Southampton performs well in the league tables, but don't be fooled by averages ( you can have your head in the oven and feet in the freezer - on average your temperature is OK but you are dead! )

The towns that offer the best buy-to-let returns

Rental returns on buy-to-let are biggest in regional centres like Southampton, Manchester and Nottingham – where one in four homes are now privately rented

Expert management: insured landlords can receive free business legal advice from Direct Line's helpline Photo: (c) Nick Free

By Nicole Blackmore

12:22PM BST 28 May 2014

3 Comments

Property investors are looking way beyond London and identifying regions where yields are almost three times as high as in the capital. Cities offering the greatest yields – rental income measured against the property's cost – include Southampton, Blackpool, Nottingham and Hull.

The latest data on buy-to-let returns, from lender HSBC, also shows the proportion of property in each area already owned by landlords. And in many of the top-yielding areas private landlords already own one in four properties, or more.

Southampton, with rental yields of 8.73pc, currently tops the list for rental returns. Manchester, Nottingham, Blackpool and Hull complete the top five locations with the best rental yield at 7.98pc, 7.67pc, 7.63pc and 7.47pc respectively. In all of these areas, except Hull, private landlords already own one in five properties, or more.

These areas also offer the characteristics that make for excellent buy-to-let investment, the experts say: relatively low house prices coupled with strong demand for rental property from large student and young professional populations.

Top 10 buy-to-let hot spots by rental yields

Rank	Location	Housing privately rented (%)	Average house price	Average monthly rent	Gross rental yield (%)
1	Southampton	23.42	£143,011	£1,040	8.73
2	Manchester	26.85	£104,244	£693	7.98
3	Nottingham	21.64	£86,000	£550	7.67
4	Blackpool	24.16	£77,899	£495	7.63
5	Kingston upon Hull	19.02	£68,243	£425	7.47
6	Coventry	19.02	£110,029	£650	7.09
7	Oxford	26.11	£254,514	£1,489	7.02
8	Portsmouth	22.28	£146,709	£795	6.50
9	Liverpool	21.75	£91,175	£494	6.50
10	Cambridge	23.91	£185,414	£1,001	6.48

The lowest yields were registered in areas such as London where recent price rises have been large and rapid, outpacing the growth in rents.

In London in particular, there is a higher proportion of rental property than elsewhere, with 38pc of property in Westminster, for example, being privately rented.

Worst 10 buy-to-let areas by rental yields

Location	Housing privately rented (%)	Average house price	Average monthly rent	Gross rental yield (%)
Kensington and Chelsea	33.97	£1,236,605	£2,968	2.88
Thanet	21.96	£189,362	£524	3.32
Hastings	27.19	£184,787	£520	3.38
Haringey	30.33	£425,541	£1,200	3.38
Westminster	37.56	£890,272	£2,578	3.47
Hammersmith and Fulham	30.05	£685,797	£2,004	3.51
Richmond upon Thames	20.55	£540,379	£1,699	3.77
Camden	30.46	£715,831	£2,383	3.99
Ipswich	18.75	£158,925	£546	4.12
Lincoln	19.36	£124,789	£433	4.16

Peter Dockar, head of mortgages at HSBC said: “House prices in the top-yielding locations – while still out of reach among many first time buyers – are relatively affordable for landlords investing in property and the demand from young professionals has pushed up rents and driven up the returns.

“London is often seen as the haven of property investment with many believing the streets are paved with gold. However, while the highest rents in the country are an attractive draw for landlords, high house prices in the capital squeeze yields and limit the returns available. As a result, returns can often be far more attractive in other areas so it certainly pays for landlords to do their research.”

HSBC's report draws on official data from the Office for National Statistics and Land Registry with rental data coming Home.co.uk.

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

Why Southampton landlords should use Belvoir Lettings

Southampton property of the week

A really nice large and bright top floor 1 bed flat close to the central train station and the city centre with allocated parking. It is well positioned to service the General Hospital and universities and offers good access to the road network. It will rent for around £650 pcm and will produce a gross yield of 6.25% based on the asking price of £125k.

Southampton Landlords will interest rates of 3% become the new norm?

Interest rate of 3% could become new norm, suggests departing Bank of England man Charlie Bean

By THIS IS MONEY REPORTER

PUBLISHED: 16:24, 25 May 2014 | UPDATED: 16:28, 25 May 2014

Interest rates are likely to settle at around 3 per cent over the next three to five years, according to outgoing Bank of England deputy governor Charlie Bean.

His prediction that rates could hover at a lower level than during the pre-crash period came amid suggestions the move away from the historic-low 0.5 per cent base rate could begin sooner than expected.

Bean, the deputy governor responsible for monetary policy at the Bank, told BBC Radio 4's The World At One: 'The Bank rate averaged about 5 per cent in the decade or so before the crisis.

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Rock bottom rates: Members of the Bank of England's monetary policy committee voted unanimously in favour of leaving interest rates on hold at 0.5 per cent earlier this month

'It's reasonable to think that, because of the headwinds that are still out there as well as some the global forces ... perhaps the level that we go to three or five years out might be a couple of percentage points below that.'

Members of the Bank's monetary policy committee voted unanimously in favour of leaving interest rates on hold at the same level since 2009 earlier this month.

 

But minutes of the meeting showed there was less agreement on the course for future rates. The first hike had been not expected until the second quarter of next year, or late in the first quarter.
Bean suggested it could start earlier with some 'baby steps'.

'There's a case for moving gradually because we won't be quite certain about the impact of tightening the Bank rate given everything that has happened to the economy,' he said.

'It might not operate in quite the same way as before the crisis. So that's an argument, if you like, for being a little bit cautious, moving in baby steps to avoid making mistakes.

'But of course if you want to pursue that strategy you need to start taking those baby steps a bit earlier, otherwise you end up being behind the curve.

'But there are arguments on the other side. In particular, one of the risks about moving too early is that you potentially forgo some activity that you might otherwise have had.

'One of the key issues for us will be whether we see some recovery in productivity which has been unusually subdued in recent years.

'It may be that if we nip the recovery too early we won't see that productivity rebound.'

Read more: http://www.thisismoney.co.uk/money/news/article-2638823/Interest-rate-3-new-norm-suggests-Bank-Englands-Charlie-Bean.html#ixzz32w5o53L5
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http://www.thisismoney.co.uk/money/news/article-2638823/Interest-rate-3-new-norm-suggests-Bank-Englands-Charlie-Bean.html

Southampton Landlords it's all about quality tenant selection

Blackpool “tenant from hell”

Friday 23rd May 2014

A Blackpool landlord has taken his tale of tenants from hell to the local newspaper.

Sean Feeney rented out a property in Westmorland Avenue, Blackpool, to a mother and her three children. However he told the Blackpool Gazette he believes many more people could have been staying there.

Feeney faced a £2,000 cleaning bill when the family moved out after finding the property strewn with rubbish, dirt and graffiti.

Other Blackpool landlords have reported similar stories of being left to pick up repair bills stretching into thousands of pounds.

Feeney told the Gazette: “I spent £5,000 before re-renting it and they have vandalised it and left it in a sorry state, but the council have given these people a brand new council flat.

“The whole house is pretty much ruined. It will have to be gutted, and the last time this happened it cost £1,000 to take everything to the tip. I don’t know how people can treat a property like this then get a new one.

“The council should have had a look at my property, then told them they weren’t entitled to another one. I will easily have to spend another four or five thousand pounds on it. I don’t know how the carpet has got into that state – it looks like they have had cattle in there.”

http://www.landlordtoday.co.uk/news_features/Blackpool-%E2%80%9Ctenant-from-hell%E2%80%9D

Meet the team at Belvoir Lettings Southampton and learn how they go about their business

Great video showing how a professional letting agent goes about their business with a great culture and exceptional customer care

Earlier rate rise may be needed, warns CBI

Interest rates may need to rise sooner than expected to offset the impact of the UK’s overheating housing market as the economy’s growth accelerates, business leaders have said

London house prices have risen 25pc on their 2008 high, fueling speculation of a bubble. While housing transactions are currently running at 30pc below their 2006 peak and, nationwide, prices remain around 2pc down on 2006, the market is picking up pace. Property prices are set to increase by 8.2pc this year and 5.1pc in 2015.
According to the Confederation of British Industry (CBI), this could force the Bank of England to raise interest rates in the first three months of next year, before the general election, as opposed to the third quarter previously forecast. This has been echoed by economists, who claim that Bank governor Mark Carney will confirm interest rises on Wednesday, when the bank lifts its growth forecasts as part of its scheduled inflation report.
The CBI upgraded its GDP predictions from 2.6pc to 3pc for 2014 in its growth forecast, released today. Next year, the economy will expand by 2.7pc, rather than the 2.5pc previously forecast, it added.

http://www.telegraph.co.uk/finance/economics/10823094/Earlier-rate-rise-may-be-needed-warns-CBI.html

House price heatmap: it's still winter in the regions, so where does that leave Southampton!

A respected group of economists, the OECD, has called on the British authorities to rein in house price growth. It is the latest in a series of warnings which suggest that house price inflation poses a threat to Britain's economic recovery.

But how much have prices really grown?

Outside London and the surrounding regions, prices remain some way below their 2007 peak, as this map – produced by property adviser Savills and based on the latest Land Registry data from March this year – makes clear.

http://www.telegraph.co.uk/finance/personalfinance/houseprices/10812771/House-price-heatmap-its-still-winter-in-the-regions.html

Mortgage Market Review slashes home lending

The Mortgage Market Review (MMR) has hit house purchase lending, which fell for the third consecutive month in April.

Home lending has now fallen 17% in three months, according to new figures from e.surv, which said the MMR is largely to blame.

House purchase approvals dropped 6% between March and April to 63,170.

That means there were more than 13,000 fewer home loans in April than in January, when 76,251 loans were approved.

House purchase approvals are still 15.3% higher than 12 months ago, but recent monthly falls are stalling the market recovery.

http://www.estateagenttoday.co.uk/index.php?option=com_k2&view=item&id=795:mmr-slashes-home-lending&Itemid=583

House prices up 8.5% year-on-year

The latest Halifax house price index shows that despite the average house price falling 0.2% in April, prices are up by 8.5% on year-on-year, at an average of £177,648.

The bank said demand for housing "remains strong", and that while monthly figures could be volatile, quarterly figures gave a better impression of the underlying trend in the market.

Stephen Noakes, mortgages director at Halifax, said: "On an annual basis, housing demand still remains strong. Housing demand continues to be supported by an economic recovery that is gathering pace, rising consumer confidence, low interest rates and wage growth finally beginning to outgrow consumer prices.

"However, with supply of properties being slow to respond to market conditions, stronger demand in the past year has resulted in upward pressure on house prices."

Commenting on the figures, Rob Thomas spokesperson for estate agent haart, said only London-centric commentators believe there may be a housing bubble expanding in the UK.

“The latest intervention from Bank of England’s deputy governor Sir Jon Cunliffe warns that ‘the growing momentum in the market is now…the brightest light on [the] dashboard’ for policymakers watching for signs of an overheating economy,” he said, “It’s not difficult to see why someone sitting in Mayfair, Westminster or Threadneedle Street might be starting to worry. Fuelled by the global super rich, Prime Central London property prices started recovering in 2009 and now stand some one-third higher than at their previous peak.

“But what’s the true story away from this Monte Carlo-on-Thames of prime Central London? According to our own national data, which most recently showed average UK property prices at £195,511, prices are still not recovered to their peak 2007 levels. This is supported by the Halifax house price index quarterly and monthly releases, which show that property prices remain lower in the first quarter of this year than at their peak more than seven years earlier in every region of the country – yes, every region including Greater London. The national average property price released by Halifax today is still well below 2007 levels.”

Thomas added that while London’s strong recovery has brought prices to within a whisker of the previous peak, the idea of a bubble must seem like a “bizarre joke” to anyone who bought a house in 2007 in much of the rest of the country. House prices are 18% off their peak in the North and a massive 53% lower in Northern Ireland.

“Perhaps it’s inevitable that, after the embarrassment of failing to see the financial crisis coming, the regulators would feel the need to have their finger on the trigger, itching to apply the weed killer at the first green shoots of recovery. But they do need to remember that spring always comes early to London.”

Judge rules in favour of squatter

A squatter has won a landmark victory for "squatter's rights" after seeking possession of a run-down property he has lived in and renovated - despite residential squatting being "criminalised" by the Government.

Keith Best applied to register title to 35 Church Road, Newbury Park, Ilford, east London, on the basis that he had been "in adverse possession", also referred to as "squatter's title", for a period of 10 years ending on the date he made his application.

The Chief Land Registrar blocked Mr Best's application relating to the three-bedroom, semi-detached house.

The registrar said he could not allow time to run for registration of title by adverse possession because section 144(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPOA) has made residential squatting a crime, instead of just a civil offence, since September 2012. Read more at

https://uk.news.yahoo.com/judge-rules-favour-squatter-124309211.html#udWRrc5

SAFEagent awareness week

Landlords please make sure you use a SAFE Agent for all your property dealings this will ensure you will be dealt with professionally, you will have a redress system and your funds will be safe. And I am pleased to say that Belvoir Lettings Southampton has always been a SAFEagent.

Properties In Hinkler Road Area Outperform Hedge End Housing Market By 50%

Following a discussion with a local landlord who lives in the West End area of Southampton, in the nice area between Church Hill and Chalk Hill, we got chatting about the Hedge End property market and how it was so opposite to the Hinkler Road area of Southampton. Interestingly, he had a couple of properties in both areas and, after reading my “Southampton Property Blog”, wanted some advice on where to buy next.

I did a comparison between the two and was surprised to find that the property market in the Hinkler Road area had outperformed the Hedge End market by 50%!

The 3-bed semis at the Thornhill Park Road end of Hinkler Road, built just before the war, sell for between £145,000 and £160,000 depending on condition. However, further down the road there are the local authority built properties. Often built to high standards, 3-bed terraced houses achieve around £110,000 to £120,000 and the semis for £125,000 to £135,000 (again all dependent on condition and exact location). When you consider that the rents that can be achieved for these properties are in the early £700s per month this gives us a yield of 6.5% to 7% per year. That means Hinkler Road is the best investment, especially when you consider it compared to property in Hedge End where the average value of a property is £243,500 and the average rent is £901 per month, giving us an much lower yield of 4.4% per year (around 50% more).

This, however, is a great example of annual yield/return not being the only factor when choosing an investment property, as you should also consider how much the value of the property goes up in the long term. In the last 10 years, property values have only risen by around, on average, 22% in the Hinkler Road area, which is worse than inflation. Therefore, in real terms, whilst as an investor you are achieving an excellent yield, this is at the expense of having a depreciating asset in real terms. Hedge End values have risen by 63% in the same time frame. So, if you are investing in Southampton property, do you want capital value or yield?

As we don’t sell property, we can help you to find the best investment property for you with our specialist lettings advice. It is in our interest that you buy a property which will rent well and for long periods of time. If you would like any advice on choosing properties, come and see us at our office on London Road or contact us at 023 8001 8222 or email us at southampton@belvoirlettings.com

Labour pledges to reform rental sector - what will this mean for Southampton Landlords!!

Ed Miliband has announced plans for longer tenancy agreements and rent increase cap if the Labour Party wins the General Election next year.

In a policy designed to be one of the most eye-catching elements in his campaign to tackle the "cost of living crisis", the Labour leader has pledged to make it more difficult for landlords to evict tenants or raise rents.

Miliband’s policy has three main points:

1. There will be three-year tenancy agreements beginning with a six-month probationary period allowing landlords to evict a tenant if they are in breach of their contract. This would then be followed by a two-and-a half-year term in which tenants would be able, as they are now, to terminate contracts after the first six months with one month's notice.

2. There will be a ban on what Miliband will today call "excessive rental increases". Labour says it will be guided by the Royal Institute of Chartered Surveyors, which is examining options for a new rent benchmark. This could be linked to average rent rises or inflation or a combination of the two.

3. Labour will ban letting agents from charging tenants fees for low level services, such as simply signing a tenancy agreement. They will instead have to ask landlords for fees.

http://www.landlordtoday.co.uk/news_features/Labour-pledges-to-reform-rental-sector

Southampton property .. how affordable is it?

I had an interesting chat with a gentleman, who lives in Rownhams, who dropped into our office whilst his partner was visiting at the South Hants Hospital. He is thinking of buying his first buy to let property and he wanted my opinion on the state of the market and if it was a good time to invest.
He was particularly worried that, with all the newspaper headlines of a booming housing market, there wouldn’t be any demand by tenants. 

One piece of advice I give to those looking to invest in property is a simple trick of the trade. You can judge the affordability of an area’s property market (and thus how much demand to buy there could be) by simply finding the ratio of the average property price to the average salary. The lower the ratio the more affordable property is. When we put this to the test, we found that, as a whole, Southampton currently has an average property value of around £232,200 with the average salary being £21,840. This is a ratio of 1 to 10.63 and, in fact, is slightly above the UK national average of 1 to 9.46, which means you have got to look hard to find value. 

However, the issue isn’t just affordability, it is also about raising the deposit. Even with the government schemes reducing the deposit to 5%, when you take into account the fees this cost would be in the region of £13,600, based on the average property value. Purchasers can afford the mortgage payments, but their inability to raise the money for the deposit is driving demand for rental property. Therefore, until 100% mortgages return, demand will continue to be very high for rental properties. It is also worth remembering that not everyone wants to buy a property. Renting gives people great flexibility. We currently have a significant pool of tenants who are eagerly looking for quality accommodation throughout the Southampton area. 

It’s important to buy the right type of property in the right location that will appeal to a wide tenant pool. If you are someone thinking of investing in the rental market, please contact me by phone or call into our office on London Road so we can help you explore the market fully.