It cannot be disputed that London plays a big part in the property investment industry. Property prices remain high, but the same goes for rent, in certain areas.
In Totally Money’s Buy-to-Let Rental Yield Map 2018/2019, East Ham, Hammersmith and Thamesmead are the best buy-to-let areas in London, bringing in a rental yield of 4.81%, 4.47% and 4.46% respectively.
However, it is becoming clearer that growth in the private rented sector (PRS) is becoming prominent in the areas further afield. Buy-to-let investment is picking up in regions across the UK, out-performing activity in London areas. Nottingham in particular has been highlighted as an area to keep on eye on.
Totally Money’s map puts Nottingham in the top spot for best buy-to-let areas in Britain. With an average yield of 11.99% for properties for rent within the NG1 postcode, landlords are sure to be interested in buy-to-let investment opportunities in the area. The average asking price for a property in NG1 is £152,631, with the average monthly rental value at £1,525.
The postcode of L7 in Liverpool takes second place, with a yield of 9.79%, and TS1 in Cleveland is third, at 9.45%.
At the recent ProCon (Property and Construction) Nottinghamshire event, key speakers discussed the investment option of build to rent in the regions, as well as its increasing popularity.
James Mulcare, Land Director of Godwin Developments, was one of these key speakers. He said: The build to rent and PRS started in London, with international investors feeling comfortable with the capital. But then their sights turned to the regions. Now it is the regions that are hugely benefiting, and this is set to continue.
“Major regional cities like Nottingham, Derby and Leicester are seeing a huge growth in both PRS and build to rent.”
In relation to residents choosing to rent over becoming homeowners, James said: “We are seeing more interest from families wanting to rent because it’s easier when they choose to be close to amenities – such as schools and leisure.”
What are your thoughts on build to rent? Do you feel that it is more or less of a sound investment over buy-to-let?
If build to rent is to take a more dominant position in the property investment industry, then this may provide a key opportunity to get the design of new builds right for the contemporary renter.
James Badley, Architectural Director for firm rg+p, which specialises in build to rent, also spoke at the event. He said: “As most residential accommodation is moving towards the upmarket hotel feel, it is very important that there is the high quality entrance space, high quality entrance space, high quality lounge space and outside space – with design not just dedicated to one area of the building.
“We have to provide high quality, robust, design which is attractive to tenants for a long-term proposition. People want to live in communities and when designing buildings, we have to be sure that we are providing solutions which will be here for many years to come.”
Another speaker at the ProCon event was Matt Hannah, Head of Agency at Nottingham real estate agency Innes England.
He commented: “PRS and BTR is happening and it is here to stay and major urban centres like Nottingham is going to see a lot more. People’s habits are changing. Rather than buying property, the demand for rental property in the UK is on the rise.
“That means that investors have an appetite for long term stable income with improved yields in the regions.”
Paul Seddon, director of planning and regeneration at Nottingham City Council, said: Nottingham has a strong local long-term economy and it is getting stronger. A once in a generation transformation is happening in Nottingham.
“From a PRS and BTR point of view, we need more of it. We are at the start of creating a market and we are willing to flexible. We want to try and help schemes happen. We want quality and we want to ensure that we have the office developments we need as well.”