a challenging year that saw a marked change in investment patterns. A proportion of small-scale landlords left the market in response to a number of 'anti-investor' tax changes which began to have an effect this year. Conversely, many professional and institutional investors now report growing optimism.

A few short years ago, property investment was widely regarded as a sure-fire win. Across the country, thousands of new investors jumped at the opportunity to make quick and substantial profits. Many, of course, did just that; the UK property market certainly produced a good number of winners in the aftermath of the global financial crisis. However, government policy turned increasingly against landlords last year and, weighing the likely impact of measures such as increased stamp duty, reduced mortgage interest relief and the scrapping of the wear and tear allowance, some investors chose to sell up. In June this year, the Council of Mortgage Lenders reported that the number of properties bought by landlords had almost halved in a year - a trend it attributed to the new taxes and regulations.

There is no doubt that government policy has at least partly succeeded in eroding profits in the private rental sector, but recent measures have not produced any mass exodus from the market. Indeed, some big institutional investors see important opportunities ahead.

Given the uncertainties surrounding Brexit and its consequent dampening effect on the British economy, it might seem strange to be talking in terms of rising optimism. However, there are solid reasons for regarding property as a reliable and attractive investment vehicle. To explain this, let's look at some of the key factors affecting the sector.

Returns

One of the best reasons to stay serious about property investment is the absence of better alternatives. Buy-to-let continues to outperform the majority of asset classes, and with inflation now outpacing savings rates, money in the bank is losing value all the time. The stock markets are volatile - particularly while Britain's relationship with Europe is still in doubt - so property looks to be a decidedly more reliable option than most. It has delivered respectable capital growth this year, and average rental values continue to rise.

According to the Halifax, Britain's largest mortgage lender, average residential values rose by 3.9% in the year to the end of November. That alone is comfortably ahead of the rate of inflation and, on top of that, most landlords have also enjoyed a regular monthly rental income.

According to the ONS Rental Index, average rents have risen across all the UK regions - most notably in the East Midlands, which saw values rise by 2.9%. According to Landbay’s National Rent Review, the average monthly rent now stands at a record £1,196.

What's more, rental demand is still strong across the UK and, with no signs of a major house-building boom, renting property will continue to be the only viable option for millions. Demand will therefore remain very healthy, despite forthcoming cost pressures that may force landlords to raise their prices. That being so, Knight Frank forecasts that rents will rise by a total of 14% over the next five years.

Market Size

Although some landlords left the market earlier this year, rental demand stayed strong and, of course, someone had to take up the slack. In many cases, this fell to the larger, more experienced investors who, quite rightly, continue to regard BTL as a long term venture.  As a result, the market as a whole has by no means contracted. According to the latest edition of Kent Reliance’s Buy to Let Britain report, the value of the sector increased by 6.4% year on year, reaching a total figure of £1.4 trillion. Over the same period, it records that average rentals rose by 4.2%.  In other words, the market is not dwindling but rather re-shaping itself. The phenomenon was explained recently by Andy Golding, chief executive of OneSavings Bank, who said: "A fundamental shift in the landlord population is now underway, as buy-to-let moves from being a popular pastime for hundreds of thousands of amateur landlords, to the preserve of committed long-term investors with experience and expertise."

A viable investment?

The readiness of experienced investors to remain in the market suggests a strong faith that, as a long term proposition, BTL still offers exceptional value.  Looking at market forecasts, key commentators expect that buoyant housing demand and continuing affordability pressures will underpin BTL returns for many years to come. In addition to predicting continuing rental growth, Knight Frank also expects to see average property values rising across most regions. After constrained growth in 2017 and 2018 (1.5% and 1% respectively), the company is forecasting average price growth as follows:
 
2019: 2%

2020: 3%

2021: 3.5%
 
2022: 4%

Over the 5 year period, that equates to cumulative price growth of 14.2%. Importantly, however, it does not expect that pattern to be evenly distributed. Some regions are expected to fare considerably better than others.

Regional variations

Knight Frank forecasts that, over the next five years, the leading regions will be the Midlands, the East of England and the North West.

London has endured a rather woeful time in 2017 as average property values began their return to more sensible territory. New buyers and young professionals in particular had seen that at least half their average incomes were destined to be spent on accommodation if they remained in the capital, and so large numbers of them left the city in favour of destinations offering better standards of living.  Manchester, Sheffield, Bristol and other growth areas were some of the biggest beneficiaries.

Due to its size, London understandably remains in the top charts for rental demand, but it is seeing increased competition. In December 2017, property marketplace, TheHouseShop.com published a list of the top five UK cities for tenant demand. After London, the other sought-after rental locations included Birmingham, Bristol, Leeds and Manchester. Amongst these, Bristol attracted the highest number of millennials, Manchester saw greatest demand amongst the 35-50 demographic, and Birmingham attracted greatest interest on the part of those aged 51 to 69.

The falling popularity of central London can quickly be appreciated when one considers the cost of making a home there. According to a recent National Rental Survey by Landbay, "41% of millennials do not expect to ever own a home of their own."Those that rent up to to the average life expectancy of 82 will pay an estimated "£1.1m on rent if they live outside of London, and a staggering £2.6m on lifetime rent if they live in the capital."  These figures may seem daunting, but there is similar price disparity when it comes to buying a property. According to the ONS, the average house price in England was 5.11 times average earnings, and by 2008, the ratio had risen to 7.14. In 2016, it reached 7.72. However, affordability was considerably worse in London, where the price to earnings ratio rose to 12.88.

In London, the result of this overheating market has been a rebalancing of prices - in other words, a drop in average rentals. According to the Mortgage Industry Advisory Corporation, rents fell by an average of 0.83% in London, while outside the capital, landlords did rather better. Overall, according to MIAC figures, rents rose by an average of 1.27% over the course of 2017. This figure is less than the 4.2% cited by Kent reliance, but all reliable sources agree at least that rental values are continuing to rise.

What seems unarguable is that some of the best property investment opportunities are now to be found well outside the South East. In December, Knight Frank published its Private Rented Sector Update, which stated: "Whilst much of the regional PRS appetite to date has focussed on ‘best in class’ city centre assets in key cities, an increasing number of institutional investors are now looking beyond these, to more secondary cities and to well-connected satellite towns... where superior affordability ratios offer greater potential for rental growth, whilst still providing secure income with strong rental demand."

In November, Savills expressed a similar sentiment with respect to capital growth, stating: "Price growth will be most sluggish in areas where affordability is most stretched; particularly London and the commuter belt. Affordability in the capital is already more stretched than the rest of the UK, putting a brake on growth. But areas beyond the Home Counties have potential for growth: incomes have grown more in line with house prices, aiding affordability. That’s why we expect the North to outperform London and the rest of the country. The North West, in particular, has a robust economic outlook and strong employment growth. And house prices sit at a modest multiple of average incomes: 5.6 times in the North West, compared with 12.9 times in London."

Looking ahead

Forecasting prices, rental growth and economic performance is notoriously difficult, particularly at a time when Brexit is casting such a long shadow. However, many commentators seem to feel that once some kind of exit arrangement has been reached with Europe, Britain will begin a process of recovery.

Supply and demand are key to the way that prices will change next year, and several important factors will affect this.

On the supply side of things, house-building is not expected to see a major surge. Indeed, a recent survey of house-builders showed a marked fall in the rate of construction since June 2016. Most believed that the industry would fall well short of the targets set by government - i.e. one million new homes by 2020. If that trend continues, then the private rental sector will remain the only logical alternative provider of  accommodation for the foreseeable future and, accordingly, rental demand should hold strong.

The departure of some landlords earlier in the year will have released a certain amount of stock into the housing market but much of this is likely to have been acquired by other, larger, more experienced investors. Likewise, there is a possibility that new minimum energy efficiency standards in 2018 will see a number of BTL properties being sold off by cash-strapped landlords who cannot afford the costs of refurbishment. Again, however, many of these will be bought back into the private rental sector. In any event, the number of such newly marketed properties is unlikely to make a big dent in the UK market as a whole.

For the moment, the biggest constraint on market growth is regarded by many to be Brexit. In November, Savills wrote that the main thing holding back growth was uncertainty. " With the UK’s future relationship with the EU up in the air, we’ve seen the UK’s credit rating downgraded, the pound weakened, and the economy subdued. Inflation has cut into people’s earnings, with the ONS reporting that incomes fell by 0.4% last year in real terms. Against this economic backdrop, there are no strong drivers for house price growth over inflation next year." However, once the dust settles, Savills expects successive years to offer better prospects, saying: " We expect the market to return to growth in 2019-20, as employment growth, wage growth, and GDP growth swing back towards trend levels."

In short, the Brexit question may cause some short term turbulence, but strong demand and a shortage of new housing continue to provide firm foundations for the BTL market as a whole.

Interest rates

2017 saw the first interest rate rise in a decade as the Bank of England finally chose to push up the cost of borrowing. However, just as it had signalled, the rate rise was very small - a minimal 0.25% - and the Monetary Policy Committee has said that any future rises will be small and incremental. The Bank is wary of making sudden changes, so the market is unlikely to face any big shocks, and the base
rate itself is expected to remain well within a historically acceptable range.  As Knight Frank reported: "The UK may now be entering a period of interest rate rises but, even so, we expect rates to be low compared to long term norms."

Summary:

2017 has seen a shift in the structure of the private rental sector. Some landlords operating at very narrow margins have left the market but the shortfall has largely been made up by professional investors who remain committed to the BTL sector and the impressive returns it still promises.  The sector has taken a number of knocks this year but the market fundamentals remain strong and promising. Demand is healthy; supply is short. That's invariably a recipe for sustainable prices.

2018 will inevitably see further uncertainty, but this should diminish as the country gains more clarity on how its relationship with Europe will evolve. With greater clarity should come greater market confidence and an improvement in economic performance. Once average wages recover lost ground against inflation, this should provide fuel for price growth in the housing market, whilst also alleviating cost pressures on paying tenants.

Forecasts are generally promising, but they vary considerably by region. The North West and the Midlands are widely regarded as offering some of the greatest potential for investors. These are markets that we ourselves have been looking at very closely and we'll be featuring them in some of our blog posts in the coming year.

Until then, have a very happy Christmas and a prosperous New Year from all of us at Residential Estates

In this article, with the Christmas season fast approaching, we're looking at the city from the visitor's perspectiv

There was a time that London and the South East of England were the obvious choices for property investors; capital values rose more quickly, rental demand was dependably high and rental values always looked impressive. The region's prices led the UK property market by such a margin that many indices featured data for "UK markets excluding London" in order to avoid skewing the nationwide averages.

Today, things have changed. Fuelled by waves of overseas investment, London saw a rapid recovery from the global financial crisis and, for a long time, property prices remained buoyant. However, that same, seemingly inexorable rise in capital values led, inevitably, to a problem of affordability. While the super-rich and big institutional fund-holders could still afford to invest in London with the expectation of solid capital gains, ordinary people could not. Prices had simply run too high, and something had to give.

The resulting slide has been apparent in recent market data. For example, the most recent house price index from Rightmove found that average prices in Greater London had fallen by 3.2% in the 12 months from September 2016. By contrast, Yorkshire & Humber rose by 3.1% over the same period, and the North West property market saw an annual rise of 3.4%. With respect to capital appreciation, that represents a straight reversal of the long-standing North-South divide.

A similar pattern is evident when we look at rental values. Rightmove's Rental Price Tracker, published in September 2017, found that average UK rents outside Greater London had risen by 1.2% in the 12 months from the third quarter of 2016. Over the same period, values in the capital actually fell by 3.3%.

The affordability question

For investors, affordability has become a big issue. In order to maintain anything approaching a worthwhile yield, landlords in the South East have had to demand excessively high rents. Rightmove puts the current average asking rent in Greater London at £1,920, compared to the UK average of just £789 elsewhere. At a time when the real value of wages is falling - due to a mix of austerity, business uncertainty and rising inflation - such rental payments must look increasingly daunting in the eyes of ordinary families.

This would certainly explain what appears to be the beginning of a northward migration. More university students are staying in northern towns and cities after graduation, and more southern-based residents are moving outwards in search of more affordable housing. Faced with a shifting pattern of regional demand, many London-based landlords have been faced with a difficult choice: if they keep rental prices high, they could become uncompetitive, risking longer void periods and late payments by tenants. On the other hand, if they drop prices, they will inevitably see a further reduction in yields that are already sometimes tenuous.

To judge by recent data, increasing numbers of landlords across Greater London are now taking the latter option: setting lower prices and effectively sacrificing yields for steady occupancy.

The appeal of the North

Elsewhere, the picture is rosier, and affordability is a key reason for that. Some of the best yields in Britain are to be found in the regions that recovered most slowly from the global financial crisis. In some parts of the North West and the North East, for example, average values are still below their peak 2008 values. Consequently, investors can acquire highly marketable properties for considerably less than they might have to pay in the South East, and yet they can count on robust rental demand and healthy profits. Absolute rental values might be considerably less than they are in London, but as a proportion of the total investment cost, they are much higher, hence the better yields.

According to LendInvest's Buy-to-Let Index Quarterly Report for September 2017, Manchester now delivers the highest yields in the country. Its 6.04% returns are comfortably ahead of its nearest competitors and these are coupled with rental price growth of 6.25% - a figure which was beaten only by Luton (6.81% this year, with yields of 4.51%.)

Commenting on the figures, LendInvest observes "Manchester was considered one of the markets to watch in the last Index, leading the charge for Northern markets in the UK. Manchesters market continues to make great headway ... The citys residential property market boasts the most lucrative average yields thanks in no small part to a thriving rental market. "
Capital gains have been strong in Manchester - averaging around 7.39% according to LendInvest's figures. However, Manchester is not the only success story in the North. Hull has fared very well - producing capital returns of over 11% and yields of 4.65% - but other northern regions are also seeing a surge in their fortunes.

Sheffield City Region is one such market, which is being buoyed by substantial inward investment. Last year, planners launched a £28 billion economic development strategy which aims to create 70,000 new jobs and 6,000 new businesses over the course of the next ten years. Doncaster Sheffield Airport has already undergone a major overhaul and new road connections, while the £500 million iPort project is establishing one of the UK's foremost warehouse and logistics centres. Major improvements in infrastructure, together with rising commercial investment should see a marked rise in both rental demand and living standards across the area. Such outcomes would naturally be welcomed by local landlords.

The Northern Powerhouse

Sheffield is one of the regions expected to benefit from the Northern Powerhouse initiative and the multi-billion pound HS2 rail link. In January 2017, it secured £38 million from Northern Powerhouse Fund. The city region will also have a station on the new high speed rail network.

Other northern cities will also benefit from the Northern Powerhouse scheme, which includes a reported £13 billion for regional transport improvements, over £3 billion for local enterprise partnerships and £60 million for Northern Powerhouse Rail. £400 million will also be earmarked for small business support and investment schemes.

Another big beneficiary will be Liverpool, although in the light of recent private sector announcements, it might be argued that the city is looking after itself very well already. The Liverpool City Region currently accounts for a full 17% of the North West's economic output, but this contribution is likely to grow very dramatically in the next few years. The city plans to deliver some of the country's largest and most ambitious infrastructure schemes, which began with Liverpool2, a £400 million deep-water container terminal at the Port of Liverpool.

More significant still will be a proposed 30-year waterfront redevelopment scheme called Liverpool Waters, for which planning consent has now been granted. This £5.5 billion scheme aims to create up to 20,000 new jobs, and to secure inward investment amounting to £30 billion. If successful, it will represent one of the largest urban redevelopment projects in the whole history of Britain. This should utterly transform the city's economy and, with it, the local employment and property markets.

Student populations

Another important feature of many northern markets is a high student population. Liverpool, for example, is home to four universities and 90,000 students, and it produces upwards of 30,000 graduates every year. Increasingly, as the city establishes itself as a centre of excellence for growth industries such as IT, finance and renewable energy, those graduates are choosing to stay in Merseyside. The same is true of other major cities such as Sheffield and Manchester. Around 100,000 students live in Greater Manchester and the area accommodates more 25 to 29 year olds than anywhere else in Britain.

For a whole host of reasons - affordability, yield, rental demand, strengthening economies and more - northern property markets are looking increasingly attractive to investors. Prices remain comparatively low and yet, having not experienced the ballooning effects of some southern cities, they still afford plenty of room for growth.

* *
If you're considering an investment and you'd like more information about opportunities in the North, please call our advisory team on 01244 343 355.

National statistics can be a useful barometer of general market conditions but there's a limit to how much weight should be attached to them. For example, average UK house-prices might make for attention-grabbing headlines, but as any serious investor will recognise, they are of very limited value when it comes to deciding where and whether to invest.

That's because location makes such a tremendous difference to market conditions. Values and tenant demand will vary considerably between different suburbs and neighbourhoods - sometimes even between different ends of the same street. A country-wide average therefore reveals nothing at all about the appeal of a particular investment destination. When it comes to making a financial success of bricks and mortar, local knowledge is everything.

A Local View

At Residential Estates, our own home territory is the North West - a region that is home to enormous diversity. There are some great locations here, as well as some that should be avoided at all costs. A large part of our work is about steering clients towards the safer, more profitable investments and keeping a close eye on local market conditions.

To take our home town of Chester as an example, we've seen a gradual shift of emphasis on the part of private investors. This can probably be traced back to 2015, when the Government first mooted plans for new tax-based measures aimed at curbing the growth of the private rented sector. However, that shift became more pronounced after 1st April 2016 and the introduction of an extra 3% surcharge on Stamp Duty for anyone buying a second (or additional) residential property.

The newspaper headline-writers would have us believe that the extra Stamp Duty, together with this April's reduction in BTL mortgage interest tax relief, has prompted landlords to sell up and leave the sector in droves. Back in November last year, the Residential Landlords Association published a press release stating that a quarter of respondents (in its survey of a thousand members) had either sold a property or were in the process of selling one. This month, the RLA issued another announcement, stating that 22% of the members participating in its latest survey planned to sell at least one of their properties over the next 12 months. However, a similar number - just under 20% - were planning to acquire more.

This second part of the statement is important. The headline-writers fixated on the 22% leaving the market but few picked up on the more nuanced view. The fact that almost as many were planning to expand their portfolios went almost unremarked. That's possibly just because bad new sells papers, but it's important not to be swayed by that. The reality we see on the ground is very different.

A Changing Pattern

Looking across the UK as a whole, ignoring those all-important local market details, the RLA is no doubt right to point to the high rate of sales of BTL residential property. What is much more debatable is what that actually means.

In our experience, it certainly does not mean that landlords have stopped investing. If local activity can be taken as any indication, what it really means is that they are shifting their sights to alternative forms of property.

The rationale for that is simple: there are very few credible alternatives.

With considerable uncertainty still surrounding Britain's future place in Europe, investors seem wary of investing in commercial property. The economy is languishing at the bottom of the G7 table and there are few signs of any immediate change in its status. For the time being, investing in the fortunes of British business would strike many as a brave bet, whether that's in the form of commercial buildings or stocks and shares.

Likewise, there is nothing to be gained from ordinary high street savings accounts, which are currently producing sub-inflation returns. In real terms, money in the bank is losing value every day.
Investors know this, and they know from experience that property is a good long-term performer. Historically, it has always done well and - when viewed in the long term - it has been much less susceptible to volatility. Capital appreciation has generally been good and - importantly - property delivers the added bonus of a substantial monthly income. Rental returns remain healthy; indeed, the Homelet Rental Index found that they rose by 2.4% in August alone.

So if property remains an attractive option but the Government's policies have made residential investment less attractive, where are all the landlords going?
To judge by the enquiries we're seeing every week, a significant number of them are moving towards student accommodation. It's a subject we've covered before, but the reliability and profitability of such properties continues to attract interest and generate sales.

In Chester and elsewhere, landlords appear to be acting on sound advice: not to sell a property until they know they can find a better home for their money. Shares are risky, and selling up and putting cash in the bank is a recipe for losing out. Given the history of property, a calm, analytical response makes sense. If you're looking to achieve a better return on whatever assets you have, consider the options carefully. Do the research and look around for high-yielding properties; study the local conditions and satisfy yourself that there is proven and consistent demand for the kind of property you are considering.
In many cases, student accommodation might be the answer. Many North West investors have certainly arrived at the same one, but - as ever - local market conditions will determine the best opportunities. For some, that might be a new student flat; for others, an HMO, a family home or a high-spec residential apartment in a salubrious part of town.

Just as there's no single set of national statistics that can identify a good investment opportunity, so there's no single answer to the question of which investment is right for you.

* *

If you're considering an investment and you'd like some free, expert professional advice, please call our customer support team on 01244 343 355.

It’s long been one of the UK’s strongest asset class, a great investment and not likely to change for the foreseeable future. Below we are looking at what makes a decent student investment, are all student properties good to invest in. Our Student Investment Checklist below covers the major questions you will need to ask.....

Area - When looking for your next student investment you have to consider the North / South divide. In England the further south you go property prices increase considerably, certainly the closer you are to London, BUT you will also find student rental figures do not change dramatically. So with similar rental figures, but lower prices in the northern university cities, the student accommodation 'up north' will give you much higher NET returns.

Location - As is constantly banded about, Location, Location, Location, is an important factor. Don't be fooled into thinking that the closer your accommodation is to the city centre the better. Our experience has found that when it comes to specific student property the rents will increase the closer they are to the campus, and the easier they are to fill.

Cost - Student accommodation can vary in cost, but cheap does not necessarily mean bad. In many cases you will find good quality lower cost accommodation providing all the requirements needed for the students of today! Quite obviously a good quality lower cost property with decent facilities and solid rental demand and figures will provide a higher return on investment. Also in many cases developers will offer incentives to investors looking to secure property early on in the development stage, meaning the quicker you make a decision on a particular development the better the deal.

Rental Guarantee - Look for a 2+ year rental guarantee. Just a year! In this case the developer has likely built your alleged ‘return’ (guarantee) into the sales price. Student Apartments that are sure to generate strong rental returns will have at least 2+ years rental guarantees, because the developer is confident the properties will rent out. Anything less than 2 years will have a developer who is not willing to take the risk of assuring the returns.

What is the type of Accommodation? - Is it self contained, a student pod? Do you expect any capital appreciation at all? Student pods (non-self contained apartments) are not considered to be individual properties but depending on size can be purchased using a mortgage, but many student properties attract cash investors looking for strong low risk high returns. Speak to an investment consultant before making a decision so they can advise on exit strategy and expectations. Here at Residential Estates we offer an investment re-sale service providing a strong solution for our clients looking to consolidate and re-invest.

Is it fully Managed? - Who will be managing your property? Ensure your student property investment is managed by a credible company as opposed to just a non accredited company. You will find a good quality rental agent will only rent out accommodation they consider to be decent so they can be sure to attract consistent traffic/demand/good quality tenants and peak rental figures, ensuring you receive the best NET returns.

What does your potential accommodation offer? - Although the word 'student' carries a certain stereotype there are a number of factors it is wise to consider. For example foreign student numbers in the UK have been growing for sometime. Generally the standard of accommodation on offer has got significantly better year on year and that added to higher budgets means students will look to live in the better quality properties. Look for fully furnished accommodation, check the quality of furnishings and what comes as standard in the purchase, an investment consultant can advise on what is needed, provided and necessary to maximise your return and chance of high occupancy levels.

The developer - Who are they? Who are the construction company? Have they built anything else, look for reviews. At Residential Estates we will only work with developers that are either known to us, or have a proven track record so we can assure our clients that the investment they are buying is the highest quality available. Much of our business is referral or repeat, and this can only be achieved by working with the best in the industry.

Currently we have several student investments that we would consider to be strong investment developments providing 4+ years rental guarantees, high NET returns and buy back options:

Royal Riverside, Priestly Street, Sheffield, S2 4DD
Canterbury Halls, Garstang Road, Preston, PR1 1NA

For more information and/or availability on either of these please contact our office on 01244 343 355, email sales@residential-estates.co.uk

As a Chester based property specialist, we naturally have a keen appreciation of the market conditions prevailing within one of Britain's most historic cities. In the course of our work, we routinely help clients to buy and sell homes here, to find quality rented accommodation and, of course, to make profitable, well informed investments.

In this article, we thought we'd explain what makes Chester's property market so special.

First, of course, there are the aesthetic considerations. Anyone who has even a passing acquaintance with the city will be familiar with its beauty, its character and its rich history. Just say the name and images of ancient walls and half-timbered buildings spring unbidden to mind. Visitors and residents alike will understand why it regularly makes the top listings of foreign visitors' favourite city destinations. Home to roman ruins and one of the country's best loved race courses, it has a thriving tourist economy that seems to grow stronger every year.
But an extensive count of such familiar strengths is essentially unnecessary; as a gem of British heritage, as one of the region's leading tourist attractions, Chester is already widely renowned. Most readers won't require a long list of superlatives in order to appreciate that the city is a unique and bewitching place to live. Numerous surveys and 'quality of life' indices would certainly support that view.
Looking beyond the immediate doorstep appeal of a typical city home, what else separates Chester properties from those in other regions? Beautiful and desirable the location may be, but does it make sound financial sense to relocate or invest here?

The Economic Argument:

In answering that question it is worth examining the economic health of the region. Any prospective homeowner or tenant will doubtless want to know how the city is likely to fare in the challenging years ahead; whether neighbourhoods will continue to prosper; whether Chester is capable of sustaining the same enviable quality of life it offers today.
Happily, all the indications are good. Local business conditions are healthy, buoyed by a number of large, well established employers, and the region is attracting considerable volumes of new investment from both the public and private sectors.
Despite its evident history, Chester is not a city wedded to the past. It is home to many forward-focused businesses and it affords a base for workers engaged in some of the UK's most advanced industries. It boasts a thriving financial sector - sustained by major players such as Bank of America, HBOS, Virgin Money and Marks & Spencer Money - and it has always benefited from its well established chemical, pharmaceutical, automotive and manufacturing sectors. This is an impressive feat for a moderately small city with only around 118,000 inhabitants.
One particular growth sector is advanced manufacturing. A relatively recent development has been the creation of a large Airbus UK factory in Broughton. The facility is responsible for the production of Airbus A380 wings and now sustains around six thousand jobs. Its workforce continues to grow, boosting the local economy and fuelling healthy demand for property.
Other large local employers include Moneysupermarket.com, which has its registered head office in nearby Ewloe. There is also the Countess of Chester Hospital, the frozen foods company Iceland and, of course, the tourism industry itself. Collectively, tourist businesses contribute £1.78 billion to the local economy each year and sustain approximately 27,000 jobs.
Another significant employer is University of Chester, one of the oldest higher education institutions in the country. It has five campuses in the city alone, including a science park, a business school and sites teaching a variety of vocational courses.
These organisations are all helping to ensure that prospects for employment remain excellent, that the property market remains buoyant, and that living conditions in and around Chester remain amongst the most appealing in all the country.

Inward Investment

Some of the most notable developments in the vicinity of Chester are being orchestrated by the Chester Renaissance Board as part of a 15-year regeneration programme. Called the One City Plan, it is designed to run from 2012 to 2027 over three phases. The first phase saw £37 million invested in a new 800-seat theatre, which economic development experts predict will support 400 jobs and attract an extra £17 million of visitor spending each year. Phase 1 also includes the construction of the £300 million Chester Northgate Scheme - a retail and leisure development that seeks to generate around £140 million of extra annual income and to deliver 1,000 permanent new jobs.
Meanwhile, the city centre itself will be undergoing a £100 million facelift, through which planners seek to enhance the shopper/visitor experience, boost the retail sector and thereby support around 3,500 new jobs by 2028.
Elsewhere, Chester's Cathedral Quarter will be the subject of regeneration work. The city will also benefit from a new waterfront development and a business improvement district. In subsequent phases, the One City Plan will also deliver improvements to the Castle Gateway, Chester's famous Roman amphitheatre, the racecourse and several other well known city districts.
Further out, Chester Zoo will see a £225 million upgrade, which is part of a tourist strategy designed to produce a 100% increase in visitor numbers by the middle of the next decade. If successful, that strategy would swell the tourist revenue coffers by as much as £3 billion each year.
Cheshire Science Corridor is yet another important development. In March 2017, growth director John Adlen noted its potential to energise the regions economy, explaining that the  250-acre enterprise zone was designed to attract international investment, to support 20,000 new jobs and 500 new businesses. He said: "We want to put Cheshire on the map with its outstanding science and technology assets. Our aspiration is to create a new golden triangle in the North." The site will focus on high value, knowledge-based sectors such as energy technologies and biotechnology.
And so the list goes on. In the pipeline, there are also approved plans for new hotels and supermarkets, new office developments, and infrastructure improvements to support it all - including improved rail links to John Lennon Airport.

In short, there is every reason to believe that Chester's fortunes are on an upward curve; that business will continue to thrive and that the city as whole will benefit from a steadily improving economy. Should that prove to be the case, then that will spell unequivocally good news for residents, home-buyers and anyone with a commercial stake in the city.

Chester's Housing Market

Despite all the activity now taking place in Chester, local property prices are still affordable, particularly when compared to the overheated markets of the South. Accordingly, those seeking attractive, high quality rented accommodation can still find reasonably priced apartments within easy commuting distance of all the major centres of employment. Likewise, investors will recognise that lower absolute prices often translate into very attractive yields.

Chester - Key Facts

According to the LendInvest Buy-to-Let Report for June 2017, the average Chester property rose in value by 3.8% over the last 12 months. Rental prices rose by 5% and average rental yields stood at 4.87%.
For house buyers, the prospects are equally encouraging. Borrowing rates are currently at an all-time low, properties in Chester are still sensibly priced and the prospects for capital appreciation are extremely encouraging. Given the perennial shortage of good family homes on the market, prices were already destined to increase, but given the scale of inward investment, more jobs and more people with disposable incomes should see capital values rising steadily.

Over the last year, affordability concerns have had a constraining effect on price growth at the national level but northern markets have been less affected than those in the South. Having risen at a slower rate, prices in the North now have greater room to move. For markets like Chester, where people are drawn by the promise of a better quality of life, the implications can only be positive.

A promising time ahead for property investing........

2017 / 18 is set to be an interesting time for property investors with the strengthening of rental demand due to the gap between wages, house shortages and house prices. Our investors are enjoying the benefits of dealing with a company that is able to obtain some fantastic developments in key investable areas, providing good room for growth in equity alongside guaranteed returns (with some developments)*

Some cities are out performing others in terms of investing and Residential Estates always looks for investments that will make sure our clients will come back time and time again to re-invest.

If your new to property investment there are normally lots of questions, some of the most common are:

How do you get your developments/investments?
Residential Estates has been established for many years and has built up a great relationship with many of the UKs leading developers. Occasionally developers need to sell property assets quickly, boosting liquidity and enabling them to move on to other projects. With our database of investor clients developers will come to us to achieve those sales and at the same time we help our investors to secure some great deals.

How can you help me?
Our expertise lies in the careful evaluation of investment opportunities and our ability to find each investor the property deals that most effectively meet his or her needs. Our team looks after their own portfolio of clients, and will establish which investment suits your needs, be it short term growth, longevity, or diversification of your portfolio.

Where should I invest?
We cant answer this without speaking to you, safe to say though that different areas of the UK provide different positives when it comes to investing, be it student property, residential, HMO's, there are some areas stronger that others, areas such as Manchester, Leeds, Sheffield, Derby, Sunderland, Stockton on Tees are all great investment areas for different reason.....speak to one of our consultants for more detail of our current opportunities.

I don't know anything about managing a rental property?
Many of our clients are busy, they work 24/7, and/or they don't live anywhere near to the best investable areas. We can deal with the whole investment process from the purchase to the ongoing letting, either via our lettings or serviced team, or via a third party agent, rest assured that Residential Estates will guide you through your investing journey.

What type of returns can I expect?
Each property investment provides different returns for different reasons. Obviously the amount you have to invest will dictate what you can invest in, but we will tend to deal with investments that provide returns from 3% - 15%*

What's the next step?
Contact one of our expert consultants now on 01244 343 355 or email info@residential-estates.co.uk or complete the form on our investments page HERE

*guarantees (if any) & returns are subject to change from development to development, please speak to a consultant for the full details and current availability

You will hear lots of common phrases in the property industry and one that has become widely used in recent years is interest on deposited funds. So what exactly does it mean?

It certainly sounds good when you see it on an advert for investment property. You would be forgiven for thinking that interest on your deposited funds means a nice little bonus while you are waiting for completion. In some case this might be right and even better, if there is a short lead time from the start of construction to completion, you will benefit from some extra peace of mind.

The reason you are seeing more and more deals offering interest on deposited funds is linked to the demand for investment property, which has seen a dramatic increase over the last 12 months – particularly in UK cities north of London.

While this demand is certainly welcome, developers in some of the more popular locations are struggling to keep up and bring new products to the market fast enough while they are still building and completing existing projects.

The situation has become so acute, we have seen even some of the larger developers hold off on new instructions in order to catch up.

With many “London investors” now looking for value in the north, the construction companies covering northern cities don’t know what’s hit them and this has seen project lead times on major projects increase.
In fact, most of the new products on offer have a minimum 18-24 month build time.

OK, property investment has a lot to do with risk/reward but for me, projects with long build times present the highest risk of all and we try to avoid these unless they are particularly special and offer significant capital growth for low exchange deposits.

Bank lending charges for developers are extremely high, so to make the investment more attractive to investors, developers have recently been offering investors interest payments on their money. This has been used to help them secure early sales and secure finance requirements to get developments “off-the-ground”.  Now this can be mutually beneficial, and in most cases it is but investors should also beware that this “return” will generally be factored into the sale price.  OK, its common sense as the money must come from somewhere and in the right area with the right property, the cost of this will be drowned out by good capital growth anyway.

Unfortunately, when interest on deposited funds is payable on developments in areas where capital growth may not be as certain, I still see it as a trick of the trade.  In these cases it only assists in blinkering the investor and providing them with a “return” which they are effectively funding themselves.

My advice here is to consider the reasons why the seller is offering interest on your deposit and calculate the risk against more important factors such as growth, developer reputation and their track-record.

The most important thing to learn if you are hoping to achieve big things in buy to let investment is how to calculate net rental yield. After all, you are in it for the money and if the financial side doesn’t stack up, then you could be wasting your time and money.

To help us understand how a net rental yield is calculated, let’s use the example of Richard:

Richard is looking for property that will earn him a good return on his investment over time. He looks at all the available options and settles on two for comparison.

• The first property is valued at £130,000 with a potential rental return of £600 a month
• The second property is valued at £200,000 with a rental return of £850 a month

Which property should he invest in? Should he invest in the first property which will have lower upfront costs and mortgage payments or should he go for option two, which offers £250 a month extra income?

This is where calculating the yield from these buy to let properties will help Richard to decide which offers the best investment.

The basic formula used for calculating the gross rental yield (this is an important distinction we will return to later) is as follows:

MRR = monthly rental return
I = investment
Yield = MRR x12/I x100

Richard's rental yield for the first property would be:

Monthly rental return = £600
Investment = £130,000
£600 x 12 = £7,200
£7,200 / £130,000 = 0.0553
0.0553 x 100 = 5.54 % yield

His rental yield for the second property would be:

Monthly rental return = £850
Investment = £200,000
£600 * 12 = £10,200
£10,200 / £200,000 = 0.051
0.051 x 100 = 5.1 % yield

So in this example and looking purely at a simple calculation of the yields on both properties, Richard would be better off investing in the cheaper property because the yield on that property is higher.
Now this kind of yield is not far off the average in many UK cities, however this basic calculation still won’t give Richard enough information to make a final investment decision.

To make that decision he will need to look at several variables and factor in costs such as:

• - Advertising for Tenants
• - House Insurance
• - Mortgage costs
• - Solicitor fees
• - Survey fees
• - Cost of redecorating/maintenance
• - Running costs during void periods
• - Costs of furniture and white goods

Deducting these costs will give a truer picture of the actual return on investment from the property referred to as the ‘Net’ yield. If you can deduct these costs from your gross yield and still achieve a yield of more than 5%, this will be a good return on investment.

Another point to consider is that rents will inevitably rise over time. This will only increase your likely yield and there is also capital growth to consider. The value of the property itself should also rise over time, assuming you invest well.