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The resurgence of the one bedroom apartment!
As James Laurence hit a second month in lettings, we take a look this month at where the astute investments in Birmingham City Centre are, as the one bedroom city centre apartment is fast re-emerging as the must have property in the portfolio.
Birmingham has just been named by This Is Money magazine as one of the top five UK cities for buy-to-let investments, with the view that the city centre has seen major regeneration over recent years with more in the pipeline – with the City Council announcing that over the next five years £10.5 billion worth of investment is planned for the city.
It is no wonder then that over the last financial quarter, rental asking prices have increased on average by 6%, with the average one bedroom apartment in the city centre (taken from core postcodes B1, B2 and B3) in this period being £706.00pcm and the average two bedroom apartment in the same period and area increasing to £1,025.44pcm.
An excellent case example of the growth within the city is this apartment in Islington Gates, Fleet Street, close to the central Financial District within the B3 Postcode. A property we have just sold, 7th floor, large balcony, previously purchased for £149,995 back in June 2004 with a rental income of £600.00pcm, giving them a gross 4.6% rental yield. We have recently re-sold this apartment for £135,000 and interestingly it has been let at £695.00pcm meaning the landlord now gets a higher rental gross yield of 6% an increase in yield of 1.4% in 10 years. Though the city centre has experienced the lows of the recession to the extreme, the irony now is that such investment purchases in the area, commanding such rental yields, is driving the prices back towards that of the 2006/2007 era. This now results in a shortage of quality new properties on the property market, current savvy vendors are taking the opportunity to take advantage of the buoyant market, with expectations not only looking for a good instant return but also with one eye on capital appreciation!
In July, the Birmingham Post reported that Birmingham is a hot spot for buy-to-let mortgages. This is in part due to HS2 and other developments in the city making Birmingham the top buy-to-let city outside of the capital. With three quarters of the landlords in the city owning more than one property and high rental returns compared to other areas of the UK, Birmingham is a fast emerging buy-to-let market.
Contact us to discuss your investment requirements on 0121 604 4060 or contact the lettings manager Andy McHugo on [email protected].
