Buy-to-let investments, especially in areas with high numbers of young professionals and students, are a pretty safe bet in the current climate. With more and more people now renting for the long-term, as a landlord you will have a greater pool of tenants to choose from. In turn, this means you can achieve higher rental yields and reduce your chances of encountering those dreaded void periods.
However, according to recent research carried out by HSBC, it’s important to bear in mind that when it comes to letting property out rental incomes depend greatly on location. While London might seem like the ‘promised land’ when it comes to property, this is not actually the case with buy-to-let.
Rental yields in some parts of the capital are as low as 2.7% thanks to property prices soaring in London’s most affluent areas. Even the traditionally cheaper areas, such as East London and parts of South East London, are becoming less and less affordable as the capital’s property market continues to operate on another level to the rest of the country. Although London has significant demand and high rents, this doesn’t transfer to good returns for investors because property values are also very high.
As estate and letting agents in Portsmouth working across the south of England, we were delighted to see that Southampton came top in HSBC’s research on the highest rents for buy-to-let investors. Rental yields – in other words the annual return you make on your property, calculated by dividing a property’s price by the yearly rent – are as high as 8.73% in Hampshire’s largest city. Nearby Portsmouth, another area we cover at ChimneyPots, also made the top 10, with rental yields of 6.5%.
Both Southampton and Portsmouth are big university towns with considerable student populations. This makes them a popular choice for investors and landlords because the student accommodation market is very reliable and consistent, if not without risk. Landlords based away from London are also witnessing the benefits of young professionals and young families deserting the capital for more affordable towns and cities, where rents are cheaper and quality of living is often higher.
Also, for those working in London who are happy to commute, Southampton and Portsmouth are not as far away from the capital as some might think (1hr 17m from Southampton Central to London Waterloo; 1hr 33m from Portsmouth Harbour to London Waterloo). With houses relatively affordable in these two cities, and decent rents still being commanded (the average rent in Southampton is £901), you can be pretty confident of getting good returns on your investment.
As rental growth continues to rise in 2015, yields are expected to increase marginally this year, too. As such, now is as good a time as any to consider a buy-to-let purchase.
If you would like more advice on letting your property, please contact us on: 0844 809 993. Additionally, we provide an instant online valuation to show how much you could be renting your property for.
http://ow.ly/LAhDG
Rental yields in some parts of the capital are as low as 2.7% thanks to property prices soaring in London’s most affluent areas. Even the traditionally cheaper areas, such as East London and parts of South East London, are becoming less and less affordable as the capital’s property market continues to operate on another level to the rest of the country. Although London has significant demand and high rents, this doesn’t transfer to good returns for investors because property values are also very high.
Both Southampton and Portsmouth are big university towns with considerable student populations. This makes them a popular choice for investors and landlords because the student accommodation market is very reliable and consistent, if not without risk. Landlords based away from London are also witnessing the benefits of young professionals and young families deserting the capital for more affordable towns and cities, where rents are cheaper and quality of living is often higher.
Also, for those working in London who are happy to commute, Southampton and Portsmouth are not as far away from the capital as some might think (1hr 17m from Southampton Central to London Waterloo; 1hr 33m from Portsmouth Harbour to London Waterloo). With houses relatively affordable in these two cities, and decent rents still being commanded (the average rent in Southampton is £901), you can be pretty confident of getting good returns on your investment.
As rental growth continues to rise in 2015, yields are expected to increase marginally this year, too. As such, now is as good a time as any to consider a buy-to-let purchase.
If you would like more advice on letting your property, please contact us on: 0844 809 993. Additionally, we provide an instant online valuation to show how much you could be renting your property for.
http://ow.ly/LAhDG
No comments:
Post a Comment