Manchester Property Market Growth at 12 Year High

Manchester Property Market Growth at 12 Year High

Latest figures released by the Hometrack Index show Manchester property market growth to have hit a 12 year high in 2016. This gives the city the second highest rate of price growth in the UK, next to Bristol.

A rise of 8.9% year-on-year for Manchester was reported, with experts predicting that the city will overtake Bristol for pole position by the end of the first quarter of 2017. The figures for Manchester exceed the average year-on-year increase across the UK, which came in at 7.7%.

Strong market fundamentals, particularly a significant supply/demand imbalance in Manchester, keep pressure on prices high. Despite the same supply/demand imbalance in the capital however, London dropped to seventh place for price growth in 2016.

Strong Market Fundamentals Keep Manchester Property Market Growth Thriving

Manchester’s vibrant rental market is also thriving, with demand continuing to grow. This, of course, makes it a dream opportunity for buy-to-let investors. Indeed, the city was recently named the UK’s buy-to-let hotspot by HSBC. This is all despite the massive challenges faced by buy-to-let investors following the government’s attacks on landlords.

The growing popularity of property crowdfunding is helping prospective buy-to-let investors push back against these attacks, providing a welcome haven for those keen to benefit from a steady stream of secured rental income.

Register Now for more Info

Rental growth here is 13 times that of London, driven by the growing population of young renters, flocking to the city for studying and career opportunities. Manchester boasts 60% more 25-29 year olds than the UK average, placing it within the country’s fastest growing demand for short term lets.

Massive Investment In Manchester Fuelling Property Market Growth

Success is also compounded by the government’s whopping £7 billion investment in Manchester. Determination to develop a world-class infrastructure in the city will attract further billions of worldwide investment over the coming years, which is already evident as overseas investors hone in on the investment opportunities offered here.  

Over 100,000 students across Manchester’s four main higher education institutions give it the highest student population in Europe.

70,000 of these are not in student halls of residences, meaning they are renting privately within the city. This makes it prime territory for PBSA (Purpose Built Student Accommodation) investment.

Across the board, from the UK-leading purchase market, to the thriving private rental and student markets, right through to commercial investments, Manchester is winning. As growth in the city’s property market continues at an unprecedented pace, with huge investment fuelling projected growth for years to come, we remain confident in the continued promise that our city offers investors.

View our Property Investments

Traditional Property Investment versus Property Crowdfunding

Traditional Property Investment Versus Property Crowdfunding

Property crowdfunding and traditional property investment have some significant differences. The main difference is to be found in the nature of managing the investment.

Whilst those who favour traditional property investment value the sense of control associated with full ownership of a property, there are significant costs and time commitments involved in maintaining their investment, Property crowdfunding on the other hand is to a very large extent a passive investment with thord parties managing everything on your behalf. So if you do not have the time, nor the resources, to keep up with the demands of building a property portfolio it can be a very attractive option.

There are also additional financial implications to consider, and we will go into these in this article.

Register Now for more Info

Responsibility

Property crowdfunding eliminates many of the responsibilities involved with traditional property investment. An investor wishing to create a properly diversified portfolio of properties will invest large sums on a smaller range of properties, and will be responsible for everything from biological disruptions (by infestation of plant or animal life), to managing tenants and weathering void periods on a rental property. With a crowdfunded property investment, none of these aspects apply, as they are taken care of by a third party.

Find out more by registering here.

Furthermore, the due diligence, prequalification and vetting of an investment property are all handled by the SPV (Special Purpose Vehicle), the company behind the purchased property.

If, on the other hand, you have the skills and experience necessary to avoid mistakes and handle the investment on your own, then traditional property investment will probably be a lucrative way to grow your money. That being said, you will need substantially more money in the first place in order to make your first investment purchase.

Fees and Costs

There’s also the matter of fees. A traditional property investor will have to contend with solicitors’ fees, mortgage broker fees, loan arrangement fees, and surveyor charges, for example. With property crowdfunding, these fees are included within the overall cost required to sell the property, as listed on the crowdfunding platform’s website.

It’s also worth learning from the mistakes many property investors made ahead of the 2008 property crash. Many found that their mortgage lenders had allowed them to leverage at a rate that exceeded their affordability. The banks then revalued people’s assets, leading to a swathe of repossessions, subsequent catastrophic loss, and bankruptcies.

Checking the small print and getting legal advice when investing with the traditional property investment model is wise. Then again, none of this applies to property crowdfunding.

This is, of course, a worst-case scenario for traditional property investors. It is, nonetheless, one that still bears some weight. If mortgage rates rise, those who have invested with a mortgage may find themselves out of pocket. Buy-to-let investors should take the obvious step of making sure that their monthly rental income covers, at the very least, their mortgage repayments by at least 130% and should factor in potential mortgage rate rises.

Find out more about our current property investment options.

Buy-to-let landlords have also been hit by changes in Government legislation that have removed the ability for these landlords to deduct interest from profits from their tax liability, which can prove a further obstacle to ensuring the profitability of their investment. Again, there are no such risks with property crowdfunding, which usually buys properties for cash with no or minimal borrowing.

Challenges and Rewards

Whilst there are challenges involved with investing in property in the traditional manner, there are also a great many rewards. First of all, rather than earning a percentage of returns based on your initial investment sum (as with crowdfunding), once all outgoings (such as loans and legal fees, for example) have been taken into account, an outright property investor could earn a potentially much higher return.

There is, however, a downside to this. Where a traditional investor leverages a lot of cash, the risks to the investment are increased dramatically. Should the investment value fall, they could stand to lose a very significant amount. Whilst risk is, of course, not negated with property crowdfunding, no mortgage is necessary.

Selling Your Investment

Another benefit of traditional property investment is the control over when to sell the investment. If you are able to sell at a profit, and as quickly as you require, then the power is in your hands. Property crowdfunding, on the other hand, usually requires a majority vote from all shareholders if you wish to sell before the end of the investment term.

View our Property Investments

To Conclude

Property investment, whether traditional or crowdfunded, has long been a profitable investment choice. Whilst both forms of investment carry risk, there are significant pros and cons on both sides, which potential investors need to factor into their investment decision.

Weighing up which type of property investment is right for your particular needs is key to ensuring that you are confident in where to place your money. At the end of the day, however, whichever path to property investment you choose, there is potential for great returns.

HMOs: Targeting Young Professionals in Shared Accommodation

Specialist commercial lender, Shawbrook Bank, has released a report highlighting HMO Investment Growth as a result of the increasing popularity of shared accommodation.

Young professionals, as you may already be aware, are focusing more on the rental sector. Of course, this is partially down to high house prices. However, the report notes that this demographic are sticking to the rental sector, and shared accommodation in particular, due to the capacity for higher levels of disposable income.

A further survey undertaken by Spareroom.co.uk, which studied 10,000 tenants living in shared accommodation, found over 70% of participants to be under the age of 30, with over 50% identifying as ‘single’.

The combined factors of high house prices and desirability of higher disposable income is compounded by the importance of social life to this group. The Millennial generation is one where friends and fun are key to life satisfaction. It’s no wonder then that living with a group of friends is the accommodation choice for young professionals and recent graduates.

HMO Investment Growth Fuels Landlord Interest

From the property investor’s point of view, HMOs, therefore, are becoming an increasingly popular choice of investment. Compared to other buy-to-let investments, HMOs yield an average of 10% per annum. This compares favourably compared with the 6-7% rental yield to be expected from standard buy-to-lets and blocks of flats on a single freehold title.

With HMO Investment Growth fast coming under the radar of landlords, competition is stiff. As such, investors seeking to cash in on these high rental yields are increasingly finding ways to set their property apart from the rest.

Higher spec HMO properties are springing up, particularly in the popular urban centres favoured by shared accommodation-loving young professionals. Included wifi, flat screen TVs in communal areas of the property, high quality fixtures and fittings, and other features perceived as appealing to their desired tenants, are outlays investors are prepared to make in order to reel in those 10% yields.

Shawbrook’s report concludes with these words:

“Demand for this asset class is on a consistent upward trend… with the supply/demand challenges across the UK housing landscape, and the resulting importance of the Private Rented Sector, HMO property is and will remain an essential and affordable source”.

That being said, local authorities are quickly catching on. Licensing schemes for HMOs are being considered and implemented in some areas, which will limit the number of such properties available in particular districts. As such, anyone considering HMO investment will need to look into this before deciding on their purchase.

Register Now For More Information

Westminster Prices Falling

 

 

Westminster Prices Falling

I am not sure if this should really be called ‘the sound of the suburbs part two’ or try and think of something clever about the smartest parts of London not looking like the smartest places to invest in property nowadays?
According to the leading property services group LSL the house prices in areas such as Kensington and Chelsea have fallen by up to 22% since autumn 2014.

A report from LSL identifies that the areas of Kensington and Chelsea alone had seen prices plummet by 16% since a peak in September 2014.

Prices in Westminster were seen to fall by around 22% between a peak in November and the end of May 2015 which has been blamed in part on the December introduction of changes to stamp duty which penalises expensive properties.

Changes to stamp duty have meant that the average priced property in Chelsea or Kensington will see an increase of around £120K in stamp duty whilst buyers of properties worth less than £937K will now pay less stamp duty than they used to. This has resulted in the market slowing down and more importantly (according to the RICS) housing stock levels falling.

As we reported recently this has once again lead to increases in the suburbs both in London and other areas of England and Wales as the popularity of moving out of the city centres and taking advantage of improving transportation networks and more importantly affordable properties kicks in.

The RICS now predict that the shortages in housing stock are likely to cause house prices to rise in England and Wales by a whopping 25% over the next 5 years.

It is reported that prices in thirteen of London’s suburbs have now seen prices hit new highs, away from the South East, the strongest growth was expected in north-west England, home of The House Crowd as a result of the government’s northern powerhouse initiative perhaps this will grow again if/when the HS2 rail links are completed?

You can read more about the strengthening Manchester economy in our guides, simply click here to download the packs.

 

 

House Prices On The Increase

 

 

House Prices on the increase (at last!)

Finally house prices are on the increase!
According to reports taken from recently published Land Registry data it has been identified that the average price of homes in both England and Wales has almost reached the similar figures to those of the 2007 market when prices were at their peak.

The Land Registry data generally showed a 5.1% annual increase in house prices to take the average value of properties to £179,817. It should be noted that this is less than £2,000 from the £181,014 peak which was recorded pre economic slump back in November 2007.

Semi-detached houses were seen to be the main catalyst in the house price growth. Prices for Semi-detached properties were reported to have been generally rising by 5.6% over the course of the year. The market for flats/apartments saw an increase of 5.4%. This increase saw the flat/apartment market growing such and becoming the second largest in the housing sector.

Regionally there were no major surprises when it came to house prices where the London region recorded the biggest increases (up by 10.1% over the previous 12 months) whereas Wales by contrast saw an increase of just 0.3% although cities such as Cardiff and Swansea have reported 11.2% increases.

One area that has seen a high % growth in house prices a little closer to House Crowd HQ is the South East Manchester district of Trafford. Possibly not the best news for first time buyers in the area but there has been an increase of 9.2%. The proximity of Trafford to retail hubs such as the Trafford Centre, the introduction of the Metrolink tram system linking the commuter belt with the Manchester city centre and the regeneration and relocation to Salford’s Media City by the BBC will no doubt have influenced these increases.

 

Keep an eye on the latest House Crowd investment opportunities on our website pages and make sure that you are signed up to receive all our early bird notifications through social media channels.

 

 

This Is The Sound Of The Suburbs

 

 

This Is The Sound Of The Suburbs


Recent figures show that house prices in central London are starting to fall and the suburbs are becoming the place to be. Homes in Kensington and Chelsea have already seen prices fall by 1.6% during February and March 2015 as people head to the commuter belt for a more affordable lifestyle and more importantly affordable property prices.

 
The upcoming introduction of the Crossrail link has been seen as a major influence in the sudden increase in house prices in the suburbs where the popular areas of Greenwich, Reading and Bracknell in particular are now becoming very popular with commuters.

 
Prices in Greenwich have risen by a reported 18.8% recently, Bracknell which is close to the M4 in Berkshire has seen annual rises of 13.6% and figures in Reading are reported to be in the region of 13.5%. Cheaper house prices and improved transportation links to the centre of London are being seen as a major factor in these new commuter areas becoming more popular and this has lead to some parts of south-eastern England seeing annual rises in house prices of more than 13% each year.
Figures made available by the Land Registry have shown that prices in some parts of Outer London have increased by nearly 20% a year again swelling the movement out to the suburbs and increasing prices in these now popular commuter belts.

 
Similar can be said for Manchester where the expansion of the Metrolink tram system into East Manchester and beyond has lead to rises in house prices of 9.2% in both Trafford and Salford.
The areas are also popular with our own House Crowd property team when they select new investment opportunities and the introduction of the BBC and Media City to the newly regenerated Salford area will also have contributed to these rising prices in what were unloved parts of Manchester.
If you are a regular House Crowd investor you will no doubt be aware that we have been selecting our portfolio of properties in these parts of Manchester always keeping one step ahead of the new markets.
North of the border figures reported by the Registers of Scotland showed that in East Lothian at the eastern fringes of Edinburgh property prices had seen an increase of 28.6%.

 
However the same cannot be said for all parts of the UK, in the north-east prices were seen to fall 4% during the period February to March 2015. An example of Darlington, County Durham was reported by the Land Registry to have seen prices fall by 6.2% over the last year.
 

The housing experts are now expecting that the average house prices will rise by 5-6% during 2015 partly due to the cost of borrowing remaining low and introduction by lenders of products such as a 1.09% 2 year fixed rate mortgage deal.
 

Keep an eye on the latest House Crowd investment opportunities on our website pages and make sure that you are signed up to receive all our early bird notifications through social media channels.

 

 

The Early Bird

 

Early Birds

Ever wondered what the little bird character is that we have started to feature on our website and social media?

EarlyBird

The little character is our ‘Early Bird’ and he’s here to make sure our investors know when our new projects are going live.
We hate it when people miss out on our new projects and often get asked if we give priority to existing investors or if it’s a case of first come first served.
Here at The House Crowd we operate on a first come first served basis.
With the introduction of the ‘Early birds’ we have now tried to make it as fair as possible and having listened to our investors we have introduced a few new ways of alerting them of our new property crowdfunding projects.
We have designed a great new feature for each project which details a few bullet points describing the property, some of the numbers and of course a few photographs.

Are you a Facebook user? If you are then why not pop over and like our Facebook page, you will then be able to tick the box which gives the option to ‘get notifications’ then every time we upload a new project ‘Early bird’ on Facebook you will get an alert!

The same goes for the people who follow The House Crowd on Twitter where we will be uploading our early bird alerts to advise when we are launching a new project.
For those who don’t use social media keep an eye out for our emails from Frazer who will be keeping everybody up to date on our upcoming property crowdfunding opportunities.

 

4 Macro-Economic Factors That Can Affect Property Prices

 

4 Macro-Economic Factors That Can Affect Property Prices

According to an article by RICS UK residential director Andrew Bulmer there are 4 factors affecting property prices which you can use to help you buy properties that will increase in value.

 

  1. Housing shortage:
    We all know there is a housing shortage in Britain at the moment, every politician, pre-election reminds us this by donning a high viz vest & trying to lay a few bricks under the eye of a nervous assistant and a chuckling bricklayer.  This simple supply and demand for housing stock directly pushes up the prices of properties. It’s the same with supplying housing stock to the Local Authorities and a contributing factor to the areas in Manchester where The House Crowd choose many of their properties.
  1. A growing city
    As our investors know, The House Crowd’s core business is buy to let properties in Manchester.
    The city is now one of the country’s buy-to-let hotspots. The city’s population has grown by 11% between 2001 & 2014 and with hubs such as the BBC at Salford’s media city it is probably the top relocation destination for businesses moving away from London. This strengthening market is of course music to our ears as far as both our single let properties and HMOs are concerned!
  2. Planned transport links and transport infrastructure
    We all love to complain about traffic, especially in Manchester where the M60 seems to be getting more like the M25 carpark everyday. Over the next five years, £530M of government investment will be flowing into North West transport links these infrastructure improvements will eventually deliver improved connections to work and leisure destinations around the city. The improved transport hubs will again influence property prices once the improved infrastructure and connections are in place.
    It’s well documented that in London, property prices within a 10-minute walk from Crossrail stations have risen even faster than average London property prices.
  3. Gentrification of an area
    We all know about the ‘Waitrose effect’ where changes in urban community lifestyle and an increasing number of wealthier residents lead to increasing property prices. Most estate agents will tell you how the introduction of a Waitrose and the gentrification of an area suddenly turn a leafy suburb into the next place to be therefore increasing property values. In these locations undergoing gentrification, the average income increases. Poorer pre-gentrification residents who are unable to pay increased rents or property taxes find it necessary to leave.

RICS UK residential director Andrew Bulmer commented: “It comes down to the economy. London 30 or 40 years ago was a little bit grotty. As the city became wealthy and powerful that wealth rippled out.”

But if you are going to play that game you really need to get to grips with your local areas and understand what is making your city tick.

There is a concept called ‘the new build premium’. When a house has never been occupied it has an attraction to buyers. And that is logical, because a new house should be low maintenance. Once it becomes second hand, it obviously won’t attract a new build premium.”

 

Why Should I Be Interested In An HMO?

What is an HMO?

A House of Multiple Occupancy or a property shared by at least 3 tenants (not members of the same family) forming one household where the tenants share bathroom and/or kitchen facilities.

Also known as Renting by the Room!

Renting by the room is a great way of maximising your property returns. HMOs can generate 2-3 times the income of the same property let as a single unit.

The big PLUS of multi-occupancy is they are rarely empty. If one tenant leaves there’s no panic as you’re still receiving rent from your other tenants whilst you look for a replacement.

Since 2008, HMOs have been very popular with investors looking to compensate for their flat-lining capital growth and for good cash flow.

With average UK rental yields at approximately 5.8% then a 12% yield for houses let by the room is a really attractive proposition for many.

Ok, Give Me a Real Example…

You own a 4-bed house that typically commands £1000/month if it was tenanted by a family. Convert one of the reception rooms into an additional bedroom and rent each room out at £400/month and your monthly income has now jumped to £2000. Convert two of the reception rooms and you’re now receiving £2400/month!

Why Should I Be Interested In An HMO

Share this Image On Your Site

Give Me Some More Good News

  • Cheaper Living for Tenants
  • Letting to Professionals

Who’s A Typical Sharer?

  • Young people leaving home and unable to access home ownership or social rented accommodation.
  • Professional House Shares – professionals wishing to live near their place of work
  • The over-45s -renting on their own is becoming unaffordable as rents rise and salaries stagnate or drop.
  • Graduates who want the flexibility of where they work and to prolong the student lifestyle by house sharing

What’s Driving Demand for HMOs?

  • Restricted borrowing from banks for traditional house purchases
  • Changes in housing benefit rules – since January 2012 under-35s only receive financial help for single rooms in shared houses rather than sole occupancy flats.
  • Rising rents for whole properties.
  • Rising cost of utility bills
  • Flexibility and convenience – no need to worry about buying appliances, furnishings or paying bills.
  • The Friends/This Life factor – young people like the social aspect of sharing

Hold On! If It’s So Attractive Why Isn’t Everyone Doing It?

Nobody said it was easy to get to right. It is considerably more complex and much harder work than buying and managing a single let property. You need to take into account:

  • Planning issues
  • Licensing
  • Refurbishing to a legal standard
  • Cleaning and maintenance of communal areas
  • Management issues
  • HMOs are most definitely ‘hands-on’
  • BUT – invest via The House Crowd and you can leave all that to our Management Company. You do not need to do anything.
  • I’m Still Interested…How Do You Do It Well?

Before embarking on a HMO, know your market and area. As you’ll have a higher turnover of tenants make sure your target audience is in plentiful supply. If you’re seeking young professionals, ensure your property is near employment and public transport.

Marketing your HMO is more time consuming than a sole occupancy and managing an HMO can sometimes feel like running a small hotel. You’ll be responsible for finding tenants either through local advertising or an agency (not all agencies are prepared to do HMOs due to the hassle factor.)

All tenants will need thorough referencing – are they in work, ability to pay, any past problems with previous tenancies, CCJs?

Choosing the right mix of tenants isn’t easy either. Think about the dynamics of the house – although there’s no guarantee of harmony you’ll need to exercise your judgement on personality types.

Summary of Benefits

  • As a multi-occupancy your property can generate 2-3 times more income than a single-let.
  • Avoiding the voids! HMOs are rarely empty which means continuous flow of income.
  • A fast growing market due to rising demand for private room rentals.
  • Professional tenants are reliable – they’re likely to stay at least one year or more before career climbing and moving on and their ability to pay is good.

2013 Boom in Residential Development Projects

More good signs in the housing sector as the value of private residential property development projects is showing a double digit year on year increase. The number of projects starting on site is up 15.2% compared with the same period in 2012.

The figures from construction industry analysts Glenigan indicate that the UK construction sector has seen a rise of almost 1.9% in new build projects commencing in the three months to May 2013. And these improvements are firmly led by growth in the private housing sector.

Gains have been focused in London and the South East, but increased activity in Yorkshire and the South West in April are further signs of a recovery. And a number of £100m+ private housing projects will give those behind the Government’s Help to Buy and NewBuy schemes further cause for positivity.