Real potential: Halifax could benefit from the Powerhouse effect CREDIT: GETTY
"BUY-TO-LET PROPERTY HOTSPOTS TO LOOK OUT FOR IN 2018"
Published by Zoe Dare Hall - The Telegraph on 12 JANUARY 2018
Amid the uncertainty of Brexit and increasing tax burdens for landlords, 2018 may be the year for rental investors to branch out beyond the obvious in the North of England.
Landlords may look back at 2017 as the year that things got tough. There are more regulations to pay attention to and more tax to pay, dwindling rental returns and, in London especially – where Brexit uncertainty and high stamp duty are stifling the market – little hope of capital appreciation for a while.
In the UK's property microcosm, however, there are always new locations and new opportunities. Many investors who might otherwise have chosen London have reset their sights on the Northern Powerhouse (such as Leeds and Manchester), booming Birmingham and on alternative investments such as student or short lets.
It has been “a phenomenal year” for those who invested in Manchester, says James Cameron, director of property management company Vesper Homes. “We expect 2018 to be even better,” he adds, citing high demand for rental properties within walking distance of the city centre.
Amid the uncertainty of Brexit and increasing tax burdens for landlords, 2018 may be the year for investors to branch out“The influx of aparthotel schemes, which generate around 15pc additional rent per week, have pushed up rental values in Manchester. Our clients are achieving 10pc to 14pc on properties that are three to five years old and slightly less on new build, and the entry point is just £150,000 for a one-bedroom flat,” says Mr Cameron. Along with aparthotel-style lets, he suggests looking at corporate and student lets in the city.
Liverpool is another northern location to watch in the next 12 months, according to Rob Bence, co-founder of The Property Hub. “I think we'll see it in the top three cities for capital growth in 2018. A decade on from its year as capital of culture, it continues to attract plenty of investment and development. It's also a major university city, which makes it a prime location for investors,” says Mr Bence.
Some secondary northern locations will also benefit from the Powerhouse effect, says Ray Withers, chief executive of Property Frontiers. “There are less well-known but equally promising and enterprising regional towns that benefit from low entry points, the availability of strategically located development sites and weak competition from existing rented stock,” says Mr Withers.
He thinks that Halifax, Wakefield, Doncaster and Bradford have the potential to deliver – “provided they show the classic market drivers as well, such as an uptick in jobs and population and new regeneration or infrastructure projects.”
Mr Withers adds: “Many places across the UK fit the bill and are starved of the investment they need to grow and prosper. They deserve to be the 2018 buy-to-let hotspots.”
In summary, 2018 may be the year for buy-to-let investors to branch out beyond the obvious.