Property Prices Continue to Rise in the Midlands

Property Prices Continue to Rise in the Midlands

 

How to find investment property

Property prices in the Midlands have been steadily rising and according to official figures last year it was one of the fastest growth areas.

The East Midlands has risen higher than the West Midlands but both have grown over 6% which is great news for investors who bought in this area. It is not too late to take part in this growth as prices are likely to continue to rise for a few years. The proposed HS2 rail link and some regeneration projects are likely to help the area as a whole.

Where to Invest

Not only is the Midlands recording exciting growth figures, the rental yields are also high. Nottingham is one of the higher rental yield areas in the UK with an average above 6%, making it a popular investment area. What more does an investor want – high yields and high capital gains can’t be bad? Rents have increased in Nottingham over the past year.

There are some areas around Nottingham that are exciting too because of regeneration and proposed HS2 rail-links. These include Stapleford and Trowell among others.

Nottingham also has a popular university and a large hospital with lots of trainee nurses and doctors so if you are into HMOs and you buy in the right place, you are likely to be onto a winner as long as you do the sums!

Birmingham remains a popular rental area too and growth is good.

Be Aware of Licensing

Nottingham is one of the cities that has agreed to introduce Selective Licensing for landlords which is likely to come into effect in the Spring of 2018 so this, along with tax changes for landlords may have prompted higher rents over the past 12 months. The proposed licensing with cost landlords between £400 and £655 per property, depending on whether they are accredited. Accredited landlords will get the lower fees and accreditation is free at present. See the Nottingham City website for details on accreditation.

Birmingham and Walsall are consulting on selective licensing so its just a matter of time before it is introduced in those areas. It was always likely that councils would jump on the licensing bandwagon after the introduction in Wales. The pricing structure is so variable that it might be better if the government were to introduce an England-wide scheme so that prices would be consistent as councils seem to be testing the waters as to what they can get away with charging.

If you are considering investing in any of these or any other area in England then it is worth contacting the local council to see what plans they have in place regarding licensing and factor in the extra costs.

As far as I am aware landlord license fees ARE tax deductible – every little helps!

Where to look 2018

The Midlands and the north remain the higher growth and higher rental yield areas – I would certainly avoid the south!

Liverpool is a growth area with good yields but there are huge numbers of building projects in the centre which may lead to over-development and over-supply in the future. This may not be the case due to demand but it is something to bear in mind. If too many people jump on a bandwagon it will eventually collapse! Having said that there is a lot of investment going on in Liverpool with construction of a new port allowing bigger ships to provide a more competitive route to international markets according to the developers.

Leeds also remains interesting for investors with large universities and part of the HS2 rail-link. There are major regeneration plans proposed to take advantage of HS2 so the city is well worth considering as an investment for the future. Yields and capital growth are good. Leeds and Nottingham are both bidding to be European Capital of Culture for 2023 but this will depend on whether the EU allows the UK cities to continue with their bids.

There will be many other cities that are worth investing in and I will be updating my book on how to find investment properties in the UK towards the end of summer. The previous book remains relevant for this year though and I don’t foresee any major changes to be honest. Time will tell!

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