Build to Rent sector attracts record levels of investment

Build to Rent sector attracts record levels of investment

Posted Posted in Buy-to-Let

According to CBRE’s UK Residential Investment report, around £1.4 billion was invested in Build to Rent property in the first quarter of the year. This positive start to 2019 has highlighted investor and end-user appetite for new-build property investments. Despite the on-going uncertainty surrounding Brexit, high levels of investment in the UK’s private rental sector is an encouraging sign for property investors. What’s more, CBRE’s data suggests the second quarter of the year will continue to attract high levels of investment, with almost £780 million of transactions already under offer going into Q2. Popularity of Build to Rent Over the last few years, the UK’s Build to Rent sector has provided investors and tenants with a positive solution amid continuing housing supply chain issues. Investors entering the Build to Rent sector benefit from the expertise of a housebuilder who has pinpointed a prime location with an undersupply of housing, and tenants benefit from the addition of much-needed new-build properties on the market. Highlighting the popularity of the investment in the private rental sector, Knight Frank’s Residential Report expects investment to reach £146 billion by 2025 – a substantial increase from £87.3 billion in 2019. The report, which has calculated its forecast on the combined investment into purpose-built student accommodation, residential Build to Rent and senior living rental sectors, cites shifts to the ‘housing policy landscape in the UK’ and investor appetite towards portfolio diversification as the driving force behind an increase in investment. “The growth of these sectors is mainly down to investor appetite for diversification, the granularity of occupiers that comes with individual units, demographic and tenure shifts and a housing policy landscape in the UK that is now embracing diversity of tenure. “While there are significant differences in market drivers for each sector, there are key synergies in […]

Reasons to be cheerful about property investment after Brexit

Reasons to be cheerful about property investment after Brexit

Posted Posted in Buy-to-Let

Brexit is dominating the national debate in the UK at the moment, and more often than not the discussion around this thorny issue has taken on a negative tone. There is a lot of insecurity about what leaving the EU could mean for British businesses and the economy, and understandably so, particularly when the terms of the withdrawal are yet to be finalised. As far as real estate investment is concerned, there are questions being asked about what Brexit will mean for the property market. It’s true that there is a degree of uncertainty on this front, but looking at some of the sector’s core trends and recent track record, there is also a strong case for investors to feel optimistic. Here are some of the main reasons why…   Strength of demand For buy-to-let investors, tenant demand is a critical deciding factor in the success of their investment, since it fuels regular rental yields and minimises the risk of property void periods. Various factors have contributed to rising demand for housing on the private rental market in recent years, including the growing student population. Britain’s higher education institutions traditionally hold powerful appeal for people in the UK and further afield, and this remained the case in 2018, regardless of the country’s impending departure from the EU, according to UCAS figures. In thriving university cities such as Liverpool and Newcastle, student accommodation has proven itself to be a lucrative asset class, and this is a trend that shows no signs of abating in the years to come. Looking beyond the student segment, the private rental market as a whole is witnessing growing demand from tenants. One of the main reasons for this is the demand/supply imbalance, with the delivery of housing failing to keep up with the number of people […]

Buy to Let student property

Buy-to-let student property gains momentum with investors, says CBRE

Posted Posted in Buy-to-Let

Buy to let student property Trends in the UK Buy-to-let student property market have offered a number of reasons for investors to be cheerful this year, according to CBRE’s newly-launched Student Accommodation Index. The real estate services firm highlighted a number of positive trends in research covering the year to September 2018. During this period, capital values increased by 6.5 per cent year-on-year. This marks a big improvement from the annual growth of 4.5 per cent recorded in the 12 months to September last year. For investors, this is clearly a positive pattern, as is the recent increase in rents, which showed a three per cent gross increase and 3.4 per cent net growth in the latest surveyed period. On a national level, annual total returns were 12.3 per cent during the year to September 2018. Buy-to-let student property is now a readily available asset class that offers investors reliable rental returns. CBRE’s research also examined regional trends, with locations outside central London delivering total returns of 10.5 per cent and capital growth of 4.5 per cent. Other findings showed that small (fewer than 250 beds) and medium (250-500 beds) properties provided capital growth of 5.8 per cent and 6.2 per cent respectively, fuelling total returns of 11.6 per cent and 12.2 per cent respectively. Jo Winchester, head of student accommodation at CBRE, said: “This first published Student Accommodation Index demonstrates the continued strong performance of the sector, which has outperformed the CBRE Monthly Index over the last eight years. “UK student accommodation is now firmly established as a mainstream investment sector.” For investors looking for the best place to invest in student accommodation, Experience Invest is currently offering a number of opportunities for investors interested in this lucrative asset class, such as Opto Student Newcastle and Aura Student Liverpool. […]

BoE raises interest rates - what could this mean for property investment?

BoE raises interest rates – what could this mean for property investment?

Posted Posted in Buy-to-Let

  The decision of the Bank of England Monetary Policy Committee (MPC) to raise the base rate by 0.25 per cent this month may not seem like a very drastic move, but in its historical context the decision has been widely seen as highly significant. Although it is true that the cut from 0.5 per cent to 0.25 per cent during the panic that followed the 2016 EU referendum was reversed a few months later, the increase to 0.75 per cent has a wider significance. It has been described as the first “real increase” since 2007, with the MPC’s minutes hinting that this is the start of a process, albeit probably a slow one, of moving the base rate back towards something that might be considered historically normal. Interest rates and inflation Here Experience Invest looks at how the change in interest rates may impact property investors. In its minutes, the MPC revealed that the vote was unanimous and signalled its intention to take further action to curb inflation. It said: “The Committee also judges that, were the economy to continue to develop broadly in line with its Inflation Report projections, an ongoing tightening of monetary policy over the forecast period would be appropriate to return inflation sustainably to the two per cent target at a conventional horizon. “Any future increases in bank rate are likely to be at a gradual pace and to a limited extent.” Investors thinking about how the increased cost of mortgages might impact them need to weigh up two key facts. Firstly, the clearly stated intention of the MPC is to bring the base rate upwards, essentially acknowledging that normalisation is required to prevent inflation from continuing to exceed the target rate. However, the pace is bound to be slow, not just because the MPC […]

More investors looking to offset tax changes by purchasing as 'company landlords'

More investors looking to offset tax changes by purchasing as ‘company landlords’

Posted Posted in Buy-to-Let

Over the last couple of years, investors in the UK’s private rented sector have faced change after change in terms of the hoops they have to jump through in buying and maintaining stock. Time and again, the government has moved the goalposts for investors in rental property, adding higher taxes for purchasing and removing some of the benefits that come with being a buyer. However, the strength of the market means that landlords have not simply opted to back away from the thriving rented sector, and are instead continuing to look for new ways to invest that can save them money. One of the most popular tactics in this regard involves becoming a company landlord where investors register themselves as a limited company before buying. It’s a strategy that allows buyers to make their operation more tax efficient, and it has been increasing in popularity for some time. And although there were no savings to be made in last year’s Stamp Duty shake up, it’s believed that owners can save on the mortgage tax relief rules change that came into effect on April 6th 2017. This caused a swell in investment from buyers registered as limited companies in the early part of the year, and according to the latest report from Countrywide, as of the end of Quarter One of this year, 20 per cent of the homes to rent in the UK are now owned by company landlords as opposed to traditional individuals. It means that the volume of owners of UK rental property who purchased through a limited company has jumped to its highest level since records began in 2010, while the four per cent rise recorded in the first three months of this year represents the fastest climb experienced in the UK since it first started growing in […]

Buy to Rent

Regions overtake London in Build to Rent construction

Posted Posted in Buy-to-Let

The number of Build to Rent homes under construction across the UK’s regions is nearly double that to London, says research from the British Property Federation (BPF). The sector – featuring purpose-built, professionally managed rented homes – is currently experiencing a boost in activity across the UK, with Manchester and Salford collectively home to the most new rented homes under construction outside of London. According to the BPF, this shows the first evidence of momentum for the Build to Rent sector outside the capital, which recently received proposed recognition in the National Planning Policy Framework, set out in the government’s Housing White Paper. The BPF said that the real estate industry has welcomed the government support, which, it added, should ensure that local authorities can better prepare for Build to Rent in their local plans. Although the regions are performing well, the research has shown that London continues to see the strongest long-term figures, with 38,648 Build to Rent homes either complete, under construction or in planning, compared to 31,176 in the regions. Investors driving the sector have found that achieving scale is a significant challenge, said the BPF. Its research has revealed that although there is room for real improvement, Build to Rent developments are typically increasing in size. The BPF added that a total of 24 developments currently in planning are set to deliver more than 500 new rented homes each, compared to completed developments, which, up until now, have mostly delivered under 100 homes each. Ian Fletcher, director of real estate policy at the BPF, said: “While the government now better recognises that we need a housing sector firing on all cylinders across the UK, our data is a timely reminder of Build to Rent’s contribution to solving the housing crisis. “This research will further professionalise the […]

Rental increases

How will tax changes affect the rental market in 2017?

Posted Posted in Buy-to-Let

What will buy to let tax changes mean for landlords and renters? This year, the rental market in the UK is set to undergo yet another change, when in April, the government introduces its new rules on income tax relief, but how will it affect those buying in the UK, and do new statistics show a worrying lack of knowledge within the sector? The new changes set to affect investors in the rental market will largely centre around income tax. Essentially, those who own rental properties will no longer be able to deduct mortgage interest from their taxable income before submitting returns. It’s a move which may make it more expensive for those who own rental homes, with experts speculating that this could cause a negative effect in the sector, with a greater number of landlords raising rents to compensate. Read advice on the buy to let tax changes from 10 industry experts. Read more…  But how badly will buy to let landlords be affected? According to a newly published property investor survey from Mortgages for Business, around a third believe they will be affected under the new rules. Some 60 per cent believe that income tax rule changes will punish them and affect their income, while 29 per cent said that they do not believe they will suffer. One of the big questions, however, at the moment, is just how much do investors actually know about these changes? And is there still a problem in the sector with regards to knowledge about such new rules? The Council of Mortgage Lenders (CML) recently published a study that suggests this is not the case. Despite the fact that the majority of people will have to at the very least seek advice and look at their own portfolios as the changes come […]

Experience Invest Company Profile expands

Experience Invest Company Profile continues to expand

Posted Posted in Buy-to-Let

Experience Invest company profile continues to expand The Experience Invest company profile expanded in 2016 to include another completed development by Opto Property Group. Chapel Street – a development of 87 en-suite and studio rooms designed for the student market – completed in Q3 2016. The development, which opened its doors to students at the start of the 2016/2017 academic year, is fully occupied and paying investors returns. Situated in Luton’s town centre and just a few minutes’ walk from the University of Bedfordshire, Chapel Street is in an ideal place for students who wish to experience all the town offers. Chapel Street is the second completed student development in Luton by Experience Invest. London Park House, which has been operational since Q3 2014, has been a popular choice for students and has achieved full occupancy since opening its doors just over two years ago. At the end of 2017, Experience Invest company profile will expand to include Opto Village in Luton. This flagship development will bring the company’s total number of student rooms in the town to around 800.   Experience Invest company profile Operating since 2004, Experience Invest has delivered many income generating property investments. Early in 2017, the company will launch a residential development in Luton named New Bedford House. The development will appeal to the town’s growing commuter population and will contain 54 one and two-bedroom apartment. Property prices in Luton outpaced the rest of the UK in 2016, with the average house price up 19.4%. The average house in Luton could be worth up to £48,000 more than the previous year according to data by the Halifax. New Bedford House will provide investors with an excellent opportunity to capitalise on rising house prices in Luton and to benefit from rental returns from a new-build property. […]

Horror Houses: UK Property Investment Improves Living Standards

Posted Posted in Buy-to-Let

From leaky pipes to coin-operated showers, from dodgy DIY to uninvited, furry visitors, the Experience Invest team has had their fair share of horror house stories. Student digs Many of the team’s student housing horror stories are from years ago and before legislation to improve HMOs was introduced, and before investment in a new wave of purpose-built student accommodation had begun. When I moved out of university halls in 2006, I moved into a shared house in the second year with friends. The property was cheap, spacious for the price and, most importantly, close to the university. Everything seemed OK, until things started to break. First the hot water broke down, then we discovered mould, and one housemate was locked inside her room because the door handle (attached by Blu Tack) had fallen off – but on the outside of the door.     With £5 billion worth of investment in the UK’s student property sector in 2015 alone, horror stories like mine are starting to become a thing of the past. According to the latest figures from the property experts at Knight Frank, there are around 525,000 purpose-built student rooms across the country. It is thought that the UK’s student sector is now worth an impressive £43 billion in terms of value (stock owned privately and by universities). By the end of 2016, £4 billion would have been invested in UK’s student accommodation sector. Looking back, my house of horrors wasn’t too bad but I would stay in a purpose-built student development like London Park House if I had the choice again.   Generation Rent There are currently £4.5 million tenants across the UK. ‘Generation Rent’ is a term which is thrown about a lot these days and why wouldn’t it be? The huge housing deficit has forced people […]

New UK property guide released

New UK property guide launched to provide landlords with industry knowhow

Posted Posted in Buy-to-Let

The experts at HomeLet have released a new property guide called Landlords Advice with Regional Relevance.   The property guide contains a selection of tips and sights from industry experts including Ryan Bembridge, Senior Reporter at Mortgage Introducer, Doug Hall from the Residential Landlords Association (RLA), as well as a selection of well-established landlords and journalists from the sector.   Property guide for landlords HomeLet’s new guide is filled with expert commentary from those in the know. The guide is perfect for landlords and investors who want to further information about what’s going on in the market. From Brexit to Stamp Duty tax changes, from the removal of landlords’ wear and tear allowance to cuts in tax relief on mortgage repayments, the UK’s property market has weathered many changes throughout the course of 2016. Brexit may have been the main topic to hit the headlines however, Ryan Bembridge, Senior Reporter at Mortgage Introducer, believes that it’s not all doom and gloom.   “For all the pre-vote talk of a significant drop in house prices in the event of a Brexit, it seems unlikely, because there is still a lack of housing supply to meet demand and that hasn’t changed,” Bembridge explains. “Savvy investors will see the vote as an opportunity, not a catastrophe, as they look to take advantage of nervousness about the economy to buy properties at a discount in cities like Manchester, Leeds, Liverpool and Cardiff.”     Rents continue to rise across the UK Positive rental increases will be good news to landlords, especially to those who have been concerned about changes to the buy-to-let sector introduced by former Chancellor, George Osborne. The latest HomeLet rental index has revealed that the average rental value across the UK (excluding greater London) was £779pcm in the 3 months to April […]