With rental demand increasing, property continues to attract investors. Although demand and rents are highest in London and the South-East, these are not necessarily the best areas to invest in buy-to-lets, because purchase prices are so high. A new report suggests three regional cities in the UK are expected to outperform the capital. Real estate advisor JLL suggests the prime property market in London will remain flat. The uncertainty over Brexit, inflation and affordability of homes have all created uncertainty, the report claims. However, the report does pinpoint three hotspots which are worth investigating further – Manchester, Edinburgh and Birmingham.
Prices and rents have been pushed up in Manchester over the past couple of years because of low levels of supply. This is set to continue, which makes the northern city a good investment opportunity at the moment. In Edinburgh, there has been a strong demand for family homes in the suburbs, as well as the Build to Rent scheme in the city centre. Birmingham is also benefiting from the Housing Growth Fund investment for 2,000 new homes, which makes this city another option. The Hometrack UK Cities House Price Index analyses market trends at city level. It shows house price inflation in Manchester has hit a 12-year high, as demand outstrips supply. Its annual growth was 8.9 per cent, compared to a UK average of 6.6 per cent, and the average price of a property is £151,100, compared to a UK national average of £205,600. Annual growth in Birmingham was a little lower at 7.5 per cent, with the average property price standing at £147,400. Edinburgh is more expensive with an average of £202,300 and an annual rate over the past 12 months of 3.7 per cent
You can get an instant and automatic valuation on properties, by using Hometrack, which has just been acquired by Zoopla for £120 million. The PropTech company is used by most of the top UK lenders and is a field leader for the depth and sophistication of data provided, especially property valuations. Zoopla already owns the price comparison site Uswitch and property sales website Primelocation, so this is a natural progression. Hometrack has been around since 1999, providing information for mortgage lenders, property investors, surveyors and home buyers. It means a surveyor no longer needs to visit a property to value it.
Investors can also use PropTech like OneDome, which is rolling out its Local Reality tool across the UK. This gives instant information about postcodes, so investors can find out about the local area, such as whether it is quiet or has a low crime rate. This is very handy for buy-to-let investors who need to make sure their properties will be of interest to tenants because of the area’s location, safeness, transport links and amenities. Location is still the key factor in the property world and so local knowledge, whether it is through an app or personal experience, is so important when making a big investment.