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propertyprof
Guest
saying that, house price multipliers in northern cities like Manchester are still in a better position than those pretty much anywhere in Ireland.
i live in the UK and I cannot agree that UK property is in any way undervalued. The UK appears to be coming to the end of an unprecedented economic boom that has lasted since the late 1990s. The property market here has already had its boom - only it has yet to correct. The property market here plateaued about 3 years ago and until quite recently property prices were not doing much more than matching inflation. Today's interest rate increase is a reminder that the BoE will not let house prices inflation take off again (admittedly rates went up for a number of reasons).
House prices relative to earnings are still at an all time high; public finances are not in great shape (don't rule out increased taxes); interest rates still have further to rise & the US economy is slowing (a major export destination).
If you can find value then well done but there are not too many parts of the UK that have not been picked over by buy-to-let investors.
When your financing rate is at least 5.5%, an investment with a gross yield of 6% or so would only represent good value if you expected the cash flows from that investment to increase over time - otherwise who will buy it from you?
Can anyone advise on the stength of the buy to let market in Manchester UK. What areas of the city are best ?
Manchester like most of the UK cities are becoking overrun with apartments. It shows no signs of slowing down in terms of construction. An area which I may look at is Portsmouth. I havtn invested in the UK now for 2 years but Gosport Millenium Bridge there are apartments looking out to water for 129,950 GBP deposit and stamp paid carpets etc. I may head there to take a look and gauge the rental market. Crest are building thede apartments.
There's nothing attractive about BTL in the UK currently. As in Ireland, there are massive national and local building programmes on top of a market where rented properties (outside of Central London) have long voids between tenants. As an indicator where I live (90 minute drive from Central London) several of the massive newbuild developments are being massively 'pushed' in the local press to FTB's on the basis of "Only £99 pounds to move in".......plus the developers often pay transaction costs and legal fees (and still there's nobody rushing to buy. Judge for yourself!
The Portsmouth deal you quoted sounds relatively good, however, Portsmouth is at the moment a very unattractive location and with the exception of the English Partnerships lead developments there is a pretty dim view of the city. There is net emigration of the youngest and brightest to contend with also. Its not seen as a cultural centre and many are afraid to go out in the city centre for fear of getting done in by the sailors.
With regards your comments on Manchester, I find them relatively uninformed and sweepingly generalised. There is possibly an oversupply of apartments in Manchester City Centre - definitely not a massive oversupply imo. Plus that is just the city centre - there are 10 million people within an hours drive of Manchester - thats a big market and to say that a market is saturated because of one small section of the market is folly. Manchester has recently got the green light for an extension to the tram/luas system, the M60 orbital motorway is now fully complete, the BBC is moving a large proportion of it operations to Manchester and so is the Bank of New York.
Savvy investors are looking to the southern suburbs that will benefit most from these changes and those who are a little less risk averse are looking to the eastern suburbs of Stalybrigde, Ashton etc.
Long term there will be value in northern UK cities however at the moment anyone buying say 3/4 properties is getting a further 10% - 15% plus off single purchaser price so thats going to be a struggle.
Down south the city has boomed leading to good London market - this has bailed out Brown who would otherwise have to increase taxes.
It is unwise to judge risk / return based on residental yields in Ireland - virtually every other asset class globally offers better.