Investors looking to northern UK
London has been well documented as experiencing a boom in buy to let, but there is some evidence to suggest that real estate investors are now looking further North where prices are cheaper.
Experienced investors are now looking elsewhere to capitalize on the current market and according to Platinum Portfolio Builder, the North on England is generating greater interest.
Nick Carlile, who is Founding Partner of Platinum Portfolio Builder and has worked in the property construction and investment industry in and around Yorkshire since the age of 16, believes that renewed faith in the market has sparked a surge of interest.
‘Even though a 25% deposit is still required, this is more achievable on a £100,000 property in the North than on say, a £250,000 plus property in the South, where prices are still considerably higher,’ said Carlile.
He believes that experienced investors are recognizing that stagnant house prices and high demand for rental properties from those who cannot afford to make a purchase, are making investments more accessible with greater security of a good return.
‘The north, versus the south, offers much greater opportunity to buy more than one property, building a portfolio over a faster period of time. If managed correctly, it has the potential to return much higher returns than in the South where yields are often half what is achieved in the North,’ he explained.
‘Having made many such investments myself in Yorkshire, I believe investing in property here has many opportunities. Of course, there are thousands of micro markets in the UK and this is just one, but successful property investing is about understanding these micro markets,’ he added.
He pointed out that regional towns and cities in Yorkshire benefit from high yields, robust rental income and strong prospects of future capital growth, offering ideal conditions for those with money behind them or a decent deposit.
‘Capital growth is part of a medium to long-term investment, especially in the current market, so rental yield is crucial. Yorkshire offers a secure buy to let investment from a more affordable starting point. There is more scope to purchase properties with a significant discount; on average we achieve 26% below survey value for our clients with an average gross yield of 8.9%. Typical yields for London are said to be around the 4% mark due to much higher property prices,’ he said.
Platinum Portfolio Builder has recently seen an 18% increase in the number of clients wanting to invest in the last quarter, in particular from investors based overseas.
‘There seems to be a distinct improvement and renewed faith with investing in property and 2011/2012 is offering the prime time to do so. During 2010 the discount achieved equaled to over two million in equity for the benefit of our clients and shows the strength of such investments in the North of England,’ he added.