In 2019, we found that lots of investors were focused on income-producing assets rather than more speculative capital growth opportunities.
This is understandable given Brexit and is likely to continue in the year ahead as its effects continue to impact the market.
As our clients know, we are firm believers in the affordable co-living/HMO sector, where our clients are enjoying excellent returns through our acol projects.
One of the challenges we face with this sector is the perception many people have of it.
Ideally, most investors want a prime location with quality tenants and a great net return.
Unfortunately, you won’t get a real 7%-8% net income in prime locations. However, you can get it in perfectly acceptable areas such as Greater Manchester.
As for tenants, we have learned that when it comes to paying the rent and keeping a property in good condition, a blue-collar worker is just as likely to be a great tenant as a professional worker.
As for rental income, it is all about the rental demand in the area and then making sure the right tenants are chosen and the property is managed properly.
With the sector offering a reliable, attractive income stream and capital growth in line with the general market, there is little downside for those investors seeking a secure investment.
Congratulations go out to Boris Johnson and the Conservative Party for their election victory.
A lot of people think Boris is a lightweight politician (figuratively speaking) and that he is full of bluster. He may or may not be, but there is no denying that he led his party to a resounding victory, albeit against a somewhat inept opposition.
Solving the housing crisis, which was one of his promises, may be a little harder.
One of his promises is a scheme offering discounts of at least 30% in an effort to help ‘local people’ and key workers onto the housing ladder.
Implementing it is fraught with difficulties, as David Cameron found out when he tried with something similar and failed.
The big question is who is going to fund it. It appears the plan is for developers to do this, but whether this is an additional burden they have to bear remains to be seen.
If they do, we can expect either new house prices to rise as they pass the cost onto the end buyers or the number of homes they develop to fall as marginally profitable sites are abandoned.
Neither option sounds particularly appealing, but as you might expect, it is all subject to consultation and the ‘devil is in the detail’.
The good news is that if Boris is as good at solving the housing crisis as he is at winning elections, then the prospects for the housing sector are bright. We live to hope.
