Top Buy-to-Let Returns; Manchester does us proud!

Impressions aren’t everything. Investors are now beginning to look way beyond the wealthy, gold-plated streets of London and into more lucrative areas of the country.

The latest data on buy-to-let returns, from lender HSBC shows cities offering the greatest yields (rental income measured against property cost) include Southampton, Blackpool, Nottingham and Hull with many private landlords in these areas owning at least 1 in 4 properties.

Taking a moment of pride – Manchester falls into the top 5 cities offering the greatest yield with a return of 7.98%. That’s number TWO on the list!

So why are these cities more attractive to landlords you ask?

The answer; although London properties offer prosperous returns due to high rental income, the original investment near extinguishes the return. High house prices in the big city crush the yield and limit the return. Therefore, investments into the top yielding locations are much more appealing to landlords thanks to healthier returns and overall more durable investments.

So it certainly pays to do your research, and here at The House Crowd, we’ve done just that from our very first investment. Visit our Why Join? section for more information on the benefits of property investment with The House Crowd.

Information sourced from: http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10859896/The-towns-that-offer-the-best-buy-to-let-returns.html

Slimmer yields for landlords in 2014? Not for our investors…

According to ARLA, the average yield across the country has fallen to around 5.5%. A journalist recently put this point to me and asked (somewhat sceptically) how we could offer much higher yields.

I responded that average returns are just that.  They represent what an average investor buying an average property in an average area could expect to achieve.

That statistic encompasses properties where yields are 1% and properties where they are 14% or more.  We research areas where the average yield is higher and then cherry-pick the best deals in that area to maximise yields.

The criticism is akin to saying “Usain Bolt claims to be able to run 100m is 9.69 seconds but how can that be when our research shows the average time to complete 100m is 14.8 seconds.”

In short, we are not your average investment company.

Having said that, we are susceptible to market conditions as is everyone and as house prices increase at a higher rate than rents, it is inevitable that yields will decrease.

So, does that mean we will not be able to offer our clients such attractive returns?

No.

It simply means we have to adapt. We are experienced in many areas of property investment, are extremely flexible and already have plans in place to ensure that we can still offer you very attractive returns whatever the market conditions.

The new areas we are moving into and the new business model we are launching next month will enable us to continue to deliver well above average returns.

Happy 18th birthday Buy to Let mortgages…

…and thank you for our present – a predicted 11% profit for the next decade according to a recent report.

The findings from the report published in an article by The Guardian identified that with average annual returns of 16.3% (£13,000 profit) on each investment of £1,000 since buy-to-let mortgages were launched in1996, landlords have earned more than they would have done with every other type of investment. These are clearly superb returns.

The report has been timed to coincide with the new affordability rules requiring lenders to carry out detailed checks on potential mortgagee spending and ability to pay if interest rates go up, but buy-to-let investors will be exempt from these rules.

Landlords take one in seven mortgages, and since 1996, lenders have granted 1.5m mortgages worth £174bn to buy-to-let investors. You can read the full article here: http://www.theguardian.com/business/2014/apr/26/returns-for-buy-to-let-landlords-dwarf-other-investments

Buy To Let investors ‘are piling into the market’

Rightmove issued a statement last week saying: “Asking prices for properties new to the market have shot up to hit an all-time record high for March, boosted by buy-to-let investors “piling into the market” with new asking prices 1.7% higher than last month. 
Asking prices are now 1.2% higher than this time last year.”

Miles Shipside, Rightmove director, said:

“Even those who truly believe that the market has turned a corner may be unable to do anything about it due to lenders’ cautious risk profiling, a significant factor limiting the speed and strength of the recovery.

“However, with new sellers asking more than ever before as we enter the traditionally busy spring market, and an expectation among home-movers of price stability or growth, there is now a bedrock upon which confidence and momentum appear to be building.”

Rightmove also said that the average time on the market has fallen from 90 days last year to 80.

 Shipside added: “Whilst it is too early in the year to make estimates about full year transaction volumes, agents are reporting more properties being sold subject to contract.

 However, these prospective buyers still have to complete the potentially treacherous journey through to successful completion. 

More limited inventory for sale by agents means less choice for buyers and is usually a forerunner of increased property prices.

  Shipside said that there are currently “blindingly” good returns on the right buy-to-let investment, and that investors are “piling” into the market as a result. Property investors can get a much better deal than putting money into a bank.”

UK mortgage lending famine harms worse off the most

Figures from the price comparison website Moneysupermarket have revealed the number of mortgages available to borrowers with a 10% deposit is down by more than a quarter in the last year, whilst bank loans supporting buyers with a 5% deposit have dropped by a third in the last six months.

Moneysupermarket’s findings make for uncomfortable reading as stagnant salaries and a lack of job opportunities for those starting out mean more and more people are struggling to save a significant deposit.

It is conceivable that first-time buyers with a 5% deposit may be forced to completely put off the thought of buying until they have at least a 10% deposit saved – or secured parental assistance. There are currently only 28 loan options available to those with a 5% deposit and, in truth, many of these will carry unrealistic qualification criteria. This desperate situation has arisen despite the government and banks recently introducing an £80 billion ‘Funding for Lending Scheme’, designed to boost lending to households and businesses.

The House Crowd offers an alternative solution for first-time buyers struggling to raise a deposit for their first home. For as little as £1000, our straightforward and transparent crowdfunding property investment model provides a typical 12 – 14% return – ideal for growing your deposit in order to take your first step onto the  property ladder.

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit www.http://thehousecrowd.com/thehousecrowd//how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit www.http://thehousecrowd.com/thehousecrowd//about/our-manifesto/). If you’ve read enough and want to invest now, visit www.http://thehousecrowd.com/thehousecrowd//invest-in-property/).

A decade of scant reward predicted for individual buy-to-let investors

The latest analysis by accountancy firm PricewaterhouseCoopers has revealed that UK buy-to-let investors can expect an average return of just 3% between now and 2025.The projected 3% return is calculated before tax, but does take ‘expected’ running costs into account.

Given that many buy-to-let investors were achieving returns of 7% less than a decade ago, PwC’s figures could make for disheartening reading for prospective investors. However, for those with sufficient funds and expertise, the analysis does suggest that including a housing investment as part of a diverse portfolio including riskier assets could strike the right balance.

At The House Crowd, through a mix of informed purchasing and cost-effective renovation, we are able to outstrip average buy-to-let trends and offer our investment partners a fixed annual return of 6% on long term rental projects. In addition, for those wanting short-term gain, our develop and sell projects provide a typical return of 12%-14%.

During a period of what seems like never ending economic doom and gloom, we are delighted to be able to offer investors an option that returns double the UK average – all without the hassle of finding, purchasing and maintaining the property.

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit www.http://thehousecrowd.com/thehousecrowd//how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit www.http://thehousecrowd.com/thehousecrowd//about/our-manifesto/). If you’ve read enough and want to invest now, visit www.http://thehousecrowd.com/thehousecrowd//invest-in-property/).