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Best places to invest in property in the U.K.?

Vanessa Warwick Offline Mute
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22-08-2013,10:02 AM
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Best places to invest in property in the U.K.?

The Telegraph have come up with this list.

I thought it would be interesting to scrutinise their choices, hear from investors with properties in these areas, and discuss the reasoning behind reaching the conclusion that these are the best places to invest in Britain.

Wales

A 4.3 per cent year-on-year price rise is reported for Wales, which previously saw some of the UK’s largest house price falls during the recession. “Activity in July was much better than in June,” says Nigel Jones of John Francis Estate Agents in Carmarthen. “Sales agreed were up by eight per cent, and sales exchanged by 11 per cent.”

West Midlands

This area has seen the greatest number of interested buyers since records began in April 1999. Both new stock and new buyers are in plentiful supply, particularly in Worcester. “In our country house department, we have seen several deals come to fruition in the past few days, from £300,000 to £750,000. And that’s in traditionally quiet August,” says George Pickard of Halls estate agents. “We are definitely seeing a more confident market.”

Huddersfield

“There has been increased activity in recent months, and the feeling that a corner has been turned,” says Alex McNeil of Huddersfield estate agent Bramleys. He has 30 two- to three-bedroom properties on the market in the £120,000-£130,000 range. “We are experiencing a general feel-better factor.”
Luke Whitaker of Jowett Chartered Surveyors agrees. “The market is still buoyant, in terms of vendor inquiries and an increase in market appraisal requests. This suggests positive market changes.”

North East

The area has seen the highest level of interest for 14 years, according to the RICS. Surveyors report that prices are generally rising rather than falling for the first time since January 2012. The location most in demand is Jesmond, where four- to six-bed homes fetch more than £500,000: three times what they would have cost in the Nineties.

Leighton Buzzard

This is an area in which property website Zoopla identified a sudden, downward dip. Here, the average over the past three years has been as low as £230,000 for a semi-detached house. Just 33 miles to the south, in Buckinghamshire’s Gerrards Cross (35 minutes by train into London), house values are 60 per cent higher, around £655,000. Now is the time to invest before the Bedfordshire market bounces back.
Cambridge

Far from scanning the horizon for non-existent buyers, Cambridge estate agents are pitting purchasers against each other.

“Every house we have sold so far this year has gone for the guide price or above,” says Ed Mayer of Savills. “Exactly 50 per cent of sales have sold in competition, too, either in sealed bids or during open rounds of negotiations. The largest offer was 21.53 per cent above guide price.”

No doubt about it, says surveyor Mark Wood of Bradshaws. “We have had an extremely high volume of sales throughout July, with a lack of available properties resulting in prices increasing.”

The only cloud on the horizon, it seems, is that this shortage of supply will lead to a sudden surge in prices, rather than a gradual ascent. For the moment, though, there is no rain falling on the UK property parade. Find the right place to invest, and the result could be, if not pounds, at least pennies from heaven.

________________________________________________

Surely the criteria for the best place to invest should be tenant demand and net yield?

[Image: house.png]Related content:

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27% of Britain's housing wealth is found in London.

Forget BMV greed. Start yield hunger.
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Vanessa Warwick Offline Mute
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22-08-2013,12:12 PM
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RE: Best places to invest in property in the U.K.?

On the topic of yield, ARLA give a different story with the news that recent research shows that rental yields in the North WEST outstrip London!

Data from the Association of Residential Letting Agents shows that houses in North West England are currently delivering the highest rental returns in England.

Conversely, rental returns on houses in central London have been falling for the past six months. Returns have fallen from 4% to 3.5% over this time period, while levels in the North West have stayed relatively steady at 6% or above.

Outside of England, houses in Scotland, Wales and Northern Ireland have also recorded broadly rising return values.

One reason for this difference in rental return rates could be the variation in capital values around the country. ARLA has found that the value of the average rental house in London stands at £1,251,000 compared to just £173,000 in the Midlands. Rented houses in Scotland, Wales and Northern Ireland have an average capital value of £197,000.

Rental figures for flats followed a broadly similar geographical pattern, with central London properties offering an average return of 4.1%, compared with returns of 5.2% and 5.8% in the North East and North West respectively.

The survey also showed the average void period – the time that a rental property remains vacant between tenants – remained steady at three weeks across the UK.

Read the full story >>> here.
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Omario Offline Mute
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22-08-2013,12:49 PM
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RE: Best places to invest in property in the U.K.?

An 'interesting' if not accurate piece of journalism. Nice to see the whole of Wales acts and moves as one market. If the journalist is comparing Leighton Buzzard to Beaconsfield he hasn't been to both of them before writing the article.

A letting agent in the N West informed me that properties going for £120k pre-CC are now selling for £55k-ish. Yields are commonly around 10%, the cash flow is much, much better than many areas in the South for comparable property/tenants but time will tell if that compensates for any capital growth.

Although I don't know the rental markets well I am surprised there is no mention of the Readings and Oxfords in the report. The property markets in Leighton Buzzard and Milton Keynes are still strong bets in my mind but other areas nearby to them suffer low yields in comparison.
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john_corey Offline Mute
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23-08-2013,08:54 AM
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RE: Best places to invest in property in the U.K.?

Well spotted Omar. Journalist focus on what sells their articles more than they focus on what sells property.

To all, what do you think of this statement in Vanessa's post "... recent research shows that rental yields in the North WEST outstrip London!"

This might be very true. The equation for yield has two inputs. One is the rent and the other is the price of the property (maybe the value rather than the price).

If you want to double the yield and rents stay flat, cut the price in half. If you find yields are dropping that could easily mean house prices are rising.

The NW is not known as a property hotspot at present. London prices are rising faster than the rest of the UK. Unless London rents are moving in lock step with London prices, the yields would be falling in London.

As I commonly say, gross yield, is a crap indicator. It completely misses the expenses side of a BTL business. If people want to use a crap indicator they should at least think about the variables in the equation and what will cause a shift in the output. Not something a journalist will be paid to do so they will not care.
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MatthewS Offline Mute
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23-08-2013,07:11 PM
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RE: Best places to invest in property in the U.K.?

(22-08-2013 10:02 AM)vanessa warwick Wrote:  The Telegraph have come up with this list.

I thought it would be interesting to scrutinise their choices, hear from investors with properties in these areas, and discuss the reasoning behind reaching the conclusion that these are the best places to invest in Britain.

Wales

A 4.3 per cent year-on-year price rise is reported for Wales, which previously saw some of the UK’s largest house price falls during the recession. “Activity in July was much better than in June,” says Nigel Jones of John Francis Estate Agents in Carmarthen. “Sales agreed were up by eight per cent, and sales exchanged by 11 per cent.”

I wonder who we should believe - the Estate Agent above

or the person in the link here http://www.mortgagestrategy.co.uk/latest...25.article

who said....

Property surveyors e.surv warn the Welsh housing market is still in the “grip of the credit crunch” as house prices fell again in June.

Prices fell 0.2 per cent – or £338 – between May in June to £150,189.

Welsh house prices have fallen nine times in the past 12 months and are down 1.6 per cent over the year.

Meself, I wouldnt believe anything an EA told me, I can then be never disappointedUndecided

Just goes to show how sometimes at odds the information out there is?
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RobertBence Offline Mute
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24-08-2013,02:19 PM
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RE: Best places to invest in property in the U.K.?

Hi Vanessa,

I covered the above article in last weeks Property News Radio.

You can listen to it here > HERE

But in the show notes I added...

The journalist picks out several ‘hotspots’ that range from a country (Wales) a region (The North East) a county (West Midlands) a City (Cambridge) and towns (Huddersfield & Leighton Buzzard) there is clearly no science to this article and you should base no investment strategy on it. Unfortunately as the property market takes off more of this lazy journalism will appear but don’t worry Property News Radio will cut through the drivel!
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Vanessa Warwick Offline Mute
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28-08-2013,11:30 AM
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RE: Best places to invest in property in the U.K.?

More BTL hotspots have been announced! Smile

Buy-to-let investors should look at Birmingham, Kent and Merseyside postcodes and shun London's bumper rents for top yields, according to research.

The income hotspots for property investors have been highlighted in nationwide data by Move with US that looks at yields, rental income as a percentage of a property's purchase price.

The B7 postcode can garner landlords a 10.6 per cent gross rental yield according to data from Move with Us revealing buy-to-let hotspots, while TN28 and L14 offer yields of 10.5 and 9.6 per cent respectively. But large areas of Greater London currently return an average yield of less than four per cent.

[Image: article-2402642-1B681F24000005DC-671_634x627.jpg]

The study looked at two-bedroom properties for sale and for rent and identifies that the highest yields are scattered widely across regions and mainly outside of Greater London.

London's low returns come because while rents are high, properties in the capital are expensive. Rental returns are better in the area surrounding London, where property prices are lower but demand for lettings is still high

Full article >>> here.
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