A view from Peacock Finance MD and Owner, Darren Peacock 

Hull has held the mantle of biggest UK property hotspot for over a year now, with property investment clubs – who train would-be landlords to make invest for success – recommending it as the number one place to buy. 
 
Why is that? Well, there’s a perfect storm going on, with the positive PR bow wave created by Hull’s City of Culture status and the regeneration this fuelled, coupled with property prices which remain extremely compelling compared to rental yields. 
 
I get asked a lot if I think it’s too late to capitalise on this trend and my answer, every time, is ‘no, so long as you do your research and consider very carefully what and where you invest in, and what your personal priorities are. 
 
This is because the legacy of Hull’s City of Culture status is set to last until 2021 and beyond, and the knock-on effects of the renewed interest it has already generated in the city are as yet to unfold. 
 
Let’s consider the economics for a minute. It’s still possible to buy a decent property in the city for £60,000 and rent it out for £550 per month. That’s a yield of roughly 10 per cent (rental income as a percentage of property value). Compare this to somewhere like York where you might have to spend £300,000 to achieve £850 a month and it becomes a no-brainer. Not only are the comparative ratios compelling, but Hull offers a lower entry point in terms of the amount of capital you have to have in the first place, to get on the property investment ladder. And the yield is at least four times higher than in London, which explains the increased interest from investment buyers from there and indeed the rest of the world. 
Let’s consider the economics for a minute. It’s still possible to buy a decent property in the city for £60,000 and rent it out for £550 per month. That’s a yield of roughly 10 per cent (rental income as a percentage of property value). Compare this to somewhere like York where you might have to spend £300,000 to achieve £850 a month and it becomes a no-brainer. Not only are the comparative ratios compelling, but Hull offers a lower entry point in terms of the amount of capital you have to have in the first place, to get on the property investment ladder. And the yield is at least four times higher than in London, which explains the increased interest from investment buyers from there and indeed the rest of the world. 
 

Has the bubble already burst? 

The other common question I face is ‘am I too late to get on the property investment bandwagon?’. Again, my answer is always ‘no – so long as you consider carefully what you’re looking for’. 
 
For example, the cheaper properties to be had are often in less salubrious areas of the city. This doesn’t necessarily matter if rental income is your only objective, rather than capital appreciation. However, you might just strike it lucky and achieve both if you do your homework and purchase in an area of the city likely to undergo a spruce up or increased positive activity in the years to come – such as an investment programme, or a new employer or leisure venue due to move in nearby. 
 
It’s not just in residential rentals that the opportunity lies, though. There is a little-known loophole that not many investors capitalise on – a host of old buildings and empty offices with what’s known as ‘permitted development rights’ to transform them into residential accommodation without planning permission. The City Council has introduced this to help it catch up with stringent government new home provision targets. 
 
This means there are lots of opportunities from a small developer’s perspective. These properties are fairly cheap to buy, too, and with relatively low competition compared to the houses of multiple occupancy (HMOs) that are in much higher demand by landlords chasing higher rental yields. 
 
My simple mantra is that ‘now is always the best time to get into property’. While the opportunities and challenges might be slightly different depending when you jump in, bricks and mortar, historically, has always offered rewarding returns in the longer run. 
 
Traditional residential property investment remains a good option, with more people living longer, no more land being created and the Government chasing a demanding new housing requirement. Because people increasingly can’t afford to buy, there’s also a strong likelihood of rental property remaining in demand. In this respect, we’re continuing to follow the European trend where almost everyone rents. 
 
Traditional residential property could be a good investment option for you if your priority is long-term investment and you’re planning to sell off eventually to boost your pension pot, for example. 
 
However, for day-to-day cashflow now, you’d need a lot of these properties to make them pay, or you’d need to convert and run them as houses of multiple occupancy or serviced accommodation. And then there are the implications of the Government’s recent changes to taxation rules (see my recent blog for more information about this). 
 
 

Unprecedented times 

I’ve been taking calls from investors as far afield as China, France, Italy, Germany and even Hungary, keen to seize the profit opportunity Hull property represents. I’ve also seen general investor interest grow by 40 per cent over the past year – another positive sign that is likely to fuel further optimism and growth. 
 
I’ve been involved in property in this area for the past 16 years and I’ve never seen anything like this. 
 
Interest has been steadily growing over recent months, thanks to the vote of confidence from property investment companies. 
 
This is down to the comparative yields, coupled with the fact that positive PR around City of Culture means that they stand a good chance of making capital returns on their purchases in the longer term too, because values are likely to grow. 
 
The other interesting trend is a movement from the traditionally popular areas of west Hull and the university district, further east. 
 
The arrival of Siemens has had a massive knock-on effect in many ways. Firstly, it has created employment and therefore improved affluence in east Hull, not just in terms of people employed at the factory itself, but also other companies that are within its supply chain. 
 
Other businesses are also growing as a result of the Siemens ripple effect, and accompanying this is an increased demand for executive and contractor accommodation. A lot of the landlords buying into Hull at the moment are therefore converting the properties they buy into multiple occupancy houses, which they are letting out as serviced accommodation during the week and then as ‘holiday’ accommodation for people visiting at weekends. Doing this, they stand to make upwards of £2,000 a month in income from an investment of as little as £45,000. 
 
Not only that, but this surge is also supporting the local economy because the new investors need management companies and letting agents to source tenants and look after their properties for them. 
 
 

So, what’s the long-term prognosis for property in Hull? 

I think it can only be positive thing. 
 
If it was just a case of outside investors swooping in, buying ‘cheap’ property for a quick win and then selling it off again a couple of years later, that would potentially flood and damage the market. 
 
However, I believe that the combination of factors currently at play suggest that will not be the case. Industry is booming, tourism is on the up, perceptions of Hull are changing for the better globally and there is an increased optimism and sense of aspiration in the city. 
 
This is bringing in talent and investment, and I think these are the kinds of things that change the whole dynamic of a place forever. In my opinion, the residents of Hull can only benefit from this, and can hopefully look forward to a much rosier, and more affluent, future as a result. 
 
Property training companies act as intermediaries for people interested in investing in property. They act as a kind club, helping to promote and source suitable properties, and supporting their investors in managing them appropriately to make the most of their nest eggs. This is an increasingly popular form of investment currently, with interest rates on cash investments so low. 
 
If you’re reading this and are interested in property investment, you can contact Darren at Peacock Finance for some no-obligation advice on your options via 0845 5197104 or email info@peacockfinance.co.uk 
 
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