The initial outlay to purchase a property inside London can be staggering to first time investors. Some investors have even been turned off from property ownership due to the high initial costs. Looking outside of London offers investors a wider variety of more affordable investments, which in turn, means lower initial costs. Properties tend to be far cheaper outside of London because competition is lessened. Better Properties, Less Maintenance With space at a premium new build property developments are rare in London. The trend is towards refurbishment of existing buildings – many of which are beginning to show their age. Wear and tear on those existing buildings can lead to costly unforeseen maintenance bills. New property developments outside of the city, provide for more efficient buildings and being new require far less maintenance and upkeep. Room for Growth Most of the provisional towns outside of London are growing at pace, with many people realizing there are advantages to moving out of London. An investor who gets in early on this trend can experience much higher growth over the medium to long term, than a mature market. Better Return on Investment (ROI) You would think that the sky-high rents within London mean a better ROI, but in many instances that simply isn’t the case. In recent studies, properties in Hull, Nottingham, Southampton, and Blackpool were all shown to have approximately three times more income potential when compared with similar properties in London. This report collaborates with our own experience, were we have consistently seen yields for Buy to Let for properties outside of London earning 3% more than those in the capital. Widening Appeal of Commuter Belt Working in London can be attractive due to the job opportunities created when large amounts of people populate one area. Although people may work in London, unaffordably high city rents are pushing people to live beyond London and to commute greater distances. Demand for rental accommodation within these commuter belts is at all time high since for many professionals these areas offer the only rental options they can afford. Less Competitive Market Within London, competition to attract tenants is fierce. With so many buildings and such a huge population, property owners need to do whatever it takes to attract new tenants. (The truth of the matter is that within London almost everything becomes a competitive marketplace). There are times where competing with other property owners just is not worth the hassle. Using agents and management companies only reduces your potential yield. Towns outside of London are far less likely to have such a competitive market. Investors that buy properties outside of London gain the advantage of not having to compete with those within the city. Therefore investors have far greater opportunity to receive their asking price, since they are unlikely to be undercut. Summary While it is undeniable the growth of the London property market has been meteoric since 2007, there are strong signs of a change in the status quo. The average Londoner is now quite simply unable to afford the rental prices demanded within the city and is forced to look outside the capital. Therefore a great deal of opportunity now lies beyond London. Investors who limit themselves to within the capital, may not fair as well as they think. If you would like to find out more about property investments and how Flambard Williams might be able to benefit you, please don’t hesitate to get in touch.
The rental market in the UK has drifted over the last year or so with rents in London actually falling year on year according to research from HomeLet. This has led to rental rates nationwide growing by a modest 0.4% in April of this year. In London this figure in fact dropped by 1.7% month on month from March to April 2017.Read Full Post
Demand for property in the rental market has been questioned of late with the National press suggesting that UK rental property demand had in fact dropped in the last 2 years, with ARLA property mark saying there were just 26 prospective tenants registered per branch in December.Read Full Post
We’ve taken the opportunity to prove why the latter is in fact the reality in 2017, and what buy-to-let can offer investors in comparison to other investment vehicles on the market, such as stocks and investment bonds.Read Full Post