Investors to profit from PRS boom, says CBRE
The West Midlands has been identified as a "property hot spot" for investors looking to cash in on the private rented sector (PRS) boom. That's according to research from property consultancy CBRE.
Analysis by CBRE found that out of 21 UK cities, Birmingham, Coventry, Stoke-on-Trent and Wolverhampton offered some of the highest returns on rental properties for investors.
Of the four locations, Coventry has the highest gross yield at 6.3 per cent, closely followed by Stoke (6.1 per cent), Birmingham (6 per cent) and Wolverhampton (5.8 per cent). The highest yield was in Leicester, where investors can expect returns of 6.4 per cent, compared to the lowest in Edinburgh at just 3.8 per cent.
According to CBRE’s research, the private rented sector has grown dramatically over the last decade and now accounts for 70 per cent of all occupation in the UK.
Jonathon Matthews, a director in CBRE’s valuation advisory team in Birmingham, said: "Restrictions on the mortgage markets, in particular high deposit requirements, mean that only those with parental assistance or big bonuses are able to get a foot on the housing ladder.
"For investors, the increase in demand for PRS property is good news. According to the Investment Property Database, residential returns are favourable compared with other assets. For example, PRS has outperformed commercial property and equities both in terms of volatility and total return, with average returns of 10.5 per cent over the last decade."
