This month we take a look at your next property investment-the buy to let or indeed residential purchase and the choices to decide upon. What is the best return for your money?
The latest statistics from James Laurence Sales and Lettings reveal that in the leafy suburbs close to Birmingham City Centre (Edgbaston and Harborne) demand for rental property has increased by 13% in June, with 1 in every 4 properties on the market now under offer. Within the city core market rents continue to increase with the average asking rent within the B1, B2 and B3 postcode now at £1,089 pcm. A growth in rental demand this month has definitely had a direct impact in success in branch, with ½ of all properties advertised let within 12 days.
Both are good propositions, begging the question:
The city centre apartment or the three bed semi in the suburbs-what is the better investment?
With our newest branch now open in Chad Square, Edgbaston, complementing our city centre operation, we are best placed to break down the investment potentials. Two examples are below: Forge Place: Birmingham city centre (Digbeth) Status: New to market Price: £129,950 Rental income: £750pcm Outgoings: service charge of £900.00 per annum and car park permit £15.00 per month Net Yield: 7.7% Gilchrist Drive: Edgbaston (off August Road) Status: SSTC Price £270,000 Rental income: £1000pcm Net Yield: 4.4%
Both are above the average yield for their area! The average return for an investment in Birmingham city centre (based on postcodes B1, 2 and 3) is a gross yield of 7.5%. Demand for one bedroom apartments alone is currently still very high with 32% of the properties advertised showing as under offer, with an average asking price of £694.33 pcm. Edgbaston, a varying style of property, offers an average gross yield of 4.1% currently, with its close neighbour Harborne (based on B17) achieving 4.2%.
Demand for the typical three bedroom home in these areas proves higher than the city apartment as 41% of the properties on the market having a let agreed, even with a higher rental asking price of £990.00 pcm.
So quick let V’s higher yield???
The bigger picture could well determine the choice for longer term benefits and the gamble on capital appreciation. Within Birmingham city centre recent and future investment such as new Birmingham New Street station, Grand Central and the proposed HS2 train station providing a streamline service to London (planned on the Eastside also) provide a positive outlook. It could be concluded this is an area of growth and an influx of new employers that latter could bring provides the prospect of more professional tenants.
The leafy suburb of Edgbaston has long been THE aspirational area of Birmingham, boasting excellent leisure facilities-such as The Priory and Edgbaston Golf club- and excellent local private schooling. Furthermore rental properties in the leafy suburbs have increased very quickly over recent years as supply is falling as demand is increasing, staff for the recently new Queen Elizabeth hospital or example. The lack of quality supply should guarantee the high end rental market remains.
There are also other factors you have to consider when faced with this conundrum. Outgoings. Freehold properties have unknown costs, variable factors such as weather can affect the exterior of the property for example-the landlords responsibility to repair if they are damaged. Leasehold properties will incur service charge and usually ground rent costs to cover the development-money well spent in the long run? As the lease runs down, there could be lease extension costs incurred with re-sale in mind.
Throw in current low mortgage interest repayments, low interest in savings accounts pension reforms and you can see why we are being inundated with more and more investment buyers!
Contact us to discuss your investment requirements on 0121 604 4060 or contact the lettings manager Andy McHugo on [email protected].
*Stats are correct as of July 3rd – 6th 2015, Source: Zoopla and totallymoney.com
We recently switched from another letting agency to James Laurence, as we found their team so warm and friendly and loved the local aspect of the agency. The team have absolutely exceeded our expectations, making the changeover feel so seamless and finding new tenants for our apartment at really short notice. Lotti could not have been more wonderful to work with, going completely above and beyond to ensure our tenants could move in just before Christmas. We felt an immediate affinity with her and have so appreciated her attention to detail, quick thinking and creativity. She has made us feel so at ease, supported and like our property is in the safest of hands. Charlotte and Melissa have also been so helpful and lovely to deal with during the process. Having worked with several other agencies in Birmingham, I cannot recommend James Laurence highly enough. Look no further, they are the best!
Julia Collins 28 December 2022
The team at James Laurence was very helpful when I tried to find an apartment in Birmingham. I was in contact with a different letting agency but things fell through and they couldn't help me. A colleague of mine recommended James Laurence Lettings so I emailed them immediately since I was was moving from Sweden and the move would take place in less than a week.
The team at James Laurence responded within 5 minutes and managed to offer me a few different apartment-options. Things proceeded quickly and smoothly and just a few days later I had they keys to the apartment. James Laurence helped me every step of the way and went above and beyond to accommodate my requests.
The only minor negative thing I can say is that the interntal communication could be improved a tiny bit. I received slightly different information depending on who I was speaking with at the time. When I said I received different information earlier the person I spoke to said she would talk to her colleagues and then get in contact with me later with the "correct" information which she did and the issue got solved very quick.
Elias 15 October 2022
Our experience with James Laurence Estate Agents was absolutely fantastic! Melissa Wilson made the application and referencing process smooth and easy with excellent communication. Everyone we spoke with from the office was kind, helpful, and welcoming. To top it all off, the loft we moved into was even better than the pictures! We are thrilled with our new home and we would absolutely recommend James Laurence to anyone looking for a place to live!
Dominic James 2 October 2022
I have been very impressed with James Laurence, who have recently sold my property. Having previously had a poor experience with Purple Bricks, I instructed James Laurence to help sell my property. I have worked with Henry throughout the whole process and have found him to be very professional and knowledgeable as well as being efficient. It can't be stressed enough how important this is to have an estate agent that responds quickly, negotiates well and truly understands the market (especially during uncertain times like recently with the cover pandemic). I have briefly worked with Caroline and some of the other team members who also seem to be very efficient and friendly. Thanks again to James Laurence who I would fully recommend to anyone looking to Buy/Sell in Birmingham.
David Jolly 16 June 2022
I recently sold my property with James Laurence, and the overall experience was great. They demonstrated a good knowledge of the Birmingham property market when discussing sales strategy, marketing and pricing (more than I was expecting) towards the beginning of my experience with them. This showed when we achieved 2 asking price offers within the first couple days of showings. Once an offer was accepted, their support did not stop there, Caroline (Sales Progression) did a fantastic job at liaising between myself and the buyers side, helping to progress items and remove any potential blockers. I would fully recommend James Laurence to anyone looking to Buy/Sell in Birmingham.
