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Earlier this week, we travelled to Nantwich in Cheshire to do some video filming of a Shawbrook Bank-funded project.We took the opportunity to speak to Shawbrook Head of Sales, Gavin Seaholme, to hear his viewings on financing trends, scaling up, and where opportunity lies for landlords and developers:Shawbrook Bank products can only be accessed via a broker, so contact the Property Tribes Broker Team on 0333 3636507.SEE ALSO - Property investment course for scaling upUP NEXT - Case study: Derelict pub to mixed useDON'T MISS - Growing a property portfolio - resourcesNOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
New research has found that, in the last six months, around 51% of UK based brokers have been approached by landlords looking to diversify their portfolios.
According to the data, of those brokers who had been approached by landlords about diversifying, 56% of enquiries were about diversifying into Houses with Multiple Occupants (HMOs). HMOs can generate a higher yield for landlords which will help to mitigate against the additional costs that they now face. Indeed, research by Mortgages for Business found that the average yield of a HMO could be 3.3% higher than a property with one tenancy agreement. However, changes to HMO regulations following a government consultation, due to be implemented from October, could introduce additional regulation in this area.
Landlords are also increasingly diversifying into commercial and semi-commercial properties in the wake of the recent PRA regulations and the changes to tax treatments for buy-to-let properties. The research found 14% of brokers said they had been approached by landlords wanting to increase the level of commercial property within their portfolio. In addition, 9% reported that landlords wanted to diversify into mixed-use properties. Full/source article It is clear landlords are on the hunt for greater yields and also looking to force appreciation through refurbishment and development.
HMO properties produced the highest yields in the first quarter of 2018, at 7.1% - 1.3% above the market average, according to fresh research from Precise Mortgages.
Yields on multi-units, such as blocks of flats, came a close second in Q1 2018, generating an average yield of 6%.
Across all property types average yields fell marginally in Q1 2018 to 5.8% from 5.9% in the last quarter of 2017 and are now at the same level as Q1 2017.
Professional landlords continue to achieve the highest yields, reflected by the fact that those who currently own a portfolio of between 11 and 19 properties are achieving an average yield of 6.7%.
By contrast those who own just a single property achieved yields of 4.8%.
On a regional basis, landlords with portfolios in the North West reported the highest rental yields at 6.7%Full/source article This case study courtesy of Shawbrook Bank also covers many topics including HMOs, yields, and growing a portfolio in the current market conditions with the current tax issues and financial products: