When looking to invest in property, you first need to consider the following:
Investing in property is a business decision, so it is imperative you do your due diligence on the location prior to buying, as it can dramatically impact the results you achieve.
So why Nottingham?
Nottingham has a population of over 1.1 million people,with a potential workforce population of over 512,000 people. As a city it is one of the UK’s flagship Enterprise Zones and is having considerable money spent on it with over 1.6bn of investment coming to Nottingham over the next four years.
Home to two world class universities, it also has a thriving economy worth 12.1bn per year, and it qualifies as the 7th richest city in the UK. Combineall this together and the excellent transport links via the M1, the East Midlands Airport and high speed trains to London taking only 2 hoursand you can understand how Nottingham has attracted over 50 Regional and National Headquarters.
The population is continuing to grow, putting increased demand on rental properties and a check on shows that at the time of writing this750 individuals were looking for accommodation, with only approx 290 rooms available. Add to this a Council House waiting list of over 10,000 families and you will understand how the Letting Agents are constantly short of good stock and need more landlords to meet demand.
As with any city there is the traditional split of tenant types between, professionals, LHA (those on Housing Benefit) and Students. Gross Rental Yields on Single Let propertiesare typically as high as 7% – 12%, which again highlights its attractiveness as an investment area and the Average Net Return on Money Invested by our investors over the last 6 houses has equated to 8.72%.(This is the return our investors are achieving after all the costs have been accounted for, so considerably higher than leaving the money in the bank, or the Stock Market).
In addition, the above returns all the houses have been purchased Below Market Value and therefore also contain equity within them, which will grow as the market picks up over time.
With regard to the overall marketplace Nottingham, like the rest of the UK experienced a drop in house prices with the financial crisis, however the relative closeness of Nottingham to London and all the development in the city has ensured Nottingham is a good location to live and so the market has remained active. The lower house prices represent a genuine opportunity for investment with the average sold price for a Semi-Detached house (over the last 2 years) for four of the postcode areas coveredby Alton Property Partners, isonly129,000 and terrace houses average out at 83,000. Currently however, we are purchasing houses for our investors significantly below these averages, which means seed capital of between 28,000 – 35,000 (this includes all costs) can secure a high yielding investment property which will provide a very healthy return and is a great pension rescue plan.
All of which are elements why I personally also invest in Nottingham.