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London

Lets talk about London

 

Video Transcription:

Hey guys, so welcome to Brett’s Property Rants. So, I want to talk about London today. London’s really actually starting to impress me, I have to say. Most people are talking it down. Most people are actually still saying… It never ceases to amaze me how people can be so two or three years behind

I’m in Singapore now, right now on the beach so you can see this lovely view of all the shipping, and I’ll tell you what, Singapore is not slowing down, that’s for sure. The number of boats that are out there.

So London. So it’s amazing, I find consistently how people quote what was two to three to four to five years ago, the market. So people are saying, oh yeah, house prices are dropping a lot in London, it’s like, no, they’re not, actually. They were, and it’s amazing, when they were dropping, people were telling me, oh, I want to get into London, house prices, growing. It’s like, no, they’ve gone down. But that’s the reality here, is that most people are behind the market by about two or three years. And the problem is when there is a massive change in the market, all of a sudden they’re shocked by it. Now, look, for the last sort of six months, probably even longer than that, nine months.

I’ve been talking about that there will be a downturn. Make no mistake, there’s going to be a downturn. America with what it’s doing, China with what it’s doing, the world with what it’s doing, and whether it be Brexit triggers it, whether it be Trump triggers it, whether it be Trump invading who knows where to keep the war machine going, who knows what the trigger is going to be.

Go into YouTube, and have a look at all the videos that predict prices going down in 2013. And in 2014. And in 2016. 17, 18, 19. Every single year there’s, house prices are dropping. People are quite happy to try and predict the moment that it’s going to happen. But you know what? Most the time, they’re wrong.

And it’s ridiculous. So, what do I see with London? London is going to do well. Make no mistake, it is still a world city, I don’t care what happens with Brexit, at the end of the day, Brexit hasn’t been the downfall of London. If anything, the business has been moving from London up to Manchester and Birmingham. So actually, they’re being the real beneficiaries. But nobody’s really talking about that, are they? Understand, London is still growing.

London is still expanding. So you’re not gonna get rid of London any time soon. But what I will say is this. Right now there’s roughly one million… There are seven million people in the world, okay… One million people live in North America, one million people live in Europe. Sorry, what am I saying? There are seven billion people. One billion in America, one billion in Europe, one billion in Africa, and then there’s effectively four billion in Asia. So, those four billion in Asia, that is starting now to really show, and we’re talking India, and Asia, and China, effectively, and southeast Asia and that. So that’s where the population is.

So what you’re starting to find are historical things where… The UK used to rule the world. And then it lost its place to the US. And the US is losing its place to China. Now, is it China, or is it Asia? That’s interesting, that’s a topic for another discussion. But the reality is what we’re finding is the population now, is going to continue rising, it is going to level out because not as many babies are being born now. So what does that mean? Well, what that means is in about two generations, we’re actually gonna see a lot of our towns, our suburbs, places outside the fundamentals, are gonna start to drop off. In other words, people aren’t gonna live there anymore. They’re gonna become the ghost towns. Look in some of the American… I can’t think of the route name. In the deserts of like, Nevada and California and that sort of stuff. You know, when you get out and there’s an old place and there’s like one petrol station, and there’s no one for kilometres. That sort of thing. The Hollywood movie type scene. That, potentially, is what’s gonna happen with a lot of the suburbs far out, because people are moving to the cities.

Because they move to the cities, what’s one of the best cities in the world, still to this day, what’s still seen as a safe haven is London. And that’s not going to change any time soon. London is a fantastic place. If you can’t afford London, okay fine, Manchester, Birmingham, long term, fantastic. Now that’s not to mean that they’re not gonna still go up and down. With the market, that is gonna happen. But if you buy for the long term, which my suggestion is you are and you should be, and you should be buying to hold, as opposed to trading, then this is a great way and a great place to buy. The thing I like about London right now is that we’ve got developers that are having problems selling. In fact, no stock is moving. So they’re willing to do deals.

So actually, London is the cheapest it’s ever been. Two years ago, house prices were dropping. They’d stopped dropping and they were sort of evening out, but what was happening is a steady rate of sales. So what actually happened, developers and agents that, they weren’t negotiating. But now what’s happened, things have dropped off. Now, prices aren’t really moving that much. They’re still staying. Actually, in fact, they went up this month, and down last month, and the reality is what happens now is vendors and developers and that are willing to do even more deals. So you’re getting that extra push, but the fundamentals are still there. I mean, Brexit isn’t that much of a drum as people are making out. A lot of the damage is already been done. It’s been slow, ripping off the Band-Aid rather than the quick get rid of it and date it done.

So look, London is back. Make no mistake. We’re looking at stuff that… Now, I’m not talking central London now, we’re not really looking central London, but some places like Southwell, which you may not have heard, out of Eling, that sort of places. Moving out of the centre now places that… We were very much in the southeast, southwest, that sort of area, the last boom if you like, but now we might be moving east. Sorry. West. But further west. So what you’re finding now is rather than being in the centre, you’re sort of moving that out and following that ripple effect out where the fundamentals are changing. So there are some major, major things happening.

Communal towns. They’re all doing really well. As long as you get the fundamentals. Even with things like Airbnb, if you get within five minutes of a train station in London, and potentially, if you get an Airbnb through your lease, then that’s another option as well. So there are more options now to make more money on some of our properties. We’re starting to get into the service apartment side of things, which is really exciting. It’s hard because on one hand you’ve got the developers that are saying no to it, and so they’re prohibiting it in the leases, but then, on the other hand, it’s actually where the market is heading. London is back.

Make no mistake. Research it, look at it, and you will start to see things starting to move in the right direction. It may be a year or two before, even three years, four years before you see booming growth again. But it is worthwhile and now I think is the cheapest time that you’re ever gonna find. I don’t see it going down further, because developers are willing to do that extra development, that extra discounting, that extra bargaining, because they need to get the volume of sales. It’s as simple as that. And people are starting to realize if they need to get rid of it, they need to get rid of it now. They don’t wanna be waiting til the Brexit happens or doesn’t happen, or referendum second who knows with Brexit. It’s all up in the air. Anyone that says they know, they don’t know.

I’ve been actually predicting it quite accurately so far, but really, it’s a, if you wanna, it’s just an amazing thing to view. I mean, I don’t think we’ll ever have this happen again in our life. But maybe it will, maybe this is a sign of all politics to come. You know, in the future. Anyway guys, have a great day. Live with passion. And make sure you subscribe, comment, anything you wanna say. If you wanna argue with me, you wanna prove me wrong, do it. I’m looking forward to it. Looking forward to a healthy discussion.

All right guys have a great day. Live with passion. See ya.

Property Investor

Look who’s actively looking for more UK Investments

A recent article from BBC News Business caught my attention.

It is very interesting that Warren Buffett, an 88-year-old Veteran Investor has said that he’s actively looking to make large investments into both the UK and the European economies, despite all the uncertainty surrounding the future relationship.

Buffett has built up a reputation over the years for being an extremely well-measured investor, not least because of the vast amount of information that he gathers on a company/ sector before actually investing in it.

His announcement at this years Berkshire Hathaway Annual Shareholders Event could, therefore, be seen as a positive sign for investor confidence, especially amongst the negative headlines we have grown used to seeing day-in-day-out.

Regards,

Manny Esezobor

Property Investment Manchester

For property investment, Manchester is hard to beat

Six reasons you will want to invest in Manchester

Manchester is a highly desirable place to work, live and play. It is being developed at a faster pace than most cities in the UK and is attracting high numbers of businesses and young professionals. For those considering property investment, Manchester should be high on your list of UK locations.

Here are six factors that underpin the potential of investing in Manchester property.

1.    Manchester is a mecca for retail and leisure enthusiasts

Manchester has some of the best retail and leisure facilities in the UK. These range from the world-renowned intu Trafford Centre, to the Arndale, Exchange Square and Market Street, and fantastic boutique shopping districts around the city.

For the culturally minded, there are more than 30 museums and galleries to visit. For fresh air enthusiasts, Manchester is a stone’s throw from several of the UK’s most beautiful rural areas.

Manchester is also the home of two of Europe’s best football teams (Manchester United and Manchester City), and Old Trafford is the home ground of Lancashire Cricket Club.

2.    Manchester is the place for exceptional education

With hundreds of schools in the city region and 25 primary and secondary schools rated as outstanding within three miles of the city centre, parents are spoiled for choice for their children.

There are also 20 higher and further education establishments. The total student population is one of the largest in the UK – presenting an exceptional opportunity for investors in student accommodation.

3.    Manchester’s tremendous transport

Manchester benefits from road and rail networks that connect the city to all corners of the UK. When HS2 services start running, London will be only an hour away.

The Manchester region is served by regular bus services, and rail and Metrolink services.

Manchester Airport is the North’s only major international gateway. It serves more than 22 million passengers each year – a number that is expected to rise to 50 million by 2030.

4.    Manchester is a city open for business

The city region houses a population of 2.8 million in its 10 metropolitan boroughs – the largest UK city region outside of London.

With a GVA of £63 billion, Manchester’s economy is extremely diverse with major employment sectors including:

  • Financial
  • Advanced manufacturing
  • Life science and healthcare
  • Energy and environment
  • Creative, digital and technology

Many major companies are located here (including names such as Barclays, BNY Mellon, Cargill, Heinz, BAE Systems, the BBC, Google, and IBM) attracted by the city and its stock of well-educated workers. The rate of start-ups here is also strong.

Consequently, the growth of more than 2% per year in employment that Manchester has experienced in recent years is expected to continue.

5.    Regeneration and development are booming in Manchester

Manchester is the beating heart of the Northern Powerhouse, and billions have been spent and are being spent on regeneration and development. Key projects include:

  • The Manchester Enterprise Zone (business and office space, manufacturing, health, and bioscience facilities)
  • The Corridor (now the UK’s largest academic campus)
  • Manchester Science Park (a world-class science and technology hub)
  • Spinningfields (mixed-use development in the heart of the city centre, providing space for mostly financial and professional services firms)

Regeneration projects include:

  • NOMA (an £800 million project)
  • St John’s Quarter (a mixed-use development including 2,500 new homes)
  • Ancoats (developed with £1 billion from the owners of Manchester City FC)
  • Greengate (2,000 apartments to be completed in the next 15 years)
  • Middlewood Locks (A £700 million mixed-use development)
  • Kampus (200 new apartments, and independent bars and restaurants)

The latest Deloitte Crane Survey forecasts more residential units will be delivered in the next three years than in the previous 10 combined.

6.    Manchester – where the population just keeps growing

Manchester’s city population has grown by 6% in the last three years – three times the national average. With more businesses moving to the region, HS2 soon to run services here, and a young, diverse and well-educated population, this rate of growth is set to continue.

Summing up

World-class retail, leisure and education make Manchester a good place to live and learn. The incredible transport links and a young and vibrant population make it a good place to do business. Add it all together, and Manchester is a great place for property investment.

You can learn more about the best property investment opportunities in Manchester by contacting the team at Gladfish at +44 207 923 6100.

Live with passion,

Brett Alegre-Wood

Making money from property

5 Ways for making money from property in the UK

Profitable property investment strategies for all investors

Making money from property is one of the most satisfying ways of investing. And there are many strategies that you could use to do so. In this article, we describe five of the most popular.

1.    Long-term buy-to-let property investment

When you purchase a buy-to-let property, you are investing for the long-term potential in a growing private rented sector in the UK. By investing wisely and getting good tenants, you should profit from inflation-proofed rental income and long-term capital gains from rising property prices.

You can take advantage of the benefits of leveraging in property investment, which massively improves the returns on your invested capital.

You can pass on many of the duties and responsibilities of being a landlord by hiring an experienced and competent investment property manager. With effortless property management, you should benefit from perfect passive income.

2.    Short-term flipping

Investors who want to profit from capital gain, without holding the property for the long term, can do so by using a strategy commonly called ‘flipping’. Two ways you might flip property are:

  • Buying a property that needs refurbishing, doing the work, and selling for a profit
  • Buying off-plan property and selling before the property is complete (or shortly after completion)

If you choose the first method, making money from property this way takes discipline, tight control of costs, and a systematic approach. You’ll need to consider that a short-term fall in property values could damage your forecast returns.

With the second method, you are somewhat protected against the potential for short-term price volatility – thanks to the discount when you invest in off-plan property. By the time you come to sell, this discount will act as a buffer against a fall in the market. If the market price has increased, this will be translated into a larger profit.

3.    High-yielding holiday lets

Investing in a holiday let property is similar to investing in a buy-to-let property, except that making money from property this way relies on a steady stream of short-term vacationers rather than the more stable income from longer tenancies.

There are some tax advantages over buy-to-let investment. For example, you can offset all your mortgage interest payments against your letting income, and the cost of furnishings can be deducted from your income before tax is calculated. Also, because this type of investment is classed as a business, profits become ‘relevant earnings’ for pension purposes – meaning you can increase your pension contributions.

Holiday lets pay higher yields, but you will need to market your property effectively to take full advantage. (Read our article “Is holiday let property a good investment?” for more information.)

4.    Fixed-term hotel room investments

For cash investors with a fixed timeline for their investment, and who want a guaranteed return, investing in hotel rooms may appeal. You gain exposure to high-yielding property investment, without having to buy (and run) an entire hotel! In brief, this type of investment works as follows:

  1. Do your research and select a popular destination.
  2. Select a hotel that offers the benefit of location and good management.
  3. Buy the hotel room.
  4. Receive income from your investment (usually around 8%).
  5. Your capital is returned at the end of the fixed-term of your investment.

This could be a great way for making money from property if you have a cash pot that you don’t need now but will need in, say, five or seven years (for example, to pay school fees for your children).

5.    Diversify with developer loan notes

Have you ever wished you could make the profits that banks make when they loan money to others? Developer loan notes allow you to do just that. In effect, you lend a developer money over a fixed term to help them fund their project. In return you get:

  • A fixed (and high) rate of interest
  • A guarantee on your capital invested
  • The flexibility to take your capital back early

The amount needed to invest is smaller than for most other property investments, and you can build a portfolio of loan notes paying interest and maturing at different dates – allowing some exceptional budget planning.

Summing up

There are many ways of making money from property. The five described here are among the most common. Which is best for you depends upon your personal circumstances, investment objectives and other factors. For a confidential, no-obligation discussion of your options, contact one of the team at Gladfish today at  +44 207 923 6100

Live with passion

Brett Alegre-Wood

Leeds Property

Leeds is set to provide great post-Brexit property investment returns

A vibrant economy offers protection and growth potential in uncertain times

Leeds is one of the UK’s core cities, with a large regional economy, excellent education facilities (including three universities), and a vibrant city centre. Leeds is currently benefitting from massive investment and regeneration. Channel 4 has recently selected the city as the location for its new UK headquarters. It is a lifestyle city to achieve your lifestyle investment goals.

I’ve recently been asked how Leeds is likely to fare after Brexit. I think it’s going to do fine. But don’t take my word for it. In the UK Powerhouse Study, Irwin Mitchell and the Centre for Economics and Business Research (CEBR) expects Leeds to be the second fastest-growing local economy in the UK immediately after Brexit.

There is a jobs boom in Leeds

The report forecasts an economic slowdown after Brexit but also concludes that the Yorkshire region has the potential to produce long-term economic growth. This growth, it says, is likely to be concentrated in the major towns and cities in the region, particularly in Leeds.

Leeds has a diverse economy, with major sectors including:

  • Financial and business services
  • Retail
  • Leisure and the visitor economy
  • Construction
  • Manufacturing
  • Creative and digital industries

Its jobs growth has recently been concentrated in knowledge-intensive businesses, and, combined with digital tech business, this is expected to help it produce the second-fastest jobs growth in the UK in the three months after Brexit day (29th March 2019). In the 12 months to the second quarter of 2019, the UK Powerhouse Study forecasts that jobs growth in Leeds will be 2% and that the local economy will grow by 1%.

What does this mean for property investment in Leeds?

Whatever form Brexit takes, it is likely to create issues that will cause economic uncertainty for the UK. Many businesses are preparing for the worst and hoping for the best. It’s clear that Brexit won’t be all bad, despite what various experts and doom merchants are predicting. There will be opportunities created, and, with its diverse and knowledge-based economy, Leeds is more protected against Brexit than many other cities in the UK.

The city is an attractive place to live and work, offering much to both businesses and residents. It is home to a huge local economy – the biggest regional economy outside of London – and is well connected by road and rail to the rest of the UK, and by Leeds Bradford Airport to international destinations.

Jobs growth is expected to continue in the next 10 years, with the local authority forecasting at least another 25,000 jobs in the private sector. The highest growth in jobs is expected in accommodation and food services, financial services, and manufacturing. These jobs will help to support a growing population, forecast to grow from 780,000 currently to more than 900,000 by 2036.

Fundamentals like these have led JLL to forecast that property prices in Leeds will rise by almost 20% by 2022, and rental prices will rise by around 19% during the same period.

When searching for the best property investment opportunities, it is vital that you ignore the noise and concentrate on the fundamentals that drive demand and long-term profitability. We believe that Leeds is one of the most exciting cities for property investment in the UK today. Its vibrant and diverse economy should sustain long-term income and capital gains, to produce above-average returns in post-Brexit Britain.

To find out more and receive an in-depth appraisal of the best property investment opportunities in Leeds, get in touch with Gladfish today.

Live with passion

Brett Alegre-Wood

Brexit

Get ready for a Brexit bounce in London property prices

Why London prices may rise, and where

Property investors should be preparing now for a bounce in London property prices when the UK leaves the EU. This is what several experts are now predicting for the London property market, with almost three years of experience of Brexit uncertainty behind us.

In this article we examine why the experts are so positive about the potential for property investment to produce great gains in the coming years, and we’ll also highlight a couple of locations where that potential could produce the best returns.

What is in store for London property in the next five years?

London’s property market has been the most sluggish of almost all UK locations since the EU referendum produced its surprise result in June 2016. Many experts predicted a crash in London prices, causing an exodus of financial firms from the City.

However, these predictions have proved wide of the mark. Additionally, the EU has altered its rules to allow European firms access to the London financial markets even in the case of a no-deal. But, without a doubt, those predictions and the uncertainty surrounding Brexit affected the London market, especially at the high end.

JLL is among those who now expect a post-Brexit bounce. It forecasts that, between Brexit day (29th March 2019) and 2023:

  • The average price of new build homes in Zones 1 and 2 will rise by almost 18%
  • Luxury property prices will rise by 15.3% in Central London
  • The average price will rise by 14.3% across Greater London

Why could property prices in London rise?

JLL expects a Brexit deal to be done, in which a transition period smooths the path to final exit from the EU. This, it says, will lead to a more stable and confident economy. This will encourage homebuyers and investors to return to the market. As job security returns, property values will rise faster, it says.

We’ve got to put this reasoning into context, though. There are currently no forecasts that the UK economy will crash post-Brexit. GDP is expected to grow by more than 1.5% in 2019, and rise to 2% and above in the two years after. Wages are expected to continue to grow faster than inflation.

But it is not only the economy that dictates house price direction. There is a chronic shortage of homes in London. The Mayor of London has a target of 66,000 new homes each year. Developers are currently delivering around 20,000 to 25,000 new starts each year. That’s a massive gap between supply and demand, and a lot of pent-up demand in a city whose population is forecast to grow by almost two million in the next 23 years.

Will there be a boom in London house prices?

As recently as 2014, London property prices increased by as much as 20% in a single year. It’s clear that those days are now gone. If the Brexit deal finally turns out better than expected, the cork could be released from the bottle of pent-up demand. But a rapid bounce in property prices is less likely today than in the past – the government’s property tax reforms and more regulation have dampened buy-to-let interest.

So, while we may not see a sudden boom in property prices in London, there is likely to be a more measured return to a rising market. The question is, where might it be best to invest for growth in London?

Look for growth potential in London property locations

Recent research from Dataloft and property developer Mount Anvil (and published in Homes and Property) suggests that the best locations to buy will be those that are benefitting from regeneration and offer apartment living. In such areas, average prices rose by around 17% between 2012 and 2016. Boroughs such as Tower Hamlets and Newham performed particularly well.

London property plays well for the greater investment emphasis on capital growth, as the tax advantages of rental income have been eroded. So, where might that capital growth be found in London?

Outer London is hot

Some of the hottest areas for investment in London property are found in Outer London right now. Boroughs such as Redbridge and Merton have bucked the trend of sluggish house prices in the capital. With 24-hour underground services, massive infrastructure investment and regeneration, these areas in Outer London are gaining in popularity with buyers and renters attracted by greater affordability.

A few ideas for your investment location research

London property investment benefits from a wonderful basket of strong fundamentals. The question is, where are the best locations to invest in the capital? Here are a few key locations which we believe could produce above-average returns in a market returning to growth:

  • In East London, our favoured locations include Tower Hamlets, Hackney, Redbridge, and Waltham Forest
  • Locations that are likely to benefit most from infrastructure projects include those on the Crossrail 2 route, such as Haringey, Wood Green, and Battersea
  • We also think that Canary Wharf, Woolwich and Aldgate are attractive for investors

To find out where our research tells us are the best investment opportunities in London as we move through the final stages of Brexit, get in touch with Gladfish today.

Live with passion

Brett Alegre-Wood

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