In this post we are going to take a look at why it is a good idea to invest in some of the UK’s regeneration areas if you are in the buy to let market. Let’s face it, buy to let has taken a hammering recently with government tax changes and mortgage lenders making finance harder to come by.
So it is time for you to invest in areas that will give you the maximum advantage in the buy to let space. We are talking about the best returns from rental yields and the best capital growth opportunities here. Does that sound interesting to you? OK then please read on.
You may have to go further afield
Going in to 2020 we highly recommend that you consider looking further afield for your buy to let investments. It might seem quite scary going into areas of the country that you are not familiar with, but if you are prepared to do your homework and make the right connections then this will be worth it in the long term.
If you live in the South of England then it is unlikely that you will get the best yields from buy to let properties in London and the South East right now. There is likely to be strong demand in the private rental sector in these areas but when you consider the cost of investment and the likely rental income it may not make good sense.
People are a lot more savvy these days and they know what they should be paying in terms of monthly rents in specific areas. The other issue is that capital growth in London and the South East is nowhere near as good as it used to be and this is unlikely to change in 2020.
Look for UK Regeneration Areas
So how do you find out about the best regeneration areas in the UK? Well there are a number of ways that you can do this from a simple search on Google to contacting local authorities and asking the question.
But we have some useful information for you right here. Glide, the UK broadband company made a series of FOI (freedom of information) requests to councils up and down the country to find out what cities had the most empty residential properties and commercial properties.
Birmingham was top of the list
In September 2019 they discovered that there were over 600,000 empty buildings in the UK which were a mixture of residential and commercial. That is a lot of empty buildings! Not all of the councils had the information available, but from those that did the city of Birmingham seemed to have the most potential space.
The Birmingham City Council told Glide that according to their records there were over 8,000 residential properties and more than 7,600 commercial properties standing empty in the city and suburbs.
In second place was Liverpool with over 15,300 empty buildings followed by other Northern cities Manchester, Bradford and Leeds. The city with the highest number of empty residential properties was Liverpool at over 11,000 while Bradford had the highest number of commercial properties empty at just over 7,900.
What does this mean for the Buy to Let Investor?
Well it means that there is an opportunity to turn these properties into high value residential accommodation for the private rental sector. Just because a building is labeled commercial at the moment does not mean that you cannot change it. Look further afield and study these areas for good investment opportunities.