0:03 AM, 25th July 2024, About A year ago 1
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Properties in areas with high rental demand command a significant price premium – which could be up to 34% higher than regional averages, research reveals.
The data from London estate agent Benham and Reeves shows these areas are attractive investment targets for landlords.
Despite challenges facing the buy to let sector, the firm highlights the resilience of property prices and enduring strength of the rental market.
With yields reaching 5.49% in high demand areas, versus 5.15% in other areas over the past five years, the firm believes BTL remains a solid investment.
Marc von Grundherr, a director of Benham and Reeves, said: “Things may not have been easy for buy to let landlords in recent years, as increased rules and regulations have been implemented to reduce the profitability of the average investor’s portfolio.
“However, it remains a strong and reliable investment, with long-term stability that often cannot be matched by other more volatile investment asset classes such as stocks or collectables.
“Of course, where you invest is as important as what you invest in and identifying high demand areas is vital when maximising the returns available.”
He added: “What’s more, investing in a high rental demand area is also likely to protect the value of your investment in the long run, with properties in these locations commanding impressive premiums when compared to the wider region.”
In the North West, the average house price in high rental demand areas is £289,863. This is a premium of 33% (£72,338) compared to the region’s overall average price of £217,525
The North East house price premium is 30%, and in Yorkshire and the Humber it’s a premium of 29%.
The premium also exceeds the national average in the South East (28%), and West Midlands (25%).
Even in the East of England, where the high rental demand price premium is at its lowest, homes still sell for an average of 15% above the wider regional average.
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Member Since October 2013 - Comments: 1557 - Articles: 3
10:23 AM, 25th July 2024, About A year ago
A yield of 5.49% isn’t viable unless you can stick in for the long term, keep costs and voids to a minimum, and rely on capital appreciation… when you will be hit by CGT.