The regional markets continue to perform well. We class the counties of Northamptonshire, Leicestershire, Rutland and Lincolnshire as “regional” and East Midlands, whilst being within striking distance of a sensible commute from London.
The characteristics for residential property investment remain appealing. Without boring on about it; there is a lack of attractive alternative asset classes, interest rates are still low and forecast to remain relatively low, demand for rental properties is strong and house prices are forecast to appreciate c15% of the next 5 years. Nothing wrong with any of that!
We have always been interested in property investment from two key perspectives; capital appreciation and rental yield or rental return. It is the latter that is the key to successful long term investment in residential property; ensuring a good rent, that the property is managed well, and over the years this rental return is a key driver of the total return.
It is possible to secure financing (loan or mortgage) at c4% on a 5year fixed rate. It is possible to achieve a net yield of 6% + on some properties. It is this margin or differential that is the key to a long term positive return. The capital appreciation will come or worst case will not come, but as long as that margin above can be maintained then the interest payments can be serviced and the long term investment held. Loan finance essentially amplifies returns, and if a positive yield margin can be maintained then this leads to a very strong return on investment.
So we stick with our recommendation of residential investment, we stick with our favoured areas of East Midlands and East Yorkshire and if a property (an investment) can be managed well and professionally then the chances of greater return are achieved.
We can assist you in finding properties for investment, refurbishing properties and most importantly, we are experts in property lettings and management. If we can help in any of these aspects then please do let us know.
– Rob Brown
Wishing you a glorious summer!
Get your property sale ready for less…
Get a head start for the 2018 Autumn property market rush by instructing your property during the Summer holidays and we will discount your fees by £500 if instructed before September 1st. While everyone else chills out at the beach we can prepare your property campaign so that it is ready to hit the market ahead of the rest in September, complete with photos that display your house and grounds at it’s absolute best.
If you’re not quite ready for someone to visit your home yet but would still like an idea of the value, our Sales Director Jamie Tyler would be happy to speak with you over email or phone. We can also email a report with similar properties sold in your area.