London has always been seen as the best place to invest in rental properties, but is it the lucrative choice it’s been painted as?
For many years, London’s property market has been seen as one of the most lucrative and safest investment options for those looking to buy. After all, the way it rebounded in the aftermath of the recession in 2008, and the fact that it has seen property prices climb at record levels ever since shows that it is one of the very best places to buy.
But are there actually better options than the capital for those looking to invest?
In recent years, emerging markets, or regional markets as they have become known, have come to the fore and proved themselves as being excellent investment options for those looking to get into property markets and make strong returns.
Experience Invest looks if it is a better idea to look outside of London, and why is this the case?
One of the best reasons to look outside of London for property investment options at the moment is that there are opportunities to get yourself stock without the sky high prices that come with buying in the capital.
We all know that prices in London are absolutely premium, but did you know that you can get equivalent property elsewhere for so much cheaper?
According to the latest figures, the average property price in the UK sits at around £360,000. But it’s when you split London from the rest of the country that you really see the gap between the two.
For investors buying in central London, the average property price is around £750,000. Meanwhile, someone buying the equivalent in Birmingham, for example, could get themselves onto the ladder for as little as £172,000.
While London may have been home to the most impressive rental increases for some time, the emerging markets are now seeing themselves welcoming in some of the best rental prices relative to their investment costs. What this means is that buyers are able to welcome fantastic returns on investment if they buy in the right areas and take a chance buying outside London.
Examples of where this has already come true include the likes of Manchester, Birmingham, Brighton, Bristol, Liverpool and a range of others, where rental yields have exceeded seven, even eight per cent.
These yields are higher than in recent years, and far better than can be found in some of the more expensive areas of London.
Property developers like Experience Invest, sell off plan property with assured rental returns for a set number of years. This strategy can make their developments more attractive to investors.
Demand outside of London for rental property has been climbing markedly for a number of reasons, making regional buy-to-let a fantastic opportunity for those looking for somewhere to buy.
Good examples of this are in Manchester, where there has been a real climb in demand since the emergence of Media City brought the BBC and other large media companies to Salford over the last few years, and Leeds, where the regeneration of the Clarence Dock area has brought about a change in companies operating there. In the last year alone, both Google and Sky have announced their intentions to set up shop there.
Both of these scenarios are great examples of why areas outside of London are fantastic property investment options, because when there’s a rise in businesses such as these coming to an area, they bring with them a swell in both student and young professional tenants, which means rental demand climbs.
This is something that has been happening across the regional sector for some time, and which is likely to continue in the future as businesses see the potential for a future away from London.