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Insight & Opinion

Top buy-to-let investment opportunities for 2015

Author: Gemma

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Have you ever wondered what type of buy-to-let investment opportunities will fare well in 2015?

We’ve rounded up what the industry experts say about the UK’s top asset classes.

 

 

1) Student property investment

Student property has been hailed as the UK’s ‘top performing asset class’ by Knight Frank since 2011.

And with investment in the sector reaching £2 billion for three consecutive years (JLL), the asset class is now considered ‘mainstream’.

From rising student numbers, to higher tenant expectations, student property investment looks set to remain one of the UK’s best performing property sectors throughout 2015.

Our top tip: For those looking to invest in student accommodation, seek locations which are in close proximity to a good university. Local amenities such as supermarkets, bars and good transport links are also desirable and will appeal to a wider pool of students.

 

2) Commercial property investment

The UK’s commercial market has seen an influx of investment throughout 2014.

In the first half of 2014, investment in the sector increased by 46% to £58 billion (Cushman & Wakefield) and although capital values are slightly below their 2007 peak, the sector has performed well throughout the year.

Experts in the sector believe that 2014 will end with total returns from commercial property higher than those reached in 2013.

Our top tip: Think outside the box. Commercial property outside of London has performed well throughout the year. Competitive pricing, strong returns and a rising demand due to a lack of supply have led to a rise in investment in the regions.

 

 

3) UK residential buy-to-let property

2014 has been a good year for the UK’s residential buy-to-let market. On average landlords have seen rising rental returns and capital growth making the market ripe for investment.

In 2011, 46% of all people aged between 18 and 35 rented their homes and this number is expected to increase.

A new report from Savills shows that over the next 5 years, the number of renters will increase by 1.2 million.

Great news for those looking to invest in UK residential buy-to-let property, the average UK rental payment increased by 8.2% in the year to August, with the average cost of renting reaching £921 a month.

And with an average 7 would-be renters chasing each available rental property on the market, rents will no doubt continue to rise in key locations.

Our top tip: Get to know the area you are investing in. Ensure that there is a strong tenant demand and check the prices of properties recently sold in the area.

 

4) Healthcare property

According to the latest bi-annual report from Colliers, occupancy levels are on the rise across all care sectors – nursing, personal care and specialist care.

Levels reached 90.2% in the nursing care sector, 90.3% in personal care and 91.1% in specialist facilities.

Demand for beds in care homes is expected to rise in line with the UK’s growing elderly population. The ONS shows that there are currently 1.5 million people in the UK over the age of 85 and this is set to increase to 5 million by 2050. View infographic…

There are concerns that the UK is not equipped to care for its growing elderly population which has sparked investor demand.

Our top tip: Check out the occupancy rate at local care homes before you invest. Areas where there is a strong demand for specialist care are likely to yield better returns.

5) Hotels and hospitality

In 2013, the number of overseas visitors in the UK reached an all-time high, with 32.8 million people coming to the country last year alone. This marked a 6.5% increase in visitor numbers – the largest expansion seen in 1 year since 2006.

Regional hotels outperformed their London rivals, with regional transaction activity reaching £1.2 billion. This is expected to reach £2 billion by the end of the year.

JLL Alternative Property Survey 2014 showed that respondents plan to increase their allocation to alternative investments. The research shows that respondents expect to increase their investment in Hotels and Hospitality by 69% over the next 5 years.

Our top tip: Ensure that there is a well-established Management Company in place and if possible, seek investment in a location with a strong and proven demand for the Hotels and Hospitality sector.
Whether you choose to invest in student accommodation, residential buy-to-let, healthcare or commercial property, ensure that you consider your investment carefully.

Top tips for your first investment property…

If you are planning to invest in property in 2015, contact our experienced team of Property Consultants who will be able to provide you with the latest high-yielding opportunities.

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