S car mor bo peo “gi in th Gr er pr pr pe pa fun pr to oth pe for gr in te lu bu mig gu wh de 9.6%. £56,500 £450 pr he li co do ne pr ha ha at (ni captain in th tw ve rms ve xuri co ro ow Wi Br “F e e op op op op ior mpeti y rh nsi ving fini ah rr ar s th ar y-t to 2005, o ck wa co dd my ds. er der er s ple Man ch ht ap rs tg for stm ow me ow abo an ro p e aps er er er er th am it in Man th eas na on ul HOME s in a o-l te rd ou ag est Lo pl of up ises do As of “I m ty ty. ty ty s, re te ar bo d mont ing n bo , a ess Re th ly me as s ent ut Gr ch ti ie e Da ev s 18 pla wi ndon he es et sear one re in e wh th . kn bal ge wh is ladder in — an ch th th ug on do ei ug an d apartm An ig goi te It’s th ea est in re fig en d turn, 90% of vi e th in t wh 10 one r ei nn e firm ov ow d a his est at th ve ht wn an o ee ht d -bedr co e tir h, mu t is a bu ch d dso offsp ng ht ve er re r one hou aim hel e, see lon Bri e no er ye ch th er muc 2012 lc ced at bu er Br th me lik pe ed his y-t nt th ing . -based th re st of nor wh rd cam Surr ha of to one s e n, ars’ Sequr it I t er p en tain ow th y-t g-t -bedd or nsi — ent se-p so e e,” at bu wa wh oft , “gr ring’s th to ’s 10% er a oo o-l first ap ir th th ry h ge en ma to gr e yo th. s Pa lv gr la th ne n y-t ball e on a e er o-l da ey bu en bett m tim pr nt ei em rug fo pr o t sa in oss an e in on et u st win. bi ra ri ow so kn his he er na e. xt m my r Wi pr don , y. cused dep op to oa il ys bu fl in o-l can et er ce to fel dl th gg ly mont cr wh e un va but e by ed for d ont Dri ging er ow to at yi op ing pr we fel co th ch injuri er in or y-t ar mp pr e Br ash, th in l kn est re gr up lue et osi p. ’t d eld Pa , uc op is ee sh in er av ve wo l ty me s ve ds” e o it ek op re I’v a er ow nt ow th in Ac squ off trust ow as o-l ic ra So at a on co h. s a t a lc th ty dir or an th er oid re stm on n alised e ma al on at er ve rl sa on e fi s. thing I’m he es substi ion ha n, ly cr th”, thr a me e me t ty nt e ar see by d a d, et er ad ect re wh le ti ys re stm Now of a sed wa famil ingt rke th alth his ent ir to bal e cr 33, mo es arn ce nt pr ou of turn, but an th king of ar fr or no th e at edi rug ma y th ne al by ent ic t co or , om gh fr tu e st e on d y wh t e to th of he e y at in om t ss) to ny ny te by , . e ” o ; John Davidson/Alamy; their Ea REX rn ing Se ar thesunda ch in fo te r ra a ctiv pr SUND ytimes.c of e itable map, ke AY o.uk post on TI MES /buyt table co de DIGI ole t on and in guide, In tmap TA our at ve L we st ek Ma to ep tw ensur rtina o of e Le our a es st thr ea fo ee-part cuses dy re nt on al buy inc wher -t ome o-le e to t 15.03.2015 / 19

mortgage payments, these had housing in the city — our data shows it to fork out every month — facing a double will fall well short of demand in years to whammy when prices started to fall. come — will underpin prices.” Stuart Law, CEO of the buy-to-let agency Where? Take advantage of young Assetz, is scathing about chasing capital professionals’ desire to live centrally growth alone: “Don’t pay for the privilege around B1’s hotspots of Brindleyplace of gambling on house prices. That’s and the Mailbox, a former sorting office outright speculation, not investment.” now housing a Harvey Nichols and a host This betting mentality left the centres of of canalside restaurants. Gross yields on cities such as Liverpool scarred by hastily two-bedroom properties here, priced thrown-up new-builds, a third of which around £185,193 on average, are 6.8% — stood empty by the end of 2007. When the beating the city’s average of 6.22%, developers downed tools, they sold off according to and . their stock en masse at discounts of as much as 40%, Law recalls. Yet because 5.95% mortgages dried up, rents soon soared — and the investors who had snapped up the Why? Badly hit by empty new-builds in housebuilders’ stock gained. “It went the recession, central Leeds now has a from overbuilding to underbuilding. “huge undersupply” of rental flats, Law Rental demand for city-centre flats has explains. There is plenty of demand: the gone through the roof, but very few city is home to three universities, Asda’s developers are building them any more.” HQ, more than 30 banks and Britain’s Since 2010, monthly rents across largest legal centre outside . The England and Wales have grown by 3% a opening of a new John Lewis in the year to reach an average of £763, “I know that next week I’m definitely going to get my rental Golden touch The Victoria Gate development this year according to the latest index of Your Move British wheelchair should only add to the magnetism. and Reeds Rains agencies’ 20,000 rental return, whereas in 10 years’ time there are no guarantees what rugby captain Steve Where? “I’d pick somewhere within 15 properties. The private rental sector has Brown invested in a minutes’ walk of the station,” Law says. been growing since 2001, accelerating the market might do. It’s not the biggest or most luxurious BTL flat in Accrington, That means LS1, where two-bedders during the crash to include 4m households near . Left, average £203,811 and gross yields 5.7%. (18%) in England and Wales by 2013, says apartment in the world, but it’s a sound investment” Liverpool city centre Or target student sharers with a the Office for National Statistics. is benefiting from terraced house in Headingley (LS6), says This all means there is plenty of more than £1bn of Jonathan Hopper, managing director of opportunity for income-focused development Garrington, the buying agency set up by investors. How do you choose? Compare Where do you find such returns? yield ranges at postcode level are the Location, Location, Location star the returns on properties by working out Reliable yield data is hard to compile, between 4% and 6%, careful selection Phil Spencer. “You have two universities their gross yields: divide the annual rent says Lucian Cook, residential research of the right area with a combination of within three miles of each other [Leeds by the purchase price, then turn the director at Savills. “Because of that, tenant demand and latent potential University and Leeds Beckett University], answer into a percentage. For example, a people often refer to average regional shows that returns of 7% are achievable, with the main social life for students £200,000 flat that lets for £10,000 a year yields.” However, these are exceptionally and 10% in the extreme.” based in the centre of Headingley.” has a 5% yield. blunt instruments: reading that returns Beware, though, of simply picking the Returns on two-bedders here, which However, gross yields don’t take into in the northwest average 7% won’t help lowest-value, highest-yielding postcode: cost about £135,000, average 6.1%. account void periods: budget on two you choose between Liverpool’s docks buying in a run-down area could make it Since 2010, Nick Jones, 27, a Leeds- empty months a year. Nor do they include and Manchester’s Piccadilly. harder to find reliable tenants, meaning based contracts manager at his family’s paying the mortgage interest, lettings Using Rightmove asking prices and more voids and the spectre of the rent construction firm, has invested in five agent, maintenance or service charge. rents for the last three months of 2014, not being paid. Here are five of the best houses west of the city centre with his Once you’ve deducted all this, you’re Savills has crunched the numbers in picks for balanced investments. brothers, Andrew, 30, and Mark, 32. unlikely to break even on a gross yield of every postcode district across 12 cities “For retirement purposes, we thought less than 4%. Take our £200,000 flat: on a where yields on two-bedroom homes Birmingham 6.22% the best way to save would be property,” typical 4% interest-only mortgage, with a are about 6% (see the full data at Nick says. “We’re in it for the long haul; 25% deposit and said deductions, you’ll net thesundaytimes.co.uk/buytoletmap). Why? “The scale of redevelopment in we don’t take any money out.” Their two- the not-so-princely sum of £27 a month. “It’s when they dig into the detail at Birmingham is notable,” says Grainne and three-bedroom homes, two of which For a better income, look for a gross postcode level that canny investors are Gilmore, ’s head of UK they built themselves, cost between yield of 7%-9%, Law says. If our £200,000 able to find some real gems,” says Miles residential research. The Big City Plan will £85,000 and £100,000 each and have an flat let for £15,000, yielding 7.5%, the Shipside, housing-market analyst for help loosen strictures put around the city average gross yield of 8% — well above the monthly profit would be a tidier £344. Rightmove. “While the most common centre by main roads, allowing it to two-bedroom average for their postcodes expand. It will also ease access to desirable of LS13 (5.8%) and LS28 (5.2%). residential areas such as the Jewellery Quarter, where Victorian factories are Liverpool 5.97% morphing into Shoreditch-worthy lofts. “A longside this there is a business Why? The signs are in the sky: this Online or hands-on: how to choose an agent renaissance, with demand for office space month, 17 large cranes are towering hitting a high at the end of last year,” above the city centre, where some To manage or not to manage: that is the commission typically charged by high- Gilmore adds. “The lack of supply of new £1.13bn of development is under way. question. At least, it is once you own a street agents. .com, which Prices in Liverpool, still 15.2% below buy-to-let. The rise of online letting has become the largest online sales agent pre-crash levels, rose 2% over the three agents, which allow private landlords since launching last April, charges £199 months to January — faster than to advertise on the big property portals plus VAT for its “tenant find” package. London’s 1.5%, according to Hometrack. for little or no charge, promises a But beware, warns Christopher Hamer, “Now is a good time to invest,” says shake-up of the market. “Why pay for . “Some online £399,995 £64,950 Henry Sherwood, managing director of an ’s overheads when you offerings do little more than act as a the Buying Agents. “We’re getting a lot can get the same skills online at much notice board for your property.” He of interest from family offices and funds lower cost?” asks Rob Ellice, CEO of advises landlords to obtain quotes from looking at Liverpool — in one case, to easyProperty.com, which launched last three separate agents — whether online buy an apartment block with an 11% September with the backing of the or traditional — and to check the terms: gross yield. There’s just nothing in the easyJet founder, Sir Stelios Haji-Ioannou. how frequent are inspections? Do they south that can compete with that.” Ellice estimates that online agents now protect the tenant’s deposit, or leave that Where? Of almost 250 postcode districts control 3.5% of the lettings market, up legal responsibility to you? analysed by Savills and Rightmove for from 1% a year ago. If you live far from your buy-to-let, a Home, Liverpool’s L4 has the highest EasyProperty.com — now the biggest trustworthy local agent can be worth their MANCHESTER LIVERPOOL gross yield, at 10.6%. This area includes online letting agent — offers “pick’n’mix” weight in gold. The same applies if you Anfield, where Liverpool football club’s services, ranging from £10 a week for lack the time to deal with tenants calling It’s not cheap, but this two- Reeces Ballroom, in L1, stadium expansion forms part of a £260m adverts on Rightmove, and on Christmas Eve because they don’t want bedroom flat in the Edge which hosted John Lennon’s regeneration of the area, and two-bedders Zoopla to 3% commission for full property to change the overflowing vacuum-cleaner skyscraper, M3, has river first wedding reception, is average £54,040. But Sherwood warns: management. For tenant-finding with all bag/can’t bear to empty a mousetrap/are views and a wraparound being turned into 91 studios “At the moment, that is quite hardcore. the frills (from hosted viewings and being “eaten alive” by bed bugs (yes, balcony, and is a block away and one-bedders, from It would be a long-term investment.” professional photos to check-in), the total these have all happened). Expect to pay from Harvey Nicks. The £64,950 to £99,950. The The city-centre development hotspots bill would be £445. On a £1,000-a-month 10%-15% commission for a fully managed monthly rent of £1,700 developer promises 6% net of L2 and L1, around the swish Liverpool rental over a one-year period, this would service, including tenant-finding, rent means a gross yield of 5.1%. yields for five years. One, Britain’s largest outdoor shopping equate to less than half the 8% collection and maintenance calls. 0161 830 5800, 01865 202700, centre, are a safer bet: yields on two- huntersnet.co.uk propertyfrontiers.com bedroom homes, which cost about answ home pr an av to Up su an in hig th one Wh ce co is ex Sta ac ro la in Th ye offi Wh Ma ( tw av £ rg Yo se e we 167,342), ch nt co er ar er ic pansi nstru d d th M1, th o-bed e -an tisti he nchester ce y? er - ce est e ag ag yi th nu re rd u’ll £ e e by th ll pr er HOME an e? st gr 150,000, nt spa to eld nor cit e e e Th d-co wh ing an un is mbe cs. stu op on cti ow mor to d yi tr tw re (5.97%). ge 20 “Good Sp der y at er s ce der tw at end er eld ic th, , on Wh dent Can to — t of of o-bedr th ” e’s inningfi r ming it h ea e ti lo an wa o-bedr al Ho of s s th wh th 8.2%. is of es wa in th pot y at we ting ary and on on hig y a e s No po 20- exc e no cl pp an in ’s ne av re tim y ic le r ent Offi g Metr ude An Yo tw ve he oo pu mor t rth er h an Wh al er w re t in a th eed eld far oo Sa to e in u’ll stm ia also coa st o-bed aging m turns, thir lat bu to d ce home sa e s ov er arf. l, ol m e, 39-y s Pi Man in lf th wa ys. be pr Li ion sin re n for er ts ent — ink ne pa d or cca apartm a boasts e ve fi ic turns hin Qu te Its (M4), sin ess th £1.5b y xt Th th der £195,962. le ve s d in ch es Na s ear-o but rpoo rfr tr dill in mor ve e art e ar d do e de ce 6.67% ye est Eur am of ti bu s past ont nor l wi th e cit hig y ona er (5.4%). ar ve or th ars. of n 2001, l’s ent dir £163,003 er e zz: typ e ld sta op th syst y’s , e lop th’s e for in in her cit de wi s la l ectl 9.2% s e mor ic ti li st L3 in M3, ca er y th em — on a all ving y , de e y . ( tw plac an £ Tw home nei Alli Alamy; just op is distan Wh furth “Lo ac (12%) va far mig Wh Re £ 216,611, Sh Ju 108,734) co lue en d o-bed ading o-bedr gh fr er y? Peter ed ndon ht had ed st ITV’s rd er om er s e? in bo s, ce Tarry an Lo nor Un be, wo ing ro for , 2019 offi ” uring an “A der of th d ndon se dema gla od’s Sh gi oo th ne but 5.58% to cit th ny at th ces £897m an ving 12.3% s er mor m w of e . at Lan y-ce e wh at d it In Gr , vi wo so ne nd home an pr Medi sai is s str ew alm er ou a an ut th d hou ic w od d due nt d co — on yi e upgr Re he e . s es ada sh sta sta ost re wi eld Cr aCi sa ul this ye , out g se-p gistry ast op in to M5 d ossr ti ys. thin ti co yi ar Stu ade ha tyUK, of on on pa s M3 dri start eld (9.4%), Be mm ri to is lat lf 5.8%. ail di ci , . will ce wa ve rk s dat wh also th Ty av Ja er ng os ut of is shir turning gr e nua pr lking er th pic this a. ic er in be Lo due 7.1%. pr ow ag we ic e h s, to al e ry, ndon ic BBC es go ha e th ye to ll wi to e od,” s wn ar. is th th e av her Cl te of for an Va Th firms an cl th do yo 5.5%) ( Bu yi wi cost RG surr home tw £ ust eld rr ap e Leafy 213,860; er ll u d d or th ying wh o-bedr am 1 e, co ey cit ac ou on aging BG fin post ha £233,970, er st s av s es om at at mm e y’s ep of Pa put nd an m. in of th er in Gr for 5%, Ca cod rk 5.7%. ing of ag e ce re oo th IT s ut RG ou Re £268,541. ve , ha nt e e er m e in p. turns wi 2 rsh lf s cl bef th fr of ud am om or wh tw ing ar e (R e o-bedr th bu

at

and pr

Mi

quo

G4) Ge

slig appeal

on

buy

co

Ha

co cr

e Be

a

borr

br

an

ying looking

Ge

th opertytribes.c

to

Go

pur

mon

the

Ex

t Fi

edit mpe

cr

cap deposit

uld

the

ve ok

te

fo

advic pr

ht

ey t

see

ve

a independen amine is

osoft,

to

ow

chasing

s

re

yo

er

operty11

righ

a

pr jeopar

oo thly

ly

re

mark

’d on

it tition

to a things

a thesundaytimes.c

business

ur

applying

.

to

operty

what co

al,

e

Mo fo ma m Vi

lo

yo

t landlor

pa

financing

find

and of

inc

rd

type

r yo

we

ct st

ur et

Or yo ma

home

dise and

y at

gn

to

fo

ome

would

ur ,

or

buy 8.c

ideal

to ur

out

ballpark

iden

but om, in r

ac

r

leas

of

ensur t,

ny et

ex

d

long-

fo

ia

ta

yo plan.

pr om

think whole-o

le -t

buy

fo

how

is

pect

r

choose

n rg

tic operty

s landlor

ur

t

re

o-le

a

in

suit

rums

ve

et

25%

al e

nt

mort

-t

chanc

te

plac

Who

ations

ry

ther

much

te re

about

er

to

t o-le

rm

yo

lender

o.uk furbishmen

nan

diff

f-

dz goldmine.

such

do

one e

gage, u

is Br Br

e

pric

is

mark

t.

e

be

one.c

bes

er ze

ar t?

indle a

um /buyt yo

to

Bu

of yo

be

fo

that en

e

n e

ho

s

as

Do

u

ur t ensur

ge

ying

re

check

no

gr

of

fo

re

et t

deal o.uk co

tspo

yplac the fr

n’

tting

owth.

quir

re yo

ole

would

ot

mort

err

om

uld

t

Sp

t

fo

her

u

yo

e

tq

liv or

t

e

yo

eak

r st

yo e, a

in

uiz

u

ely

s

gage a

s

art

ur

loan

u

that in to

B1

to

pick ve

p, st W house Th £ We de Pa fr six in the ca Ho with pr a of decision-making, business. which Sa pr the an Mo 250 anchise fo oduc operties Wit He re specialis tached e te rtner ndown co pe, rle y st shar rmer pair er duo na ur his would y and h ,0 Su 15 the on er change. tal se, and s, tr 00 er decided wif sse spen , , ai he the s y ne who re and Pa had “W class, Jo the to , ni t e, fo now Ni end at co be x, nes, twork buy rk ge ng y e r t h-club ck Sa nf pa te tween re bo bough liv about hen ano shar ther golf Af an -t up iguring little wa rr ndr run ying Jo to 51, es th te ac o-le the d Pl ther nes rd buying the club e r been co a, — in ed ad as a at much manager t 2009 s, did the £2, fr risk ur ts, 46, and Le fo a inum ” vi me om houses wiv £ a to se to sa handful rmer ce 70 at 40 the ea workload, looking join -taking and ge t add ys es se ev herhe in £19 deliber fr 0 ch and at ,0 y Pr ther t om ve en Su a Mo of 00 BBC . imagine fa an re daugh operty ex 0,0 in ra mon tu 20 rr mily Cr nt ad rle of the tr fo l to per — Cr ally ey at aig ed 00 a line 13 y, r semi- the aw and, in th. ion, , a te 45, . to ve to le r, st y, 15.03.2015 / 21

bedrooms, so they could be let out on a place,” she says. “The key D, though, is room-by-room basis, as houses in ‘document it’.” multiple occupation. Although they are Draw up a declaration of trust in more work to fill than a single tenancy, advance, dealing with the ifs and buts, their average gross return of 16% is three and stating who pays for what — times as high. including non-money contributions such “Understand each other’s key motivations as DIY renovations, Fisher adds. “Are before you start looking for a property, or the contributions the same as the else you can quickly get carried away,” says ownership? They don’t have to be.” Morley, based in Cobham, Surrey, with his Consider tax, too, not only on rental wife, Victoria, 42, and children, George, 11, income, but also capital gains tax on any Joseph, 6, and Jemima, 4. “We put in place increase in value if you sell. Stamp duty agreements to protect ourselves. That put could be due a second time if one buys both our minds at rest,” he adds. Should one the other out. These couples have partner decide to sell, the other has first Fisher advises most people who buy refusal to buy at the market rate. together outside a relationship to own a jointly invested in With buy-to-let mortgages requiring a property as tenants in common, rather Clubbing typical deposit of 25%, you would need than as joint tenants. The former means at least £56,000 in cash to buy a each owns a share of the property that buy-to-let houses £200,000 property – taking into account passes to heirs named in their will, stamp duty (£1,500); mortgage fee instead of defaulting to the co-owners. and even a golf (£2,000); legal fees, valuation and survey Buying in this capacity would also likely (£2,000); and insurance (£500). To stump mean paying less tax — and having less course. Here’s how up all that, many of us might consider paperwork — than buying as a company, investing with friends or family, as Morley for which you should seek specialist advice. to do it for above- and Jones have done. There is one exception, though, says Go in with your eyes wide open, says Stuart Law, chief executive of the together par performance Rebecca Fisher, a partner at Russell-Cooke property investment company Assetz. solicitors. “Ask yourselves the ‘what if’ “If you are buying the property and questions on the 3Ds — death, divorce and doing it up to sell on, it is better to buy debt. If you can’t talk through the difficult as a company as the tax rate is lower.” conversations at the start, you probably shouldn’t be investing together in the first Martina Lees