Location: Manchester BMV Property
Current Value: £69,000
Available To You For: £67,000
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The refurb included a brand new boiler and heating system, new flooring, new doors, full decoration and new kitchen appliances.
Traditionally, many investors in the UK property market have benefited from an uptrend in property values and strong rental yields. Below Market Value property was a popular strategy for those looking to eek extra margin from their capital growth approach. A market cooling in 2016 however now means that those capital growth investors must look ahead to a new strategy.
So what's changed? Mortgage lending criteria has tightened; stamp duty has increased; mortgage tax relief for higher earners has been scrapped and the Brexit vote has led to many foreign investors reconsidering their exposure in the UK markets. Competition is no longer as fierce and thus is failing to drive up prices at the same rate. It's clear that the boom years of capital growth are over for now with a predicted dip of 6% for central London Prime property of -6% and -1% across the UK in 2017 before increasing at a modest rate in 2018 (1). Rents however are set to grow, particularly in the North West (3).
According to the Office of National Statistics (2) latest price indices show rents rising by 2.8% in Q1/Q2 2016. Manchester experienced a 2.2% increase in monthly rents however Northern Powerhouse developments (4) could mean Manchester becomes an ever-more attractive gateway to Northern cities through a multitude of improvements to transport links. On average, average rents in Manchester are set to grow from the current city wide average of 5% (5) in light of the short/ medium term market dip.
Manchester is a clear growth location, it is emerging as the UK's second city offering a vibrant cultural, entertainment and sporting scene. It boasts thriving businesses such as those at MediaCityUK which is home to 250 companies today including BBC and ITV studios with additional office space developments commencing in late 2016.
Prime residential buy-to-let properties in the M40 area of Manchester offer quality investments within easy reach of the city's business district, some with high yield rental returns. Single Family Let properties available below RICS valuation and professional HMOs (Houses of Multiple Occupancy) in the commuter belt both provide quality, affordable accommodation for city workers. In a period of flux where some capital-growth investors are looking for alternative investment classes rather than changing their investment strategy, there are opportunities in Manchester for those looking to diversify their portfolio towards high yield property. Properties are available from other investors in this region within SDLT-efficient Special Purpose Vehicles and with yields of up to 9.3%.
This property is located in Manchester.