Streetwise Property Alert 30th September 2013

Welcome to today’s news and views. The Exeter student accommodation deal is now live and we can provide masses of materials for anyone who may be interested in this investment. As ever, email back.

Student BTLs

New research from Zoopla reveals the student property investment hotspots. The top ten, from one to 10, Glasgow, Hull, Manchester, Cheltenham, Cambridge, Buckingham, Luton, Bristol, Lincoln and London. The basis of the findings? Zoopla takes the average asking prices for four-bedroom properties within major student centres and compares these with average student rents achieved to give a gross yield.

Lawrence Hall of Zoopla says, ‘The largest number of students or most prestigious university clearly isn’t necessarily best for investment returns. Landlords need to do their research and take into account the student demand, property supply, average property values and average monthly rents.’

‘There is no apparent North/South divide when it comes to student buy-to-let investments and a number of towns in the North are showing higher gross yields than the South as a result of property values having remained lower over the past few years whilst rental demand has increased.’ Have to say these findings are a little at odds with what we normally see – London usually comes top – but they are, as ever, food for thought.

New BTL Fixes

Paragon has six new BTL fixes for the professional landlord market. The new product range consists of six, two-year fixed-rate buy-to-let mortgages. Three of the new products are for self-contained, single unit properties at an ICR of 125 per cent at product charging rate or 5 per cent – whichever is the greater. The range also includes three identically priced products for landlords looking to purchase HMOs or multi-unit blocks with a 130 per cent ICR at 7 per cent. Rates for the new products start at 4.50 per cent with a maximum loan-to-value of 75 per cent for all products. The 5.99 per cent fix for HMOs/multi-unit blocks has a zero product fee.

‘These new products have been designed for professional landlords who are looking to grow their portfolios at a time when confidence is returning to the buy-to-let market more generally. Landlords operating at the professional end of the market usually have more bespoke requirements and are investing in more niche properties so we have tailored three of our new products specifically for HMOs and multi-unit blocks.’ As always, do your due diligence, tall to a broker etc.

Student Investing

Going back to student investing and to show you how perfectly respectable organisations can provide conflicting information, we note the recent report from Savills which ranked university towns in terms of their appeal to investors. Savills picked nine locations as offering the best opportunities. These are Bath, Brighton, Bristol, Cambridge, Cardiff, Edinburgh, London, Oxford and St Andrews.

At the bottom of its list are smaller, more rural university towns such as Carlisle, Farnham, Ormskirk and Pontypridd. Neal Hudson of Savills says, ‘The calibre of the university is important, but you do have to take into consideration wider market forces such as property prices and demand.’ More to come.

Finally, we are looking at the idea of a regular monthly get-together for members in London on a Saturday where we would chat through, with various guest speakers, the latest topics, upcoming news and share one or two exclusive opportunities. Let us know if this might interest you. There would be a limited number of spaces. All for today, see you tomorrow.

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