Great news today reported by Manchester Metropolitan University for those who have bought [tag-tecinvestment properties[/tag-tec] in Manchester. Record numbers of graduates are choosing to reside in the Greater Manchester area following graduation.
The number of MMU gradutes staying in the city has risen from 65% in 2006 to 68% in 2007. In 2007 allone 6,290 graduates chose to stay on.
This is fantastic news as guess where these people will choose to live? Three guesses??
Couple this with the 3 other universities in the area: UMIST, Manchester University & Salford university - what do you think this will do for demand for rental property in Manchester?
Do these people want to live near they work? Do they want to communte? Will they want to rent?
What's Your answer?
They want to take advantage of living and working in the city!!
MMU stated that it believes more than 9,000 graduates a year will stay on if the conditions are right. As I have been saying for the last 5 years this is still an excellent time to invest in property provided you are in it for the mid-long term
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Research from ARLA concluded that 4 out of 10 landlords are planning to add to their property portfolios during 2008. Another finding was that the "average" landlord intends to hold onto the property for at least 16.7 years ( I told you it was a mid-long term strategy!!)
The annual rate of return on buy-To-Let (BTL) property investments was 10.81% (based on a cash investment) but this figure rose to 21.43% on a geared property investment (i.e .one with a mortgage on).
The FT recently reports that landlords are also benefitting from the increased demand for tenants as buyers are delaying moving and are renting instead.
Mortgage Trust customers found that 3 out of 10 landlords found a new tenant in less than a week, while a further 40% found a tenant with one to two weeks. Interesting reading - that meand the average void for people who conducted the survey was 1 week!!
The propertion of landlords who said it took more than 2 weeks was 28%, down from 42% from the previous survey.
What conclusions can we deduce?
1. Rents are rising
2. Rental demand is increasing
3. Property investment offers excllent ROI especially when geared
4. Property is a long-term investment - any market fluctuations will be minimised over the long term
Property Investment isn't dead - long live property investment!!
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Great news - The Bank of England have reduced UK interest rates by a further 0.25% - We are hoping for further cuts to help steady the UK housing market. The inflation targets of 2% (currently 2.5%) are hopefully going to fall in line later in the year. There is certainly a lot of doom and gloom in the press at present - my main point I would like to get accross is DON'T PANIC!!!
The UK housing market is cyclic and the current market conditions are only temporary IMHO.
Property Investment is a mid-long term investment not some "get rich quick scheme"
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From my predictions in January I stated that 2008 would be a year of 2 halves for the UK residential property market. The first 6 months would not be too inspiring whilst the global credit crunch took its effect and was fully understood by the financial institutions. The second half, however would show sogns of a recovery with modest gains.
Robert Houston, CEO of ING Real Estate Investment Management said that his company was poised to make further investments in the UK now that "Value" had returned.
It has been mainly equity rich investors such as German Funds and the brave hearted, that have continued to take advantage of the current market conditions.
With that said, we are now beginning to see manistream investors return to the market with many predicting property prices rises during the second half of 2008.
Houston satated that now yields of the IPD index had reached 5.25% he felt that it represented the UK markets "fair-value" and felt that prices were set to rise over the next 6 months.
My personal view is that the last quarter of 2008 and 2009 will show gains and mixed with the potentially lower cost of borrowing it offers investors a truly "Golden Opportunity".
Investors who are obsessed about picking the exact tops and bottoms of a market will always miss the boat. Property, as the saying goes, is not just for Christmas……
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Despite the doom and gloom merchants out there thinking that the UK housing market is in a tale spin - the more serious and experienced amongst us know that the current market conditions are only a temporary blip and indeed offer some of the best opportunities available in recent times.
According to ARLA ( Association of Residential Letting Agents) the BTL (Buy-To-Let) market is booming.
UK rents have typically risen by 2-4% in the last 3 months!!
Ian Potter, Head of ARLA Operations comments "We are seeing the beginning of the inevitable - whenever property prices soften rental demand, rents and rental yields always increase."
He goes on to further comment "…it is inevitable that our member letting agents should report that they have more tenants than properties available for them"
ARLA also highlighted that the increase in immigrants is helping boost the UK buy-to-let housing market .
If there were ever a great time to start buying investment properties its now - why?
1. Rents are rising
2. UK Population is rising
3. Interest Rates are falling
What do you think will shortly happen??
It doesn't take a rocket scientist!! Property Investment still works!!
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My career, after spending nearly 12 years in the textile trade in the UK, was at a cross-road to say the least. The UK textile industry was on the floor and I had to take stock of my future. Each year, my ability to earn, was becoming more and more difficult – talk about 1 step forwards two steps back!!
I must have spent literally thousands attending every property investment conference and seminar there was about making money. Things even as sexy as cleaning wheelie bins for a franchise fee of over £15,000!
The one thing that kept on coming back to me each and every time was how much money I had made in equity in my house over what were only a few short years.
I attended 2 very expensive property investment seminars in 2000/2001, spending in excess of £7,500. Did I learn anything from them? Yes – they were certainly excellent things to get me motivated but I couldn’t help wondering that each time I woke up on a Monday morning after spending the weekend at a seminar, had I really got the tools and confidence to go out into the big, bad world and do some deals.
It took me over 6 months, 973 telephone conversations and nearly 7000 miles to attend meeting with developers to strike my first off plan property deal. Was it worth it? I’ll tell all in my next instalment……
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I have recently read the RICS (Royal Institute of Chartered Surveyors) property forecast for 2008 – interesting reading I thought.
Although there is at present a “credit-crunch” within the finance sector – I feel in the next 3-6 months, once its full extent has been fully understood, it will be yesterday’s news.
Interest rates are set to fall possibly to less than 5% (SWAP rates confirm this trend), there is a shortage of housing in the UK and the general economic outlook is robust. Although the next 12 months will be more challenging, there are numerous opportunities that will surface. Rents are rising so the effect of lower interest rates and higher rents create a “Golden Scenario” for property investors.
First Time Buyers are showing a strong pent up demand which provides a great support for the overall property market.
Recent surveys by Mortgage Express have indicated that over 40% of landlords are looking to expand their property portfolios in 2008.
My main criticism is of the popular UK press and their doom-monger journalists who have been so contrary in predicting a housing price crash for the last 5 years. Yes, it does sell papers but does nothing to create wealth for anyone.
In the longer term if prices should stall or fall slightly what do you think will happen to rental demand? Derrrrrrrrrrrrr – Go UP!!
My predictions for 2008 are – property prices will increase by around 3%, interest rates to 5% (or better) and rents will increase by 5-7%.
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In all my dealings when buying property NEVER pay the asking price on ANYTHING – (and I’m not just talking about investing in property!!). I know this sounds pretty obvious but you’ll be surprised how many times pay the asking price. If you only got say 1-2% off the price for everything you bought over the course of say 5 years how much do you think you could save? I recon that in the course of 2 years alone I have saved close to £25,000 by just asking for a better price. This does not include the £000,000's I save for my clients and myself on property deals
Remember – the profits are also made when you buy not just when you sell!!
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Many of my clients have had great successes with purchasing 1 bed apartments in city centres. There are several reason that they work really well and offer a slightly easier accessibility to buyers i.e. entry costs tend to be lower than traditional 2 bed apartments.
Approximately 46% of ALL new dwellings are 2 bed apartments, with about 5% of new builds being 1 bed.
For investors with several properties a balance of 1 and 2 beds spreads risk.
Furnishing costs are usually less and often they fall below the current stamp duty threshold.
From a resale perspective, many first time buyers will be able afford 1 beds.
New Build and off plan property are low maintainence and relatively hassle free
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Take a look at this really interesting web site I have just found. It shows how SWAP rates are falling http://www.swap-rates.com/UKSwap.html. This is great news for us all especially property investors. Whilst I'm no great technical analyst I know that it clearly shows future sentiment regarding how interest rates should look moving forward to the future.
Property Investing does require a degree of nerve - especially with all the negative sentiment currently being discussed in the press. As I have always stated if you wish to invest in property you should consider a strategy of mid-long term ie a 5-10 year window. If you invest with this sort of view all the "see-saws" that happen in any dynamic market will be eradicated.
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