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Newcastle Market Insight

Posted on by Conor Kilcoyne

Newcastle Market Insight

By Conor Kilcoyne, Senior Property Consultant

With a range of topflight sports teams, historical & cultural experiences, shopping & leisure facilities, and an attractive nightlife one could say the Newcastle community is a proud one. As well as an established community, Newcastle is fast becoming the most sought-after buy-to-rent market in the UK for investors seeking greater capital growth and a more attractive yield than the go-to regional cities can now offer.
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Property values in Newcastle are 14% lower than that of Birmingham and Manchester.

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Newcastle is one of the fastest regional growing economies in the UK.

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Over 33% of graduates from Newcastle Universities go on to live and work in the city .

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Arc Avenue is set within the heart of the £60m Gateshead Quay re-generation project.

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Newcastle property prices have experienced 78% growth since 2000.

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20,000+ students study in city highlighting the need for high quality accommodation.

Commercially, Newcastle has never been so strong with large global corporations such as Siemens, Sage PLC, Nestle and Proctor & Gamble occupying office space and setting up UK headquarters throughout the city.
Newcastle plays host to two of the UK’s leading universities: Newcastle University and Northumbria University. Newcastle University is often regarded as the leading university for Computer Science in the country, producing the next generation of tech entrepreneurs who will flourish in the city. Factoring in the North of Tyne Devolution deal which will see annual growth in economic output of £1.1bn and 10,000 new jobs, Newcastle’s already growing base of young professionals (33% of all graduates settle and work in the city) looking for quality, affordable accommodation is only going one way.
According to the PP index, it was not until 2019 that property prices in Newcastle recovered to pre-2008 levels. Comparing this to other post-industrial cities such as Birmingham and Manchester who recovered as quickly as 2014, real estate in Newcastle is now well-positioned to out-perform the rest of the UK. Development is set to surge from 2022 onwards with developers applying for planning with local councils in increasing numbers.
Newcastle remains one of the more affordable buy-to-rent locations in the UK, with property prices currently 15% below rival cities, such as Manchester. However, with continued investment into the city we are seeing property prices begin to soar. This means that Newcastle is primed for sustainable capital and rental growth for many years to come.
SALES MARKET

23.46%

Property values up 3.9% over the past 12 months and 23.76 over the past five years.

14.0%

Newcastle property prices are 14% lower than Birmingham & Manchester.

863,000

Newcastle’s population is expected to grow by 863,000 by 2030.

RENTAL MARKET

6.52%

Newcastle postcodes boast one of the highest average buy-to-rent yields in the UK, at 6.52%.

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The average property is let within 2.5 weeks of going to market.

33.33%

Over 33% of university students stay to work in Newcastle.

Due to Newcastle’s growth, Surrenden Invest have acquired exclusive access to the best investment opportunities in the city. These opportunities strengthen our already healthy nationwide development portfolio.
Please do not hesitate to contact me if you would like to discuss the investment case for Newcastle in greater detail or find out more about our latest opportunities in the city, such as the recently launched Arc Avenue, a waterfront Grade II Listed period conversion.
Conor Kilcoyne
Senior Property Consultant
conor@surrendeninvest.com

For regular updates and advice on investing in Newcastle Buy-to-Rent property, follow Surrenden Invest on social media or get in touch today.

Things you need to know about Buy-To-Rent Best Practice – Part 1

Posted on by admin

Buy-To-Rent Best Practice – Welcome to the exciting world of property investment

It sounds very simple…. For property to be a good investment, you need to make more money from it than you spend, however in practice its not always that simple. Buy-to-rent is one of the most established and reliable ways of growing capital, both as a means of boosting earnings and as a retirement plan.
If you are new to property investment, it can be tough to know where to start. That’s why Surrenden produced regular reports such as this helpful guide to investing in UK property. We’ll cover everything from the different types of property investment to industry terminology, along with historical property market trends, current hotspots, regional demographics and some property investment best practices.
If you’re considering investing in property for the first time, read on!

Buy-To-Rent Best Practice

1. DO YOUR HOMEWORK

If you are considering a buy to rent investment, it’s time to start researching. Property investment consultancies can help here, as they will have plenty of local area knowledge, but it’s essential to undertake your own research too. This should cover everything from the buy-to-rent mortgage options that are most suited to you, to your responsibilities as a landlord, to detailed analysis of the areas in which you are considering for investment.
That means getting under the skin of each location and finding out about its property market, recent and planned regeneration work, population growth, visitor numbers, upcoming infrastructure projects, rental market demand and yields – anything and everything that can help to inform your decision regarding in which area and which particular property you should invest in.

2. MAKE LIFE EASIER FOR YOURSELF

It is entirely possibly to buy a resale home, refurbish it, furnish it, marketing it and rent it out yourself. However, few people have the time and energy to take this approach. That is why most new build developments come with the option to purchase a furniture pack and to use a turn key management solution. These are particularly useful to first time investors looking to ease their way into the buy-to-rent sector as smoothly as possible. Just remember to do your research here too and check out the management company before you commit to using them.

3. INVEST WHERE YOU KNOW

That does not mean you should only invest in your hometown – rather that it is worth getting to know the place(s) in which you plan to put your money. Researching an area from the comfort of your desk or sofa is important, but it cannot deliver that instinctive feel that you get for a place when you go there in person and look around it.

4. KNOW YOUR INVESTMENT CONSULTANCY

Just as you need to check out your investment location in detail, you need to find out all you can about the consultancy with which you are considering investing with. That means speaking to them by phone and establishing how knowledgeable they are about the UK property market. If that process leaves you with any qualms, move on until you find a consultancy that gives you full confidence. Read testimonials and reviews as well – not just on the agency’s website, but elsewhere on the web and ask what percentage of their clients reinvest with them – if it’s zero, then that’s a big warning sign.

For regular updates and advice on investing in UK Buy-to-Rent hotspots, follow Surrenden Invest on social media or get in touch today.

Welcome to the exciting world of property investment

Posted on by admin

Welcome to the exciting world of property investment

Surrenden Invest is an award-winning property consultancy for clients looking for asset-backed, full-service buy-to-rent opportunities. We deliver a national residential portfolio, working with some of the largest regional and national developers in the UK.

We don’t believe in a ‘one size fits all’ approach, so our team of property professionals work at the forefront of regional opportunities, while delivering expert national coverage. We take an in-depth view of regional markets so that we can deliver unique opportunities to our clients and better meet their investment requirements.
With our exclusive portfolio, regional coverage and expert consultants, Surrenden Invest has established itself as the go to property investment consultancy of choice for investors looking to capitalise on the UK’s lucrative property market.
Our partnerships enable us to present our clients with the very best of the UK’s buy to let market, that would ordinarily only be available to institutional investors.
Before we launch a new development, we undertake extensive due diligence, to ensure our clients can invest with utmost confidence. We balance a regional focus with a national outlook, working with investors to meet their individual needs.
If you are new to property investment, it can be tough to know where to start. That’s why Surrenden produce regular reports such as this helpful guide to investing in UK property. We’ll cover everything from the different types of property investment to industry terminology, along with historical property market trends, current hotspots, regional demographics and some property investment best practices.

Download your complementary Buy-to-rent Guide, National Portfolio Brochure and link to our meet the team page

Brexit: What Can UK Property Investors Expect on January 31st 2020

Posted on by Charlie Herbert

Brexit: What Can UK Property Investors Expect On January 31st 2020

The long “Brexit dip” in the London property market appears to have bottomed out ahead of a possible spring revival. While the economy is still languishing, the current weak pound could actually make the UK property market more appealing to foreign investors, as their money will go further.

Assuming the European Parliament also gives the green light, the UK will formally leave the EU on 31 January with a withdrawal deal – and it will then go into a transition period that is scheduled to end on 31 December 2020, during this period the UK will effectively remain in the EU’s customs union and single market.
The UK Property Market has been held back over the last 12-18 months due to the uncertainty of Brexit and latterly the election. Now both of these questions are settled it is likely there will be a bit of a Brexit bounce in activity at the start of 2020. As a result, we expect more people to put properties up for sale and more buyers coming into the market.
Estate agent Savills has said it is benefiting from a “Boris bounce” that has driven an increase in UK house sales since the December general election.
Looking to the year ahead, increased political stability in the UK should maintain improved sentiment in real estate markets. Nevertheless, some caution may remain until the full impact of Brexit is better understood.
The UK property market is looking increasingly attractive to foreign investors thanks to the country’s current weak currency, with high-net-worth individuals from across the world looking to snap up some Brexit bargains.
It is still too early to predict what impact Brexit will have on property values. A weakening of the appeal of UK investment could drive prices down or a lack of certainty could drive up interest.

“In years gone many international buyers never look past London, but since 2016 other key UK locations have become increasingly popular option for foreign investors looking for value that just isn’t available in London.”

Jonathan Stephens, MD, Surrenden Invest
The February Budget will no doubt affect the market, especially if there are reforms for first-time buyers, however, it’s largely expected that confidence will somewhat return, and house prices will increase.
Whilst there are concerns about the impact of Brexit on the U.K property market, it would seem that for the most part, it’s only a decelerated market from a domestic perspective. Foreign investors are not put off and are instead seeking areas in the UK that secure investments with the greatest possible yield.

For regular updates on Brexit and investing in UK buy to let hotspots, follow Surrenden Invest on social media.

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How will a No-Deal Brexit effect UK Property Investment? Are There Any Positives

Posted on by Charlie Herbert

How Will a No Deal Brexit Effect UK Property Investment? Are There Any Positives.

Let’s assume that the UK and EU cannot agree on the future relationship and the divorce is messy.

Regardless of your position on the debate, it seems inevitable that such a scenario would cause a degree of volatility to both the economy and the property market.
Whilst some in the Brexit camp will be quick to refer to previous negative house price predictions never coming to fruition, this time we would have categorically left the EU.
In other words, we would be entering unchartered territory and housing would be one of the first industries to feel the effects.
There’s little question that an uncompromising no-deal political rhetoric would result in Sterling’s devaluation, the result could be a potential rise in inflation.

“A no-deal Brexit is definitely going to be a challenge for the economy which is why the government is putting together so much preparation, should it come to that. And we’re very clearly focused as a government that we want to get a deal.” 

Amber Rudd, Secretary of State, Department of Work and Pensions.

But are there any positives for the UK housing market from a no-deal Brexit?

Despite concerns over Brexit and reports of falling house prices in July, average property prices are forecast to increase by 1.5% over the next three months. August is set to see prices rise by 3.2% and although this is expected to drop to 1.4% in September, annual growth will be up 3.1% according to the forecast – the most significant annual increase in house prices since last November.
While many areas are expected to see property prices climb in the three months to October, with rises of anywhere between 0.8% in Scotland and 7% in the south-east of England, other parts of the UK may see modest slumps – although taking into account the level of uncertainty surrounding Brexit, the outlook is still positive.
Scrapping stamp duty for downsizers could be a cost-effective way to stimulate activity throughout the market, freeing up family homes and enabling chains of transactions at relatively little cost.
Furthermore, many home buyers may be keen to complete before the 31 October deadline and this surge in transactions could also stir up the housing market.
Potential positives of a no-deal Brexit
  • All of the uncertainty could mean that we’re in for a buyers’ market.
  • Should prices drop, first-time buyers may have the opportunity they have been looking for, particularly if interest rates stay low and the Help to Buy scheme continues. However, one of the consequences of no-deal could be that the mortgage lenders are forced to tighten their purse strings.
  • A weaker Sterling value could turn the UK into an off-shore investor’s delight – particularly as the country will continue to be recognised as safe, transparent destination.
  • Combined with recent announcements to further cut corporation tax, widen the threshold on higher rate income tax and reform stamp duty rates to pre-2007 levels, investment activity in certain sectors may be able to stimulate the property market as a whole.
Although it certainly wouldn’t be plain sailing and many in the Leave camp may feel dissatisfied, this is probably the best outcome.
Furthermore, many home buyers may be keen to complete before the 31 October deadline and this surge in transactions could also stir up the housing market.

“Ultimately, a good deal is all in the details – but clarity in any shape may at least give the economy some breathing space and a sense of comfort about where things are heading. As a result there will arguably be a renewed sense of confidence across the Country in the housing market.”

Jonathan Stephens, MD, Surrenden Invest

For regular updates on Brexit and investing in UK buy to let hotspots, follow Surrenden Invest on social media.

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Manchester buy to let market to thrive as Brexit deadline draws closer

Posted on by admin

Manchester buy to let market to thrive as Brexit deadline draws closer

2018 was an outstanding year for Manchester’s commercial property market which retained the number one position of office take up across the Big Six Regional Cities (Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester).

With the new office space take up predominantly from large companies relocating to the Manchester area, a trend which has continued to grow since 2018. Resultantly the city has seen a massive surge in job creation.
In 2018, 1.75 million sqft of office space was transacted in Manchester across 314 deals, up by 54% on the 10-year average. 2018 top deals included:
This trend continues throughout the 2019 with recent a recent deal (June) by The Hut Group, which took up 280,000sqft and British Telecommunication lined up for over 200,000sqft office space in Manchester centre in Q3 2019.
Since 2015, the city’s population has grown by nearly 6%, according to Manchester City Council. An impressive 65% of graduates of universities in Manchester stay in the city after graduating. Additionally, 36% of people from Manchester who studied elsewhere returned home after graduating. Also many young professionals choose Manchester to seek employment as the city offers rich and diverse opportunities across all sectors.
This has resulted in high demand for residential accommodation in Manchester. The city is undergoing rapid change and growing at a rate of around 2,000 homes per year. This is to house Manchester’s rapidly growing population, which is expected to increase from 530,300 in 2016 to 625,000 by 2025. As the demand for homes continues to rise house prices are expected to go up by 57% by the end of 2028.
This is creating an excellent opportunity for buy-to-let investors looking to address the city’s housing under-supply backlog, with some estimates showing the need for as many as 40,000 additional homes. Manchester’s growth and emerging status as a global city provides all the ingredients to ensure the city remains brexit-proof and continues to grow even through political and economic uncertainty. Brexit negotiations seem to make very little impact, on the property market as overseas investment, mainly from Asia and the Far East reaching the highest level this year.

“With a growing population of young professionals and students, we have identified the ever increasing need for accommodation in areas of Manchester with good transport links, relatively affordable rents and amenities on the doorstep. These areas offer potential for long term demand and continued growth in values. The city has so much to offer. Ideally located, continuously outperforming the wider UK property market, delivering healthy returns for investors and attracting more and more professionals, it is clear to see that Manchester is perfect for prime city centre living to live, work and invest.”

Jonathan Stephens, MD, Surrenden Invest
Located just 10 minutes away from the city centre, the contemporary Middlewood Plaza development with pricing starting from £159,980 has been designed to suit the needs of urban professionals working in both Manchester and nearby Salford. Consisting of stylish apartments, townhouses and duplexes, and located in the popular Salford area, Middlewood Plaza is the ideal investment property for those looking to be a part of North West England’s bright future.

For regular updates on investing in Manchester buy to let hotspots such as Middlewood Plaza, follow Surrenden Invest on social media.

Growth location focus: Manchester

Posted on by admin

Growth location focus: Manchester

Manchester is the UK’s media hub, with MediaCityUK in the Salford area of the city acting as a magnet for creative talent, as well as the ideal incubator environment for new creative and digital start-ups.

As an eminently desirable urban location, Manchester is experiencing rapid population growth. The city’s 2018 population of 553,500 people is expected to grow to 631,500 by 2041 based on current trends – an increase of 14.1% according to the ONS.

“One reason that Manchester is such a key growth location is the city’s unique combination of economic opportunity and superb urban lifestyle. This blended offering led The Economist to crown Manchester as the UK’s most liveable city in its 2018 Global Liveability Index.”

Jonathan Stephens, MD, Surrenden Invest
The Greater Manchester urban area accounts for 40% of total GVA in the North West, making the city the focal point for the entire region. According to Savills, that region will lead the UK in terms of house price growth over the next five years, achieving compound growth of 21.6% by 2023. 2020 in particular looks to be an exciting year based on the Savills projections, with the North West tipped to enjoy house price growth of 6.0% over the course of the year.
Capitalising on this population growth is the Middlewood Corridor located in between Manchester and Salford, The Middlewood Corridor is the largest of three regeneration corridors (with over £1 bn of regeneration planned) that make up an ambitious renewal programme for Manchester and Salford. It is being built around existing retail parks, with regeneration work running from 2015 to 2030.
Middlewood Plaza is located in the heart of the Middlewood Corridor, marking the start of a new era for Manchester’s residential sector and those who invest in it. The development is set to capitalise on the enormous economic potential of the Middlewood Corridor Regeneration Zone, as well as benefit from the host of amenities that the completed district will provide. With prices starting from £157,281 and only 10% payable on exchange, this could be the development that gets you on the Manchester property market.

For regular updates on investing in Manchester buy to let hotspots such as Middlewood Plaza, follow Surrenden Invest on social media.

Buy-to-let Borrowing for an Ageing UK Population

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Buy-to-let Borrowing for an Ageing UK Population

Traditionally borrowing gets harder as you get older, but it is now getting easier to secure a buy-to-let mortgage when you’re over 60. This doesn’t mean over 60s can’t get a mortgage. But lenders might impose an age limit for taking out the mortgage, plus a maximum age for when the mortgage term will need to end.

When it comes to buy-to-let, retired borrowers may have previously found it difficult to secure a mortgage to purchase a buy-to-let property. Lenders were reluctant to offer them finance, particularly if they were still in debt in their retirement.
With around 1,000 mortgage deals available for terms of up to 40 years, which means a buy to let borrower aged 45 years old can easily expect to have a mortgage on a private rented home for 45 years. This seems to be working as the latest buy to let mortgage data from lender trade body UK Finance reveals landlord remortgages are outnumbering loans to buy new homes to let by nearly three to one. Borrowing to buy a new property to rent dropped by 7.7 per cent to 4,800 for the 12 months to the end of February 2019. Remortgages were up 2.1 per cent with 14,400 loans agreed over the same term.

“While theoretically age should not be as big a concern for Buy to Let lenders as for a residential property, the reality is that it is still a factor and many borrowers do face upper age limits. When it comes to BTL mortgages, repayments aren’t usually covered by pension savings or work salary as with residentials. Instead, affordability will usually be determined by the expected rental income from tenants (alongside the usual factors such as loan to value and other individual circumstances).”

Online Mortgage Advisor
Buy-to-let lenders are encouraging borrowers to stay in the market well into retirement as they lift age limits on mortgages. Figures from consumer group Which? suggest two out of three of the 2,057 deals available to landlords have a maximum age limit of at least 85 years old. Some go farther – with 9 per cent offering mortgages to borrowers up to 90 years old and a fifth without any age limit at all.
Age limits might still be a factor, but when it comes to determining whether a buy-to-let investment is affordable or not, many lenders will focus more on the rental cover than the age of the borrower. As long as borrowers can demonstrate that the monthly rent payable on the property is enough to cover mortgage repayments by between 125% and 145%, the investment will be determined as affordable.
With the population living longer, people are still wanting or needing to borrow money for a multitude of reasons. Now lenders aren’t standing in the way as the number of buy-to-let products available on the market is at its highest level since the beginning of the financial crisis in 2007, with many of these products will be available to landlords requiring finance, regardless of their age.

For regular updates on buy-to-let investment opportunities, be sure to follow the Surrenden Invest team on social media.

London House Prices increase as Boris Johnson moves forward with stamp duty tax reform

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London House Prices increase as Boris Johnson moves forward with stamp duty tax reform

As we look towards the October Brexit dead line, what is the current state of the UK property market and what effect has Boris Johnson had in the small time he has been prime minster.

Before Boris Johnson became the new PM, he outlined his plans for an emergency budget which would significantly cut stamp duty and potentially reignite a stumbling property market. As Brexit, economic uncertainty and fulfilling policy pledges play heavily on his mind, overhauling SDLT will undoubtedly be the easiest part of Johnson’s role as PM. In his quest to revive the property market, Boris pledged to overhaul the current SDLT thresholds by scrapping SDLT on properties worth less than £500,000. Currently, only properties priced under £125,000 on all current property owners or a £300,000 threshold for first-time buyers (FTBs) are immune from SDLT. The aim to stimulate the more expensive sections of the property market by reversing duty increases on homes valued over £1.5 million by reducing the 12% duty to 7%.

The Current Market Conditions

  • Average house prices saw an annual rise of 1.2% (to April 2019 Gov.UK House Price Index)
  • Highest level of year-on-year growth in followed by Liverpool (4.9%), Manchester (4.1%) and Birmingham (4.0%).
  • According to the same dataset, London saw a 0% change in house prices. (Hometrack UK Cities House Price Index)
  • Despite the ongoing Brexit-induced pessimism, the latest Royal Institute of Chartered Surveyors (RICS) report stated that there has been an increase in buyer enquiries after declines over the first half of 2019. 12-month expectations are indicating continued growth in sales volumes and prices.
Nevertheless, affluent home buyers pushed the number of deals in central London over £5 million up 12% compared to a year ago, while the number of deals under £2 million rose 16%, according to LonRes. With Boris Johnson beating rival, Jeremy Hunt by 92,153 votes to 46,656 last month, the question on everyone’s lips is whether he will deliver on his promise of cutting stamp duty land tax (SDLT) after October 31st 2019.

For regular updates on property investment in London and other UK regional cities, be sure to follow the Surrenden Invest team on social media.

How long will the London housing market pause for thought?

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How long will the London housing market pause for thought?

There are a number of indicators that the pre-Brexit, pent up buyer demand for London property is shortly to be unleashed. Chestertons’ Winter 2018/19 London Residential Property Market Report asserts that the “bottom of the market may be in sight,” while the rate of decline in the capital’s sales prices have slowed. Indeed, demand at the prime end of the market bounced back during the latter half of 2018.

“We’ve seen many buyers – both owner-occupiers and investors – taking a ‘wait and see’ approach in London as the Brexit deadline of 29 March approached. However, the delaying of that date to 12 April – and the 31 October – is testing purchasers’ patience. Add in the prospect of prices in London bottoming out and we could see a swift and decisive rise in transactions over the coming weeks and months.”

Jonathan Stephens, MD, Surrenden Invest
Prices in London fell during 2017 and again during 2018. Given the ongoing political impact of Brexit on sterling, this has made for some interesting opportunities for overseas investors. With indications that the market is bottoming out, many investors will now be looking to snap up properties at bargain (for London) prices while they have the chance.
At the same time, it’s likely that many of those waiting to buy property for their own use will also act in the coming weeks and months. As Brexit looks increasingly likely to drag on, many would-be purchasers may be prompted to act before London’s prices begin to rise too steeply again. As such, 2019 – or at least the latter half of it – could turn out to be a good year for property in and around the capital.

“Many property investment companies are looking closely at London again right now, as the market correction that has taken place over the past couple of years makes property ownership in the capital more attractive, particularly given the recent upward movement in rents and therefore yields. As such, London and the commuter belt certainly bear watching over the rest of this year.”

Jonathan Stephens, MD, Surrenden Invest
London’s property market is, of course, vast, as is the commuter belt that surrounds the city. Two areas likely to be of particular interest in the near future are Gerrards Cross and Reading, both of which offer a fast, direct commute into central London, as well as a good quality of life for the whole family. If the predictions of the market bottoming out and pent-up demand being unleased play out, it is likely that interest in both of these areas will spike significantly.

For regular updates on investing in London and other key UK cities, be sure to follow the Surrenden Invest team on social media.