Where’s the best place in the UK to invest in property bonds? One of the most common answers when we talk to investors interested in property is ‘London’.
Overall, the theory is a sound one. It’s one of the economical capitals of the world, not just the UK, after all, and stories in the press consistently tell of foreign investors fighting to be the first to inject tens of billions of pounds into the London property market.
It stands to reason then that property bonds in London represent a potential slice of an enormous financial pie. Not so if you scratch below the surface; as a consultancy, we’re keen to point out that the best property bond opportunities with the strongest yields are much further away from the capital than you may think…
How to invest in property bonds in areas of high growth
If anywhere, the properties with the strongest yields are typically found further north. When investors ask our consultants how to invest in property bonds to diversify their portfolio and where the best yielding options are in the UK, the answer over the previous few years has typically been the same: focus on the North West.
Liverpool, Manchester, Preston and similar towns and cities represent the best place to invest in property bonds; a theory that’s been recently been backed by research published by TotallyMoney.
TotallyMoney has found that ten of the highest-yielding postcodes include none from London, with areas in Liverpool making up the top three. TotallyMoney’s investigation was thorough, analysing more than 500,000 properties listed for sale and to rent in October 2017, overlaying average rents and asking prices, and more.
They found that landlords renting out a property in an L7 Liverpool postcode were receiving an astonishing yield of 12.63%, while L6 and L15 postcodes were netting them yields north of 10%. The latter figure is also true for properties in areas including Plymouth, Cleveland and Preston.
In fact, when extended the list to the top 25 postcodes, London still isn’t involved, with properties across Scotland, the Midlands and the North East entering the mix.
Finding property bonds with the highest yields
The reasons are various, but one of the most popular is that these cities have a high turnover of students. Prices in Liverpool especially are boosted thanks to the area’s student population of 70,000, while the other areas we’ve mentioned have a typically high influx of students looking for affordable accommodation.
Something which isn’t as achievable in London, especially if you don’t have the time to fully investigate the landscape and wisely invest your capital. Bonds also represent an opportunity for investors to potentially grow their savings through property without the hassle of becoming a landlord, providing maintenance, dealing with problem tenants and other issues that may arise.
FJP Investment has office locations throughout the UK across areas where property yields are at their highest. Discovering the potential benefits of the UK property market is easy, taking advantage of them is another story and will always come down to liquidity and appetite for opportunity.