Category: June
Welcome to the exciting world of property investment
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
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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Manchester buy to let market to thrive as Brexit deadline draws closer
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
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.
London House Prices increase as Boris Johnson moves forward with stamp duty tax reform
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.
The investment case for Luton
The investment case for Luton
Luton is a growing town that is known for being one of London’s most sought-after commuter locations. Indeed, Jackson-Stops has just flagged it up as the top commuter hotspot for 2019 and the town is fast becoming a favourite with property investment companies. Here’s why.
Luton is located 30 miles north west of central London. Direct trains run into London St Pancras International in as little as 22 minutes. 167 trains per day provide an almost round-the-clock service. Rents, meanwhile are around 1/3 of the cost that they are in London. For renters, it is the ideal combination.
Not only that, but London Luton Airport (the fifth largest in the UK and the fastest-growing major London airport) provides the town with easy, fast access to a wide range of European destinations, as well as select locations in Africa and the Middle East.
“Life in Luton means easy access to the best that London has to offer but without the capital’s extortionate housing costs. The town has excellent amenities with a lively local culture that appeals to those looking to balance access to London with a realistic lifestyle. This is one of the reasons that Luton exhibits such excellent growth potential.”
Jonathan Stephens, MD, Surrenden Invest
Luton’s population is increasingly rapidly. Between 2018 and 2041, the Office for National Statistics projects that the town’s population will grow by 12.9%, to 248,500. At the same time, it is in the grips of a serious housing shortage, as is the case with many towns and cities in the UK. However, Luton’s housing shortage is worse than most, with Project Etopia projecting that it will be 22.1 years behind where it needs to be in terms of housebuilding by 2026, if the current rate of development continues. At present, Luton is building 430 new homes per year – it needs to be building 1,417 to meet demand.
This housing shortage spells good news for buy to let investors, as it points to a long-term, sustained level of demand for private rented accommodation in Luton, as tenants seek to snap up those homes that are available. It also has the potential to drive up house prices (as well as rents and yields). Luton is already bucking the trend in terms of house price rises. While many southern locations are seeing a market correction at present, with falling prices or nil growth, Luton’s prices rose by 1.6% in the year to April 2019. Savills, meanwhile, projects growth of 9.3% in the five years to 2023 for the South East region.
In terms of its rental market, Luton enjoys an average rent of £632 pcm for a one-bedroom apartment and £828 pcm for a two-bedroom one, according to Zoopla – significantly less than equivalent homes in London.
“It is Luton’s combination of capital growth potential and pent-up demand for private rented sector homes that has caused the town to top LendInvest’s UK buy to let index for so much of the past three- or four-year period. This is a town with outstanding growth potential. Watch this town and watch this space to take full advantage of what Luton has to offer in the very near future!”
Jonathan Stephens, MD, Surrenden Invest
For regular updates on investing in UK buy to let hotspots such as Luton, follow Surrenden Invest on social media.
Is property investment the key to retirement for Millennials?
Is property investment the key to retirement for Millennials?
It’s fair to say that Millennials have had something of a raw deal when it comes to their finances. According to Brookings, median household wealth for Millennials in 2016 was 25% below that of those who were a similar age back in 2007. The global financial crisis has held them back in terms of salary growth, but it’s far from the only factor. Growing levels of student debt have played a large role, as has an inability to climb onto the housing ladder.
The result is that Millennials are facing a number of issues, both in terms of current wealth creation and future prospects. Not owning property means no capital growth. The increasing prevalence of self-employment more often than not means a lack of savings for retirement. Interestingly, though, this doesn’t mean that Millennials are unable to use the property market to their advantage.
“Millennials face a number of economic hurdles, but property investment doesn’t have to be one of them. The average UK property costs eight times the average salary, according to the ONS, but the right buy to let home in the right area can cost considerably less. It can also generate a healthy income, as well as the potential for capital growth.”
Jonathan Stephens, MD, Surrenden Invest
The Tannery, in Liverpool, is a key example of the potential that property investment holds for Millennials. The apartments are available from just £85,000 – far below the UK average property price of £226,798 (Land Registry figures, March 2019). With a turnkey management solution in place, there is no burden placed on investors in terms of time, meaning that Millennials looking for an alternative to traditional pension arrangements would do well to consider such a property’s potential.
Buy to let mortgages are subject to affordability checks, just as mortgages for first time buyers are. They also consider the potential rental income of the property in question. Surrenden Invest’s mortgage calculator is a great place to start for those just looking into this (whether Millennials or not).
“The world as we knew it has changed when it comes to property ownership. We’re seeing more people renting and for longer periods, but that doesn’t mean that they need be denied the opportunity to profit from property. It’s just that doing so may look different in the future. Property investment companies need to work with Millennials to encourage that to happen.”
Jonathan Stephens, MD, Surrenden Invest
For regular updates on investing in property UK regional cities, be sure to follow the Surrenden Invest team on social media.
Luton’s dynamic business environment and what it means for investors
Luton’s dynamic business environment and what it means for investors
Luton is a large town in Bedfordshire, some 29 miles northwest of London. It has a diverse economy that has built on the town’s industrial past while embracing new sectors and technologies. This exciting business environment, combined with the town’s affordability and proximity to London, is causing investors to look closely at Luton right now – so that’s precisely what we’ve done!
In terms of its business environment, Luton’s principal employers, after the borough council and Luton and Dunstable University Hospital NHS Foundation Trust, are those whose businesses relate to aviation: Aircraft Service International Group, EasyJet, Menzies Aviation, TUI and more all employ between 1,000 and 2,000 people. The University of Bedfordshire is also one of the town’s notable employers, with a similar number of staff.
As well as the aviation industry, Luton has a thriving new enterprise scene. So much so, in fact, that the town ranked fourth in the Lambert Smith Hampton UK Vitality Index in 2018 – the first time it had been included in the report. Lambert Smith Hampton analysed 66 towns outside of London in order to identify those that provide the greatest opportunities for businesses expansion and are best positioned for growth.
“It’s great news to see Luton ranking in The Vitality Index’s Most Entrepreneurial list for the first time and it’s testament to the inward investment that it is attracting, as well as the commitment to improving the local economy.”
Lloyd Spencer, Head of Office for LSH Milton Keynes and Luton
Luton ranked highly due to its supportive business environment and high number of new enterprises per capita (it had the highest number out of all 66 locations). London Luton Airport Enterprise Zone – one of only a couple of dozen enterprise zones in the UK – played a key part in the ranking. The enterprise zone, which was announced in late 2015, has attracted more than £1.5 billion in private sector investment, creating thousands of jobs and driving forward a programme of local infrastructure enhancements.
“What we’re seeing in Luton is a town that already has a busy economy thanks to the presence of London Luton Airport, but one where entrepreneurial spirit is flourishing as well. For buy to let property UK investors, this is excellent news, as Luton has all the right elements to draw in bright, talented young professionals and thus fuel demand for centrally located rental homes.”
Jonathan Stephens, MD, Surrenden Invest
Those founding their own companies are benefitting from Luton’s enterprise zone effect. The June 2018 Luton Gross Disposable Household Income report, from Luton Business Intelligence, reveals that earnings from self-employment have risen in relation to the national average in recent years, as the town’s entrepreneurs play their part in its economic success.
Not only is Luton well regarded for its entrepreneurial credentials, the town also ranks highly when it comes to environmental issues. The UK Vitality Index placed it fourth in its top ten greenest locations ranking, with Luton performing well in areas such as CO2 emissions per capita, energy consumption and household recycling.
Those looking to capitalise on Luton’s superb market fundamentals are invited to consider The Orion. Just minutes from Luton station and town centre, the development is ideally positioned for those commuting into London, as well as those working in Luton itself. The one- and two-bedroom apartments have been designed with luxury firmly in mind, with high specifications that will appeal to tenants looking for contemporary homes in a great location. Prices start from £172,900, which is 10% below the value of comparable homes on the market.
To find out more about investing in Luton and other UK regional locations, be sure to follow the Surrenden Invest team on social media.
Growth location focus: Birmingham
Growth location focus: Birmingham
The UK’s population is booming and one result of this is a severe shortage of housing in many areas. Coupled with a shift away from home ownership and towards private renting, particularly in urban areas, this has created a number of key rental market growth locations. Birmingham is a prime example.
“Birmingham has the ideal combination of factors to make it a buy to let property UK investment hotspot. The city’s population is growing rapidly and the rate of house building has lagged behind the level of demand for new homes for many years. At the same time, urban regeneration work in the city centre is creating a number of sought-after locations, with renters wanting to be close to the heart of the action.”
Jonathan Stephens, MD, Surrenden Invest
According to Surrenden Invest’s report on National Growth Locations, Birmingham’s ambitious, large-scale regeneration projects, such as the £1.5 billion Birmingham Smithfield redevelopment, are drawing renters to the city centre in their droves. Meanwhile, the city’s established economic credentials (centred around manufacturing, retail, tourism and financial services and, more recently, creative and digital/tech businesses) are creating plenty of employment opportunities.
The West Midlands as a whole has a bright outlook. Savills has projected compound growth of 19.3% over the five years to 2023 for the area’s house prices. Birmingham is the region’s shining star. In fact, it the city has outshone many other urban areas in the UK over the past few years, with prices there rising faster than in any other UK city since the UK’s EU referendum in 2016.
Birmingham’s population is growing hand in hand with its house prices. The city is known for its youthful population, with the Birmingham Economic Review 2017 naming it the youngest major city in Europe. Nearly 40% of the population are under the age of 25. There were some 1,147,300 residents in 2018, according to the Office for National Statistics. That figure is set to rise to 1,313,300 by 2041 – growth of 14.5%.
“Birmingham’s economic credentials are backed by a strong cultural offering. This is a city with a vast amount to offer its young population, which is why it is enjoying such sustained popularity, particularly in terms of city centre living. Successful housing developments are those which meet not just the needs but also the aspirations of those young people.”
Jonathan Stephens, MD, Surrenden Invest
No.76 Holloway Head is one such site. The development enjoys an outstanding city centre location, just a couple of hundred metres from Birmingham’s upscale Mailbox and within two minutes of Birmingham New Street Station, Grand Central and the Bullring – the ideal spot from which to enjoy a luxurious urban lifestyle. The one- and two-bedroom homes, with their spacious, elegant interiors, provide the perfect upscale residence for ambitious young professionals looking to make the most of life in prime central Birmingham.
