We’ve explored the hottest property investment location hotspots and trends which we think will deliver the best return and grow from strength-to-strength in 2019.
It’s all about location, location, location according to the popular TV duo who hit our screens in 2000 and yet this still very much rings true. Since the introduction of Brexit shook up the market, house price growth has slowed with London and the South East being the most affected areas. Savvy property investors have moved their interest further north to properties which are lower in price, however, the rental return provides a higher yield with a steadier performance.
Cities in the midlands and the north of England have seen the most growth, especially surrounding university campuses. For example, Birmingham, Leicester, Manchester and Edinburgh.
With further volatility expected to impact the property market in 2019 as the outcome of Brexit negotiations take shape, we foresee that investors will continue to focus on properties with a strong rental yield rather than those which may offer the best long-term capital appreciation.
Still on the topic of strong rental yields, houses in multiple occupation and multi-unit blocks have become a popular property investment choice. Both demand higher rents than traditional buy to lets because you are letting multiple bedrooms in the case of HMOs, or multiple flats in the case of MUBs, within one property. For example, a house converted into three flats would be classed as a multi-unit block. If the house was to be let, then the combined rental income from each individual flat would be higher than the rental income gained from the house prior to it being converted.
Houses in multiple occupation and multi-unit blocks are popular choices for students and young professionals because the rent tends to be lower due to some elements of the accommodation being shared. With overall growth in the economy likely to remain stagnant during the next 12 months as many businesses tread carefully to adapt to the changes which Brexit bring, there will continue to be a strong demand for affordable rental properties.
Read our article, HMO mortgages – what you need to know, for more information.
Another area of growth that has been building momentum in 2018 has been property investors purchasing properties in need of refurbishment, sometimes requiring the property to be completely stripped back to brick, in order to completely replace the electrics, pipes etc.
Property investors have changed strategies to focus more heavily on the long-term opportunity and income a property can present, rather than the quick house price growth that was commonly achieved in London and the surrounding counties. By focusing on buying properties in need of renovation work, property investors can purchase properties cheaper using cash or a bridging loan, carry out the required work (again this can be funded with a bridging loan), and then remortgage onto a long-term buy to let mortgage or sell the property.
For more information on how our Mortgage Brokers can help you achieve your property investment ambitions in 2019, call us on 01702 538 800 or arrange a call back.
