Lowdown On Leeds – London of the North?

Millennium Square & Civic Hall

Leeds is one of the most well-known cities in the North of England and an increasingly popular place to live and work. The history of Leeds spans more than 800 years, and a whole host of fascinating things have occurred in and around the city. Let’s see what draws so many people to the West Yorkshire city right now. Looking for an investment opportunity in Leeds? Visit our property investment in Leeds section to see what’s available now!

Things to do in Leeds

Some of Leeds’ most popular tourist attractions include Millennium Square, which is found just outside the railway station and is a short walk away from the City Museum, Civic Hall and the Town Hall. A large number of events take place in the square each year, with high-profile sports events playing on the big screen and an outdoor ice rink welcoming skaters in the school holidays. The Royal Armouries Museum is one of Leeds’ best-known attractions and is home to military hardware that dates back hundreds of years.

Music, theatre and TV

The city is also known for its cultural scene, with key venues including the West Yorkshire Playhouse, the Grand Theatre, the 02 Academy, the Brudenell Social Club and the First Direct Arena. Leeds Festival takes place every August Bank Holiday Weekend at Branham Park, with a number of lower-key festivals also occurring throughout the summer. Soap fans should be left mesmerised by the Emmerdale Studio Experience, which was made open to the public a few years ago. The indoor sets are based at the ITV complex on Kirkstall Road, though you can also stroll through the outdoor set at the Harewood Estate around three miles away.

Lowdown On Leeds - London of the North? Aspen Woolf

Image Credit: Francisco Perez

Shopping in Leeds

The Kirkgate Market can be found in a charming Edwardian building in the centre, although some stalls are now located outside due to its growth over the years. The market is home to 200 stalls, including places to stock up on clothes, jewellery, local produce, hardware and cuisine from around the world. The Victoria Quarter is what has helped Leeds become known as “the Knightsbridge of the North”. The quarter is one of various elegant shopping arcades that you’ll see around the city, with brands including Harvey Nicholls, Louis Vuitton and Vivienne Westwood all having a presence here. Even if you’re not shopping for high-end clothing and accessories, you can still admire the stunning architecture whilst enjoying a latte or two at one of the various cafes and restaurants.

Victorian grandeur

Shoppers looking for something a little out of the ordinary are well catered for by the Corn Exchange. This circular building also dates from the Victorian period and was once a farmers market. Today, it’s a great place to purchase all manner of strange and wonderful accessories as well as musical instruments, clothing and goods for the home. Known as a quirky, ‘alternative’ place to shop, the Corn Exchange is home to far more independent retailers than well-known brands.

Nightlife in Leeds

Leeds also has a great reputation when it comes to cuisine and is home to a large number of authentic South Asian restaurants and acclaimed Italian, Japanese, Thai and British-orientated eateries. Partygoers are well catered for across the city centre, but one of the biggest hubs for nightlife is Call Lane, which plays host to a diverse mix of electrifying clubs and bars. Leeds has recently been tipped for the highest growth in house prices across the UK, with JLL predicting growth of 17.1% by 2023, a figure that could see it leapfrog Manchester and Liverpool. Leeds offers a diverse mix of housing, including luxury city centre flats, sprawling rural homes, terraced, semi-detached and detached properties, catering for a wide range of budgets. Leeds is also gaining a greater reputation as an exciting place to do business. New data from Data Commons for UK tech found that investment into the tech companies of Leeds broke Northern investment records in 2018, with the figure standing at £108.8m. It’s also possible to reach London from Leeds within as little as 2 hours and 10 minutes.

Quirky facts about Leeds

The oldest flying aeroplane in Britain was built in Leeds. The Blackburn Type D was built by Robert Blackburn today, and you can still see it in action today, albeit in Bedfordshire. The deal to bring Cluedo to the masses was signed in Leeds when games maker Waddington was based there, eventually being made available in 1949. Another fact you might be surprised to learn is that the second ever Ryder Cup actually took place in the Moortown area of Leeds back in 1929.

Steeped in history

Marks & Spencers actually started life in Leeds, at Kirkgate Market. The brand was first launched as a penny bazaar stall by Michael Marks, who collaborated with Tom Spencer to develop the business. The city also plays host to the final remaining gas lit cinema in the UK, the Hyde Park Picture House. This venue celebrated its 100th birthday in 2014 and retains a number of charming original features. The city also has the oldest continuously operation public railway in the world. You can still ride on the Middletown Railway today, some 261 years after it was first opened to transport coal. The city was also home to hippos at one point – in 1984, the bones of a hippo were discovered in Armley, with experts suggesting they could date back some 130,000 years. Today, the bones can be seen in the Leeds City Museum. The first black player to play in an FA Cup final did so in the colours of Leeds United FC. Albert Johanneson was on the losing side at Wembley as Leeds lost 2-1 to Liverpool.

Leeds’ cultural heritage

The city has also been home to a considerable number of legendary authors, including Alan Bennett, Barbara Taylor Bradford and Tony Harrison. J.R.R. Tolkien was even based in Leeds at one point. The Lord of the Rings author was the youngest professor at the University of Leeds in the early 1920s. The first ever motion pictures were shot by Louis Le Prince in 1888, where he captured footage of the Leeds Bridge and Oakwood Grange.

Selective Licensing

Selective licensing buy to let property investment

There is no doubt that landlords have had to put up with a good few changes in the buy to let market over the last few years. There are plenty of anecdotes on the internet citing the problems this is causing.

Landlords may complain about not making good returns but the truth is that BTL is still a profitable and highly efficient way to invest in property. It delivers profits from rising house prices as well as from rental income despite increases in stamp duty and new fee regulations coming into effect.

One increasing issue that you’ll find discussed in buy to let forums is the number of councils that are now introducing selective licensing, with 1 out of 4 boroughs currently running schemes.

Here’s our take on selective licensing and what it means for your buy to let property investments. It doesn’t have to mean you are left out of pocket, especially if you choose your investment areas wisely.

What is Selective Licensing?

Essentially, it means you need to apply to the local council for a licence to be a landlord. To do this, you need to prove that you are a suitable person and show that the property you have to rent is actually fit to be lived in.

Identifying the areas that have introduced selective licensing can be a little confusing and it’s easy to get caught out if you don’t have the right information or advice. Even within different councils or boroughs, it’s not utilised universally. The reasons for bringing in selective licensing in a particular areas can depend on a couple of factors including that there is a low demand for housing or because there have been instances of anti-social behaviour which councils feel landlords contribute to.

Selective licensing doesn’t apply to all landlords either. If you own a house, you are a private landlord and are in a designated area you will need to apply. If you are a housing association, own a holiday let, are a university with its own accommodation or have business premises that are occupied by members of your family, you don’t need to apply.

You may, of course, find that your property is suddenly in an area that the local council has designated with selective licensing, even after operating as a reputable business for a number of years. In this case, you will still need to apply for a license.

The upshot is that the rules can vary for different areas so it’s worth checking whether you fall under the conditions that mean you need to get a license.

The Benefits of Selective Licensing

While it all seems a little confusing, the idea of selective licensing is to help improve standards. It’s not there to punish landlords, although it can appear to be just that. If you already run a HMO where licensing is required, you won’t be particularly phased by this change.

Councils cannot introduce selective licensing for just any reason. The primary one is that the area is suffering from persistent anti-social activity and the local landlords are failing to take action to control it. The benefit here is that it is designed to improve the level of rental properties in the local area which can also benefit landlords.

Selective Licensing Aspen Woolf

For councils, it can be about ensuring that landlords provide adequate facilities for their tenants. There are plenty of horror stories in the media where disreputable landlords have not only left their properties in states of disrepair but put the health of residents at risk as well. If you’re a reputable landlord too, ensuring these bad eggs are weeded out of the system can be beneficial for both you and potential tenants. Applying for a license means that you need to have things like your gas safety certificate, smoke alarms and electrical equipment and wiring that is in good order.

If you are in an area where selective licensing is present, your application lasts for 5 years before you need to think about renewing it.

The Disadvantages of Selective Licensing

Most landlords will tell you that the big disadvantage of selective licensing is the cost. This can vary from region to region as can the areas that are using the licensing. In regions like London, you may be paying well over £1,000 per property while in Liverpool you could be looking at £400. If you are in a selective licensing area and fail to apply and register your property with the local council, you could also be liable to a fine of up to £30,000.

Head onto social media and you’ll find a lot of landlords who are unhappy that their profit margins are being further squeezed by the cost of applying for selective licensing. Councils have been accused of employing money making schemes and that they are making landlords directly responsible for areas where anti-social behaviour exists.  

How to Avoid Selective Licensing

While these are all valid arguments, it’s unlikely that selective licensing is going to disappear anytime soon and may well increase. Because of its nature, however, it doesn’t have to be the drain on resources that some landlords have found. Choose the right locations and make your investments wisely and it’s likely you won’t have to worry about selective licensing at all, at least not for the immediate future.

It pays to work with a property agent that knows what they are talking about when it comes to selective licensing. At Aspen Woolf, we handle a wide range of properties from London and Manchester to Luton and Leeds and understand the licensing requirements in each city.

The truth is that property investment, especially in the buy to let market, is still highly profitable. First of all, levels of rentals and tenancies are at an all-time high and people are always looking for great accommodation in decent areas. If you make good choices on which property you invest in and attract the right tenants, combined with the rising value of your home, there is still plenty of profit to be made.

If you’d like to find out how Aspen Woolf can help with your future BTL property purchase, contact our expert team today.

Is Liverpool Oversaturated With Student Accommodation

Liverpool Skyline

Liverpool has been a growing city as recent modernisation projects and new developments have turned an all-ready thriving city into one that has moved into the 21st century.

As one of the most prominent cities in the UK and in a prime location in the north, it has always been on the radar of investors. As the city has grown in population and seen a lack of housing supply, it has been an investors haven, particularly in the residential sector but what about the student accommodation sector?

Is there a demand?

When it comes to top universities, Liverpool is up there as one of the best and that has increased the demand from students to study there. With this demand has come an increase in the construction of purpose-built student accommodation and that also has to compete with the traditional student accommodation.

Analysing the figures might paint a certain picture but perhaps investors should still keep an open mind when it comes to investing in student accommodation in Liverpool. As it currently stands, there are 6,000 student bed spaces being constructed and this will be added to the already increasing number of student properties in the city, and that has left investors feeling slightly hesitant about investing in this sector in the city. This is understandable, especially when reports from the likes of Savills says that the supply of property is surpassing the demand from students. Worrying it might seem, and this might leave investors thinking that the days of high yields and low competition have gone.

Around the city centre, it is clear to see that the student accommodation sector is still thriving. Large developments are punching their way into the skyline with some developments having the ability to house over 1,000 students. There are many smaller developments taking place and over the last three years alone more than 5,800 bed spaces have been created.

Is Liverpool Oversaturated With Student Accommodation Aspen Woolf

Investment Opportunities Remain

Liverpool is already home to Purpose Built Student Accommodation but a large portion of that comes in the form of student accommodation located in the suburbs. Many years ago, students were seeking this kind of accommodation and that saw more and more properties being turned into houses in multiple occupation (HMOs) in an attempt to soak up the demand. While students used to have a need to live in the suburbs, they have now changed and this has meant that they have a real appetite to live in the centre of the city. Here they can be close to campus as well as the lively atmosphere and wide range of bars and restaurants. As a result, many of the student accommodation properties located on the suburbs are now being altered to accommodate young professionals who are living and working in the area but require more space and peace in the suburbs. This has meant that older student properties are being taken out of the sector, potentially leaving a gap for more centrally located student accommodation to be built.

Another positive is that in recent years, the number of students has increased considerably. Between 2015 and 2016 alone, the number of students increased from 50,000 to 60,000 and that number has grown and will continue to grow. So much so that the universities in Liverpool only provide beds for around 16% of their students and so, that means that the 84% shortfall has to be made up somewhere. This is where opportunities become apparent for investors.

Is Liverpool Oversaturated With Student Accommodation Aspen Woolf

Investors should begin looking at the bigger picture and the way in which student numbers are going to grow. This is a figure that will not only grow as a result of domestic students but also overseas students. More and more foreign students are choosing to come to Liverpool for the high standard of education and with that comes an increase in demand for first-class accommodation. Students from Europe, China and Japan have a different set of needs when it comes to student accommodation and they are often more willing to pay higher prices for better accommodation with more features. Therefore, they often opt for student accommodation that has a lot more space and features such as security, gym’s, communal areas and luxury features that most would associate with accommodation in the residential sector. Along with this, international students require good access to transport links as well as the vast array of bars, restaurant and shops that can be found in the centre of Liverpool. So, in years gone by where they would have opted for an HMO located in the suburbs, they now have a new desire for excellent quality and a great location. This has meant that the outdated student accommodation is being cast aside.

When it comes to investing, investors need to pick their investments wisely and perhaps not focus too much on the figures. The needs of students are changing and with that should come a new approach from investors. Therefore, they should be focusing on accommodation that is within close proximity of excellent amenities, a high standard of quality and finished as well as other services that students can make use of.

Essentially, even though there are many developments springing up throughout Liverpool that are aimed solely at students, there are opportunities. Old landlords who were once the choice of students throughout the city are having to re-purpose their properties because students are no longer valuing lower priced rents. They are now looking for simple access to lectures and a short walk home after a night out and that is why the repurposing of old properties will help to readdress the increase in supply. Once the out-of-city HMOs have been removed from the sector, it will enable investors to make the most of the increase in demand once again. So, not everything is as it might seem and even if the figures are not looking favourable, things are likely to change and with that comes plenty of opportunities to invest.

 

Property Downsizing: Opportunities for Investors

Property downsizing over 65s moving to smaller home

The housing market, over the last decade has been through a huge number of changes. From the financial crisis that put property prices at rock bottom to prices clawing their way back up to where they are now. Along with this, there is a shortage of properties and the demand cannot be met and that has caused investors to shift their focus onto buy-to-let properties.

In amongst all of this, there are those who are looking to downsize. Gone are the days when homeowners would own the same property for their whole life because the over 65s are now taking a financially-driven approach to housing and where they choose to spend the later stages of their life. Simply put, the over 65s are now actively planning for the future and their finances and so, more and more are looking to downsize.

Why are the over 65s downsizing?

As people get older, they become less mobile and less able to maintain a large property while there could be access problems in the future and so, downsizing means that they look to sell their current property and move into a smaller property. The whole idea makes perfect sense. Homeowners over the age of 65, sell their property, they move into a smaller property that is suitable for them as they grow old while releasing equity at the same time.

However, it is not as simple as this because there are now more over-65s looking to downsize than ever before. At one end of the market, you have first-time buyers who cannot get onto the property ladder because of prices and a lack of supply while at the other end of the market you have those looking to downsize yet facing a similar problem – a lack of options.

Property Downsizing: Opportunities for Investors Aspen Woolf

What does this mean for those who are downsizing?

A lack of options and sought after accommodation has meant that the market is saturated, effectively meaning that the supply does not meet the demand of those who want to purchase a property that they can call their home throughout the latter years of their life. As the market has adjusted to this increase in demand, it has meant that property that would be considered desirable to those over 65 has increased in value. Therefore, for those who are releasing equity from their current property, they are reluctant to invest it back into property that has been priced in a way that takes advantage of the demand and lack of supply. So, for those who are looking to downsize, it has meant that they need to consider looking at alternative options which includes rental property and this is where buy to let investment opportunities become a possibility for investors.

When people over the age of 65 make the decision to downsize, they perhaps might feel as though time is not on their side when it comes to waiting for the right property to come along. As time passes by, it could result in them becoming unable to move home with them effectively missing their chance and so, ideally they want to move as soon as possible. In this case, they then find that they have no other option other than to consider rental properties as a serious option.

Opportunities for Investors

There are many properties out there that are suitable for those who are downsizing but make great opportunities for investors who are looking to take advantage of the lack of supply in property on the open market. These buy to let investment opportunities come in the form of purpose-built or converted residential properties, that make it possible for investors to offer rental properties to those looking to downsize. As a result, investors offer a feasible solution while also being able to take advantage of excellent returns at the same time.

Due to the high occupancy rates, it has meant that rental yields of as much as 10% can be achieved in some areas. Investors should focus on those specific areas where there are increased numbers of people who are aged 65 and over. There should also be a focus on areas such as the South as well as many of the popular areas in the North such as Liverpool, Bradford, Leeds and Manchester.

Property Downsizing: Opportunities for Investors Aspen Woolf

Investors have to consider that many of those who are looking to downsize still want to remain close to those areas that they are familiar with, while family will also play a role in the decision that they make. Despite this, this is a growing rental market that is enabling investors to capitalise on an area of the market that specifically appeals to those who are over 65.

Properties that are specifically designed with special features such as lifts, parking, wider doorways and are also located near to main roads and public transport should be a serious consideration for investors. Along with this, the over 65s are even considering facilities such as an on-site chef, spa facilities and social events held on-site because this is something that can provide them with all that they require as they grow older.

When investors find the correct buy-to-let investment that appeals to those who are downsizing, it means that they can expect to see returns that are significantly higher than other areas of the buy-to-let market. These buy to let investment opportunities offer excellent rental yields but also the chance of an increase in equity as the property increases in value. With rental yields of anything between 6-10% as well as yields that are assured for anything up to 3-5 years, it seems as though investors have a clear opportunity to invest in a thriving and growing market that is almost guaranteed to offer them a return, regardless of whether that is in the form of rental yields or equity.

As the number of people choosing to downsize increases, it means that more opportunities will present themselves to investors. This will enable them to take advantage of the residential properties that are currently available that not only cater to the needs of the over 65s but also offer an exceptional return on investment.

 

Is Manchester Buy To Let Property A Good Investment?

Manchester city buildings skyline

Manchester is a key economic area and one of the most high-profile cities in Europe. The city is home to the UK’s second-largest city and regional economy and is also a key area of the Northern Powerhouse. The city has benefitted from the devolution of power and is able to choose some of its own budgets and spending. This has made it free to develop policies designed to attract investment from overseas.

Constant large-scale investment

The city is also known for its thriving media scene, musical history and footballing heritage. Investment continues to transform the city for the better, with new facilities springing up all the time and its skyline constantly evolving. The European Structural Funds programme delivered approximately £366 million to the city, enabling it to create jobs, invest in businesses and fund education. The city is also regarded as one of Europe’s most impressive tech hubs and is noted for its exceptional transport links, leisure facilities and affordable properties, with growing numbers of people relocating from south-east England and overseas to take advantage of its many benefits.

Key growth generators

One of the main generators of recent growth is the Greater Manchester City Deal. This fund is largely centred upon what’s known as an ‘earn back’ scheme. This has enabled the region to recoup extra tax revenue from gross value added (GVA) increases from infrastructure development. The deal has created an apprenticeship and skills hub, raised the number of opportunities offered by the Business Growth Hub and enabled the city to attract further inward investment. It has also established a housing fund enabling further property developments and made billions available for investment. The impact of the scheme is predicted to deliver £1 billion each year to the city by 2025. Money from the Regional Growth Fund (RGF) has helped create almost 6,000 jobs, despite the original target being just 3,700. The Manchester Enterprise Zone, The Corridor, One St. Peter’s Square and Manchester Central also provide further clear evidence of the region’s continued extraordinary growth.

Is Manchester Buy To Let Property A Good Investment? Aspen Woolf

Career and leisure opportunities

The City of Manchester is generally regarded as the heart of the North West. It offers outstanding career opportunities in areas like law and finance, public service and the media. It is also home to 100,000 students and frequently plays host to some of the biggest and most prestigious names in entertainment. Amazon is currently setting up a base in the city, whilst a new GCHQ office is also set to open soon.

Other key attractions

The city’s colleges and universities have produced 25 Nobel Prize winners, with the Manchester Arena being the largest indoor concert venue in Europe. The city is also home to a huge range of cinemas, art galleries, boutiques and independent shops and is within a short drive of some of the UK’s most picturesque scenery, including the Peak District, Lake District and Yorkshire Dales. Manchester Airport was named the UK’s best at the 2015 Globe Travel Awards, with the city producing 3.5% of the nation’s GVA. Its ever-evolving economy has enabled the city to weather the storm even during some of the most troubled economic times.

Greater rental yields

Rents are also on the rise due to the growing demand for accommodation across the city. In fact, rental costs had soared by 30% over a four-year period, according to research carried out by the Manchester Evening News. The Manchester City Council area was the joint-most expensive area to rent a Greater Manchester home in between Oct 2017-Sept 2018, with figures standing at £775 per month on average, with Trafford sharing first place.

Residential and commercial property expansion

More and more property investors priced out of areas like London are now looking to Manchester to help them achieve their targets. New facilities including bars, restaurants, shops and leisure venues are constantly appearing on the streets of Manchester, which is also eclipsing many of its big-name rivals when it comes to house price growth. Research undertaken by Hometrack found that prices had grown by 6.6% on average year-on-year. The average price for a Manchester property stood at £168,900.

Is Manchester Buy To Let Property A Good Investment? Aspen Woolf

Growth outside the city

Growth is also being seen in other areas of Greater Manchester miles away from the city. Bury was showing the second quickest level of growth at 20%, with Salford rents increasing by 18%. Bolton has a rise of 17%, whilst Stockport experienced a 13% rise. Investors drawn to the area don’t have to miss out if they are unable to take advantage of opportunities in the Manchester City Council area. Greater Manchester is home to some 2.5 million residents, with a large number of these seeing substantial house price growth. Many of these areas offer quick and easy access to the city centre, making them ideal for commuters in rented properties. Each of the ten Greater Manchester boroughs have their own decision-making powers and is part of the Greater Manchester Combined Authority led by mayor Andy Burnham.

More buy-to-let options

Investors seeking buy-to-let property opportunities in the M1 postal area can expect to enjoy yields of around 5%. Suburbs just a few miles outside of the city centre like Levenshulme are home to a large number of affordable buy-to-let properties offering yields of around 5-6%. Yields of approximately 4% are on offer when you buy in the more sought-after, leafy locations of Chorlton and Didsbury. Castlefield and New Islington are a short walk away from the city centre and play host to state-of-the-art luxury accommodation. Student-friendly areas including Fallowfield and Rusholme offer quick links to the big Oxford Road universities. Conventional M14 homes can deliver yields of more than 7%, but you could see a return of at least 12% by investing in a house of multiple occupancy (HMO). Ensure you do your research, and your buy-to-let portfolio could bring you fantastic rewards; check out our tips for investing in the buy to let market whether you’re an old hand or just starting out.

If you are looking for new areas to invest in property and are seeking exciting locations that are well and truly on the rise, Manchester and its surrounding towns and cities may well deliver the generous yields that you desire. For our top picks for investment in Manchester, visit this page.

Rental Properties Still In High Demand

piggy bank houses

The housing and property market has changed dramatically over the last couple of decades, as any investor will tell you. First-time buyers in many areas of the country are finding it increasingly difficult to get on the housing ladder.

For those with money to invest, the buy to let market is still doing well. This is in spite of tax increases, the removal of tax benefits, and changes to what landlords and letting agents can charge. Not only does buy to let provide a stable, long-term investment with a strong return when you come to sell the property but you also benefit from increased revenue from regular rent payments.

Why It’s So Difficult to Buy

Chronic underinvestment in the housing market over decades has led to a supply shortage, there’s no doubt about that. On 13th March, Chancellor Philip Hammond outlined a revamp of the Affordable Homes Guarantee Scheme, putting aside £3 billion to support buying 30,000 properties for housing associations across England.

While some in the housing sector welcomed the initiative, many have pointed out that it still falls woefully short of what is required. According to the latest government figures, affordable housing to buy or rent may be growing but it still forms a small part of the actual market and is doing little to relieve the pressure.

The high cost of mortgages and getting together the initial deposit for a home is putting off a lot of potential first-time buyers who now see renting as a better or the only option on the table. Of course, there is the option for shared ownership, something that has been increasing in popularity over the last few years. But, in many parts of the country, that still leaves purchasers trying to find enormous deposits and having to manage untenable mortgages.

According to The Guardian recently:

“Currently a shared ownership two-bed flat in London is on sale for £985,000 at full market value, with the buyer taking a 25% share and expected to find £2,469 a month in mortgage and rent repayments.”

Rental Properties Still In High Demand Aspen Woolf

It’s no wonder, therefore, that so many people have given up the ghost and decided to rent. In the UK, we tend to take the notion of owning our home a lot more seriously than in Europe where renting is seen as a good option and where many people treat it as the norm. The problem is that the availability of affordable rental accommodation is also a huge issue.

The Price to Earnings Ratio is Widening

One of the main indicators of affordability is the price to earnings ratio. A recent review by Lloyd’s Bank found that this is increasing relentlessly and now presents a significant barrier in being able to afford a first home in many parts of the UK. The average home in a city now costs seven times more than the average yearly earnings.

Lloyd’s produced a list of the least and most affordable cities in which to buy a home. Oxford, for example, is the least affordable with the average home costing 11.5 times your annual salary. That compares to 10.5 times the annual wage for London and Cambridge. Even if you move further out to the South, in places like Southampton you are looking at 8.9 times the average earnings.

There is a significant north-south divide. Stirling, Londonderry and Bradford are the most affordable buys with prices between 4 and 4.5 times the average annual salary.

Wage Inflation Isn’t Keeping Up

It’s simplistic to say that stagnating wage inflation is playing a significant role in the number of people able to buy their own home. The truth is that house prices have been outgrowing salaries for at least the last couple of decades. After the 2007 financial crash, property prices recovered better than our annual salaries.

How Brexit is going to affect all this, of course, is anyone’s guess, particularly in light of recent events and the political turmoil it has caused. The truth is that, while wages fail to keep up, the issue of affordability is going to become an increasingly important factor in getting new blood onto the housing market.

The Rise and Rise of the Rental Market?

For those who find that affordability is out of their range, the only other option is to rent. According to a recent report by the Resolution Foundation, a third of millennials could well spend their entire lives renting rather than owning their home.

Rental Properties Still In High Demand Aspen Woolf

The creation of ‘generation rent’ may mean that we need to change our approach to owning that home. The report noted that there are some 1.8 million families with children who now rent rather than have a mortgage. Rents are on the increase which may make the housing crisis even worse in the future and many tenants have nothing left at the end of the month and are unable to even save for a deposit.

A shortage of rental properties coming onto the market are also having an impact and that could raise affordability because of supply and demand issues. Indeed, this is already happening in many parts of the UK, particularly in city regions.

The Need for More Buy to Let Investments

When the Government decided to bring in higher taxes for second homes and change the rules on what tenants could be charged for, many buy to let landlords complained that it was going to damage the rental industry. The truth has turned out to be a little different.

The rental market is widening and demand is increasing. Those investors who want to consider buy to let options are still likely to be in a pretty good place if they purchase a rental property. Several factors are contributing to this.

  • Enough affordable housing is not being built – certainly not the 300,000 new homes that were promised by the Government each year.
  • First-time buyers are finding it difficult to get a foothold on the housing market in many parts of the country, despite incentives such as Help to Buy.
  • Those who own their home already are increasingly reluctant to move up and create space in the market because of the high costs involved.

More and more people are seeing the possibilities of residential property as a long-term, profitable investment. There is a shortage of rental properties at the moment that could see an increase of around 15% in rent levels over the next five years if demand continues to outstrip supply. There’s no doubt that buy to let landlords still have a pivotal role to play in the affordable housing market for some time to come.

If you’re considering adding buy-to-let properties to your portfolio, or as a first time investment, brush up on your knowledge by reading our Ultimate Guide To Buy To Let. For expert advice and first-class investment opportunities, get in touch with the team at Aspen Woolf today, our property investment specialists are always pleased to help.