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    "Thank you very much - we were both very pleased with how 86 Barnsley Rd is looking now - we stopped by so I could have a brief look around the outside after we left on Tuesday - and I'm very happy with it. Well done with managing a successful refurb!"
    Warren Burgess, Director BP
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    Simon Baddeley, Senior Recruitment Regional Director
    "The enthusiasm honesty and passion shown by Nick and his team regarding this property investment opportunity shone through"
    Michael Plaza, Affiliate Business Owner
    "You really have got great people there and they are so efficient and helpful it’s so nice"
    David Hunt, Investor
    "What stood out most was the energy level in the office - you clearly have a great team, that gave us confidence in PPB's capabilities for managing property portfolios."
    Warren Burgess, Director BP
    "PPB is a great investment. I have properties in the South East with lower yields and it wasn’t rocket science to look further north for better returns"
    Jeff & Catherine Lawton
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    Katherine Newman, Civil Engineer
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    Paul and Linda Cronin, IT Executive
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    Henri and Angela Botha, Ex-Dentist
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    Thomas Clarke, Business Owner and Entrepreneur
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    Gerard Scannell, Ex-Warehousing Director

    Property Predictions for 2014…

    posted: January 29th, 2014

    With 2013 becoming a distant memory we find ourselves facing 2014 pondering the changes that will occur in the property market.   As I did last year, I would like to share with you my predictions for the year ahead when considering the UK Residential Property Investment

    I will focus on the key issues that concern any investors or those contemplating a move into property, which are:

    Price

    Price is always at the forefront of any investor’s mind and the subject which generates the most debate! Last year I predicted that 2013 would bring little change in price, and official figures released for the last quarter show that although there has been a 3.1% growth across the UK, the majority of this has been in London, with the rest of the country remaining relatively stagnant.

    My predictions for this year is that prices in London will begin to slow down (albeit there will be some level of growth). When looking at the property market in the city it is astounding at how prices have rocketed, but this does not reflect what has happened around the rest of the UK.

    However, there have been various political, economic and social changes over the past few years which indicate that 2014 will bring substantial growth in larger cities around the UK, they include:

    Supply and demand is a point I often reiterate to those thinking of investing in property. In the UK particularly, there will always be a demand for housing of the right kind and this looks set to continue.

    Affordability for the majority is at last heading in the right direction, helped massively by the Government’s Help to Buy Scheme, this combined with a greater enthusiasm from banks to lend, has had a huge impact on the housing market.

    Overall there has been a dramatic upturn in confidence in the UK, which is not focused entirely on property but in the economy in general.

    The combination of all these factors will result in an increase in price in larger cities around the country of around 3 percent in 2014.

    Geographical Areas

    In 2013 I looked at the next property hotspots and predicted that London would continue to recover, which it has beyond all expectations with prices rising and increased foreign investment.

    When considering investment it is important to be aware that the high prices demanded do not guarantee maximum returns. In the capital it is very difficult to achieve considerable discounts on properties, which in turn has an impact on yields and capital growth. If you believe that properties in London are always going to go up in value (which I don’t) then that is the place for you to invest. I believe that for the best investments with discounts, double digit yields and those which will provide a good income the best strategy is to focus further North.  In fact, I recommend focusing on areas such as Leeds, Manchester, Liverpool and Sheffield (big cities which are currently receiving huge investment).  These areas offer unique opportunities with good discounts and a good monthly income so you are not dependant on a future growth that may or may not happen.

    Lending

    In 2013 lending began to improve as predicted but not to the extent we would have perhaps liked. Although in 2014 there will be more lenders and more competition available banks will primarily prefer to lend to professional property investors as opposed to the “accidental landlords” (who are finding it more difficult to secure funding). There are great products available from high street lenders with attractive interest rates of around 3.4% on buy-to-let mortgages, however, to successfully achieve these rates banks are looking for solid business cases from landlords with a well thought-out strategy as banks remain risk averse.  They are also more willing to work with investment companies such as Platinum Portfolio Builder (PPB) who offer profitable opportunities.

    The Help to Buy scheme has encouraged government funded lending and this alone has kick-started the UK property market. As lending begins to become more accessible, more people will enter the market which will have a direct impact on price.

    Regulation

    Regulation will continue to cause great debate in 2014 as there looks set to be more changes to the benefit system and there is still a lot of uncertainty on how this will progress.  In reaction to this PPB have made a conscious decision to move away from tenants reliant on benefits and will continue to do so in the future.  As a business our aim is to attract higher earning tenants to our properties.

    There will also be further regulation in lending during the course of next year making it more difficult for investors to secure lending.  For this reason it is critical to seek assistance from brokers who know the market place and have strong relationships with lenders, this will allow you to complete deals on exciting opportunities quickly.  In the current market it is the speed in which you can act on property transactions that will enable investors to achieve the best discounts and yields.

     

    Interest Rates

    In 2013 interest rates remained at less than 1 percent.  In 2014 I predict little change, a slight rise at most (anything from ¼ of a percent to 1 percent).  A significant increase is unlikely as Mark Carney (Governor of the Bank of England) stated earlier this year that interest rates would remain low until employment reached 7%, which at the time was believed to be 2015.  Although this looks set to happen much earlier than expected I believe interest will stay around 1.5% until the end of 2014.

    Competition

    Competition increased in 2013, with larger numbers of lower-level investors entering the market place and this will continue into 2014.  The PPB business model, has reacted to this change and moved away from the purchase of smaller individual properties, where competition is higher and significant discounts more difficult to achieve, to larger block deals with an average purchase price of £250,000.  Although a higher entry point, for this level of investment it is possible to purchase six properties with a double digit yield and a discount of around 25%. These figures are achievable as there is much less competition in this section of the marketplace and is how PPB will continue to progress in the forthcoming year.

    What will work in 2014

    What works in 2014 is the same strategy that works at any time in property and that is the dull and boring.  The safe the solid and the reliable, houses that people will always want to live in and will always want to rent.

    Last year I discussed HMOs and predicted that 2013 would see many people investing in this area and this certainly was the case.  As an outcome of this there has been numerous variations on the model including; straight forward purchasing, lease options and rent to rent – all of which has encouraged higher levels of competition.  This has resulted in oversaturation in many locations such as London and the South East with many areas being over-supplied.

    The truth is that HMOs can be a great strategy if done correctly, but with the kind of opportunities currently available I would urge you to consider single occupancy properties instead. When bought at the right price, single occupancy properties can offer even greater returns, cheaper mortgages, reduced management time, less hassle and less competition.

    Simple, single, safe AST properties where you can achieve great returns is my recommendation for 2014.

    Also making a return are development properties and in a few years investors will need to explore this avenue but at the moment you can purchase properties ready-made and tenanted without the pressure of development.

    In conclusion, time and speed at which you can complete is critical in 2014.  It is for this reason that it is essential to be prepared in terms of legal, finance and lettings support.  For assistance and support in all areas of property, please contact PPB who offers a one stop shop approach to building a successful and profitable portfolio.  With expert knowledge and a team of handpicked professionals we are trusted by hundreds to secure their financial future through investment.

     

    Contact Details

    Nick Carlile – Managing Director

    Tel: 01226 732 606

    Email: nick@platinumportfoliobuilder.co.uk

    www.platinumportfoliobuilder.co.uk

     

     

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