Yields 6%-plus available in this investment hotspot - claim

A Leeds property agent is making the case for investment in his city.

Neil Dawkin, director of HOP, says his firm’s investment division has agreed over £1.5m worth of investment sales. 

And it says it’s now preparing to sell a further £5m worth of off-market investment properties over the rest of this summer.

Although some of this is accidental and single unit landlords wanting to exit the market, it’s largely being purchased by professional landlords and overseas investors he says.

“The main difference in the current market is there are fewer first-time investors now, who are more circumspect due to the cost of borrowing, regulatory changes and tax implications, which makes it a bigger leap for them” he suggests.

“We’re typically seeing older landlords deciding that now is the time to cash out and sell up. Many don’t want to adapt to the potential new legislation proposed in the Renters Reform Bill and instead are taking advantage of the price rises the market has seen in recent years. In their place, a newer generation of investors are buying and modernising the properties for today’s market, with our typical clients now in their late 30s and 40s.

“Even though The Bank of England increasing interest rates to 5.0 per cent certainly isn’t helping the market, many experienced and professional investors, who think long term and block out the noise, see this as a good time to add to their portfolios, because they are competing with fewer buyers. 

“They’re focussed on the medium to longer term returns and will often have larger deposits or be full cash buyers, so they are less impacted by interest rates.

“Plus, rising rents, which have grown by approximately 10 per cent in the past 12 months, still make buy to let a very attractive investment, especially because there’s a shortage of available rental stock.”

He says most of his investment clients are based in London and the South of England and are attracted to Leeds because prices are much lower, meaning they can achieve yields in excess of 6.0 per cent.

“This is boosted further by the city’s four universities, with more than 60,000 students, which also drives demand for houses in multiple occupation HMOs from both investors and tenants. We’re currently progressing several HMO acquisitions and sales for our clients, as well as undertaking refurbishment projects on properties we secured for our clients to further increase the rental and capital returns the HMOs have to offer.

“We’ve recently handled acquisitions for buyers from the likes of the US, Europe, Hong Kong and Singapore, who want a foothold in a stable and growing housing market.

“The majority then go on to buy further properties as a result. One such example is a client who bought two properties last year and is seeking six more this year.”

Dawkin claims this is helped by the profile that Leeds has earned itself in recent years and the fact that it’s widely recognised for being a vibrant and contemporary destination. 

He believe its economy is extremely strong across many sectors including legal, financial, technology, retail, medicine, manufacturing and creative, as well as TV and film as part of Channel 4’s continued investment in Leeds.