Retirement savers are among the first to mention that property still beats a pension, but many readily admit that the ins and outs of property investing can be intimidating. Now there’s an easier way to invest through Portico Portfolio.
Portico, the leading sales, lettings and short-let agent, has created this service with the intention of helping landlords or anyone sitting on savings make profitable investments in up-and-coming neighbourhoods up north. These locales typically offer below-average entry costs while allowing property investors to achieve higher yields.
Better still, this new service handles all aspects of property investing and management on behalf of its clients. Properties are transferred to a Limited Company so that interest is tax deductible, and income may either be retained in the company or taken as dividends. Tax efficiency and profitability are chief aims.
London vs Up North
Data from Portico’s Rental Yield Map illustrates that average long-let rental yields in London vary from 1.5 to 6.7 percent. The highest rental yields at present are found in the south east borough of Bexley, near the Yarnton Way Sewage Works located between Belvedere and Abbey Wood. The lowest rental yields are found in Mayfair, primarily at addresses located on the prestigious Old Bond Street.
Long-let rental yields at northern locations are far higher than London long-let yields. Recent research from Portico shows that landlords with properties in Liverpool achieve an average long-let rental yield of 8.3 percent, and that Liverpool’s highest long-let rental yield stands at a staggering 13.6 percent. Manchester’s long-let rental yields average 6.5 percent and top out at 7.6 percent.
With the help of Portico Host, northern-based properties can provide even higher yields when utilised as short-term lets for the ever-growing tourism market. Assuming an occupancy rate of 50 percent of the year (typical for these properties due to higher seasonal demand), short-let hosts in Fairfield achieve an average rental yield of 27.2 percent in comparison to long-let landlords, who typically achieve a yield of 13.6 percent. This is the highest yield in any northern city in both Manchester and Liverpool.
In addition to this, Liverpool and Manchester have no listings caps, meaning that landlords with short-let properties may offer those homes on a continuous basis if preferred.
The table below provides details on the best performing locations for short-term let yields in Manchester and Liverpool.
|Area||Short-let Yield (%)||Short-let Gross Income||Rental Yield (%)||Rental Gross Income||Avg. House Price|| |
|Anfield, Liverpool||22.7%||£23,766||9.6%||£10,457||£102,772||L6, L4|
|Orrell Park, Liverpool||17.5%||£13,779||7.5%||£6,360||£91,500||L9|
|Vauxhall, Liverpool||15.5%||£20,885||6.8%||£ 20,885||£ 139,061||L2, L3, L5|
|Hulme, Manchester||15.1%||£20,158||6.9%||£9,080||£133,333||M15, M16|
With Liverpool planning a new stadium for Everton football club along with a £250 million road infrastructure investment and a £14 billion regeneration, its economy is growing stronger alongside its infrastructure. An ever-expanding population of students and young professionals, paired with low property prices, make Fairfield, Walton, Kensington and others top choices for investors.
Manchester’s population is expanding rapidly and improved transport encourages an impressive influx of visitors and tourists. In Hulme, £400 million has been invested into regeneration to date. Just a short walk from Manchester city centre and with a diverse array of bars, eateries, and shops, Hulme is a popular spot for young professionals.
And the good news is, Manchester and Liverpool landlords can benefit from more than just high yields. Despite a trend that shows London property prices plateauing, forecasts predict that the north-west region and its cities will benefit from the UK’s most robust levels of capital appreciation over the next half-decade.
On analysing Land Registry data, Portico has found that average property prices in Liverpool have increased by 19.34 percent over the past five years, jumping from £108,267 in June of 2013, to £129,562 in June of 2018. Manchester’s average property prices have sustained incredible growth, increasing by a massive 47.76 percent. In June of 2013, the average price was £119,951; by June of 2018, the average Manchester property sold for £177,243.
Reports indicate that the north west will likely enjoy continued increases in property price over the next five years. The predicted price increase stands at a minimum of 21.6 percent.
How does Portico Portfolio work?
Working in partnership with London-based Accountancy firm Accounts & Legal, Portfolio Portico offers a streamlined process designed for simplicity, profitability, and tax efficiency. Clients begin by providing a budget of £150k or greater for property investment, after which Accounts & Legal create a special purpose limited company on behalf of the client. The limited company allows the client to maintain their status as 100 percent shareholder. Additionally, it acts as the client’s investment vehicle.
The Portico Portfolio team then source strategically chosen properties in the most desirable city centre locations around Liverpool and Manchester. Besides sourcing properties, Portico Portfolio manages the entire process including sourcing additional finance, surveys, conveyancing, and management. At the same time, Accounts & Legal continue to provide expert tax advice.
After property / properties have been purchased, Portico Portfolio handles all aspects of management by applying Portico Lettings or Portico Host services as applicable. Property owners are billed once monthly for added convenience.
Since properties managed by Portico Portfolio are owned within a company structure instead of being held by an individual, interest is tax deductible. Additionally, clients have the opportunity to take income as dividends or retain it in the company. The latter option allows for a tax-efficient exit when the time is right.
Property owners are free to purchase and/or sell properties at any time within the company set up by Accounts & Legal. Additionally, they may transfer or sell their company shares to other parties.
In the event that commercial financing is required, Portico Finance can help to arrange for it (typically 50% LTV). With £500k equity, for example, a client may purchase a portfolio of approximately £1m*.
In a recent press release, Portico’s Marketing and Business Director Fiona Vetch commented on the launch of Portico Portfolio:
“With the launch this year of Portico into Liverpool and Manchester, we wanted to create something unique that makes it easy for London landlords to invest in the north west.
Launching Portico Portfolio allows us to combine our lettings and Portico Host service with our financial services expertise, to generate impressive and tax efficient yields for property investors.
We hope Portico Portfolio will allow both seasoned and inexperienced landlords to take advantage of our strategic advice and knowledge of the market to build strong rental portfolios.”
|If you are interested in taking advantage of the current northern buy-to-let boom as a way to maximise savings for retirement and more, please contact [email protected] or 0207 099 4000 to learn more about Portico Portfolio. Portico properties are available exclusively through Portico Portfolio, and are also sourced from the open market. |
If you’d like to find out how much your property would make per night on a short let platform, or if you were to sell it, try Portico’s instant Property Valuation tool: https://www.portico.com/valuation/llb
*Actual rates available depend upon your circumstances. When contacting the Portico Portfolio team, ask for a personalised illustration.