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Tenant demand is outstripping supply in Liverpool

A new report from The Mistoria Group, specialists in high yielding investment property in the North West, shows a surge of tenant demand across Liverpool up 19% year on year, with an average of 6.6 tenants now chasing every shared room of a new rental property compared with 5.5 in 2016.

With one of the largest universities in the UK and an increasing student population, combined with rising graduate job opportunities, Liverpool is experiencing a booming BTL market, with demand for high-end, quality rental accommodation outstripping supply.

Liverpool boasts a student population of around 60,000 and 60% of them require accommodation.  There is high demand for new and renovated property for the sole purpose of the university students, many of which are looking for affordable, shared accommodation. According to The Mistoria Group, over the last 12 months, student rents in the city have risen by 23% and now sit at an average of £128 per week as at May 2017.

Mish Liyanage, Managing Director of The Mistoria Group comments: “Our lettings office in Liverpool has been operating for two years and during this period, we have seen a surge in demand for rental property from student and professional tenants.  Liverpool is a vibrant city with a buoyant job market and unsurprisingly, many young people want to work and live here.

“Liverpool is booming.  A multi-million pound investment in economic regeneration is transforming the city and over the last decade, the it has attracted more than £5 billion of investment in property, infrastructure and services.  According to Knight Knox, these regeneration projects have seen Liverpool become home to some of Britain’s most ambitious residential, commercial and leisure developments, spearheaded by the widely successful Liverpool ONE project, the shopping and leisure destination, which has refocused the whole city centre towards the waterfront.

“There is no doubt that buy-to-let investment in Liverpool has gone from strength to strength, with landlords enjoying yields of over 10%.  Many property investors are clamoring to snap up HMO properties in the city’s BTL hotspots, such as the L6, L7, L8 and L15 postcodes. With savings earning very little, many investors are recognising that BTL property can give them much better returns.

“Rental yields within one mile radius from the Universities/City are excellent.  Our research shows that student house share rents start at around £85 per week per room, including bills.  However, ensuites can be as high as £115 per week.  Investors can acquire a high quality three bed,

fully-let HMO near a university, which will house students from £120,000 upwards.  The return on investment is very attractive too, with an average of 13% per annum (8% cash rental and 5% capital growth). We have seen almost 32% increase in the sale of our arm chair HMO deals over the last 12 months compared to 2015-2016”

“Our Liverpool Lettings and Sales branch is located at Wavertree and is managed by the local property expert, Ms Tanya Jackson. The branch which completed 2 years now lets over 300 student rooms and has recorded a 95% occupancy rate across the student accommodation it manages, with the summer still to come. Mistoria Liverpool branch plans to expand the services it offer to residential and commercial sales over the next 12 months with the recruitment of highly experienced Sean Casey.”

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Liverpool Named the Top Buy-to-Let Spot for Rental Yields

Liverpool has been named the top buy-to-let spot, delivering landlords average rental yields of 8%, once mortgage costs have been taken into account, found new research from Private Finance.

Liverpool Named the Top Buy-to-Let Spot for Rental Yields

Liverpool Named the Top Buy-to-Let Spot for Rental Yields

As house prices and mortgage costs have the greatest influence on rental yields, Liverpool takes the top spot as it has a combination of a low average price (£122,283) and high rent (£1,021 per month).

Nottingham came in second, with a rental yield of 5.6%, followed by Coventry at 5.4%, Greater Manchester at 4.3% and Portsmouth at 4.2%. Cardiff, Blackpool and Lincoln are next, with rental yields of 3.9% each. Bournemouth and Southampton complete the top ten, with rental yields of 3.8% and 3.7% respectively.

According to the study, which calculated rental yields in the top 50 UK towns and cities with the highest proportion of private rental housing stock, six of the top ten areas with the lowest house prices are also in the top ten list for best rental yields.

Within the top ten buy-to-let spots, average annual interest-only mortgage costs vary significantly, from £5,940 in Blackpool to £13,548 in Bournemouth.

The Managing Director of The Mistoria Group, Mish Liyanage, comments: “Faced with increased taxation and tougher mortgage lending criteria, it’s so important for landlords to ensure they invest in properties that will maximise rental income and minimise void periods.

“Student property gives good returns on investment, as it delivers high yields and full occupancy. There is huge demand for shared student accommodation near the four universities and, with a student population of around 60,000 and 60% of them requiring accommodation, Liverpool is great place to invest.”

He advises: “Increasingly, investors are looking for new and renovated property for the sole purpose of the university students, many of whom want to live in affordable, shared accommodation. Over the last 12 months, student rents in the city have risen by 23% and now sit at an average of £128 per month, as of May 2017.

“HMO [house in multiple occupation] student accommodation gives landlords much higher yields than a three-bed, single-bed property or a student pod. HMO properties can generate this significant increase in revenue because they are rented out to individuals on a room-by-room basis. HMOs often provide between four and ten rooms, rented to individual tenants. Rent will typically include the internet, general utility bills and Council Tax.”

Have you been tempted to invest in Liverpool?

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Liverpool attracts HMO attention due to surge in student demand

If you are thinking of investing in a house to let you may want to consider purchasing a house of multiple occupancy (HMO). In the right area, you could see a 12-15% return on investment, compared to an average of 7% return on a standard buy to let property.

The North West, particularly Liverpool, is becoming a choice location for such investments.

A recent report from the Mistoria Group notes that although the initial investment on a HMO is usually higher than a standard buy to let house, the returns have been considerably higher over the past five years. Mish Liyanage, Managing Director of The Mistoria Group, claims that buying in the right location and market in the North West, much higher yields will be seen compared to a standard buy-to-let in the Midlands or South East.  If you are looking to supplement your monthly income, a HMO provides a secure and excellent performing passive investment. Caution is needed, as is good research, since return on investments can vary drastically by postcode.

If a HMO is close to a University they will usually have a higher return due to the ability to ask for higher rents in these more desirable locations. Students and young professionals will pay the higher rent for a HMO if they are close to their school or work. To further the attractiveness of investing in a HMO in Liverpool and Salford, Article 4 is not in operation, allowing conversion of a family home into a HMO of up to six unrelated people without needing planning permission.

Liyanage explained: For example, investors can acquire a high quality, three bed HMO which houses three students, from £120,000 upwards in Liverpool.  The return on investment is very attractive too, with 13 per cent (8 per cent cash rental and 5 per cent capital growth). The gross rent on the property will exceed £1,235 pcm, as each room is rented out. Larger rooms, open plan living and kitchen areas, ensuites, TVs, unlimited broadband, premium kitchen appliances and furnishings are the type of features that help to generate a high yielding HMO.

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Northern England To Be Property Investment Hotspot

Northern England is expected to become a property hotspot for buy to let landlords over the next year according to new research.

A survey conducted at Legal & General Mortgage Club’s recent buy to let forum asked brokers about the future of the buy to let market following the recent tax relief and stamp duty changes.

80 per cent of the brokers surveyed were found to predict that landlords were most likely to expand their buy to let portfolios in Northern England rather than the previously popular London and the south east.

Northern England properties were found to provide the best buy to let yields in the UK during the second half of 2016, and most brokers expected that trend to continue.

Many brokers have confirmed a boom in interest from buy to let investors in Northern England, as they look to exit a london market where yields have fallen.

69 per cent of the brokers quized in the Legal & General Mortgage Club forum also expected buy to let landlords to streamline their portfolios, selling investment properties with lower yields with a view to following better opportunities.

45 per cent of the brokers expected those ‘better opportunities’ to include investment in University towns and student accommodation to improve investmdent yields.

Director of Legal & General Mortgage Club, Jeremy Duncombe, said: ‘Over the past 12 months, the buy to let market has experienced a myriad of legislative changes.

‘Today’s research from Legal & General Mortgage Club’s inaugural buy to let forum shows one of the impacts of these developments, with developers looking north for value. Landlords are resourceful, and this demonstrates the resilience of the market, despite many changes.

‘The last year has been a particularly challenging year for buy to let. The stamp duty hike, coupled with the changes to tax and the Prudential Regulation Authority legislation affecting landlords with four or more properties, has undoubtedly impacted the purchase market in particular.

‘However, it is reassuring to see that confidence in this essential tenure remains as landlords respond and adapt to this new landscape.’