Thirlmere Deacon Property Investment Magazine Issue 6 - July 2021

Issue number 6,July 2021

content CEO Letter

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Alasdair Walker: Marketing Director Amy Marshall: Chief Writer/Editor Nevena Djuranovic: Art Director Isidora Mladenovic: Brand Strategist

Q2 REVIEW Q3 PREVIEW

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Development Updates 36 Market OutLook Q2

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2

Cardinal Rise

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Feature location: Sheffield

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Thirlmere Deacon Guides Explained

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The Value of the Long term Hold

Is a serviced accommodation property strategy good for investors?

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3 QUESTIONS WITH STEVEN AND KAZ

CEO LETTER

Hello Investors, We hope you are all well and enjoying the glimmers of sunshine wherever you are.

Usually, in my quarterly letter, I discuss the market and the ups and downs of the economy and how that affects the property market in both good and bad ways. This quarter, however, I’m going to take the opportunity to shout from the rooftops about the successes and wins we’ve experienced during the incredible 2nd quarter of 2021.

The back end of the Covid lockdowns here in the UK saw a 4

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rush, not only back to the office

the advertised income and coming

for a lot of firms and to the bars

straight back to the market to

and restaurants across the cities

look at the new and exciting

of the UK, but also a rush back to

opportunities we have.

the property market. Seasoned investors and first time buyers

As we draw nearer to the

alike saw the continued strength

completion of several projects,

of the property market over the

projects that are on target and on

last year as a call to action and

budget for the second half of the

came flooding back to the buy-to-

year, we expect the return of

let market.

happy investors to continue. Add that to the new opportunities we

This vigour was matched by the

continue to analyse and vet and

rental demand in cities up and

we’re looking strong going

down the country with those not

forward into the second half of

in a position to buy, (mainly

the year.

young professionals) wanting to upgrade their living quarters to

I’d like to sign off by thanking my

include more sq footage, more

team new and old for their

outside space and facilities etc.

unwavering efforts and for sharing my ethos for a continued high

This proved to be the perfect

level of service.

HAPPY SUMMER GUYS! Stuart Williams

storm for the team at Thirlmere Deacon and both the London and Dubai teams have enjoyed the busiest and most successful quarter in our company’s history. I am pleased to report that not only did the new enquiries turn into new clients quicker than ever but existing clients who had bought off-plan properties with us 6, 12 & 18 months ago are going through completions, receiving 6

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review

preview

by Kazuki Topham 8

O

ver the second quarter of 2021 demand for high quality rental

apartments increased as tenants, Over the second quarter of 2021 demand for high quality rental apartments increased as tenants, realising they would be working from home more often, many permanently, or at least a few days per week began to seek a greater standard of living. Recognising the shift in demand, investors have focused their attention on new build properties.

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Mortgage rates continue to be at

Whilst interest rates have

a record low, and in fact, in many

remained low, capital growth

cases 2 and 5 year fixed rate

across the UK has risen; there has

mortgages decreased over the

been a 6% increase in property

first 6 months of 2021. It’s been

value on average between the 12

widely reported that investors

largest cities in the UK. Data

have taken advantage of the low

released recently in the New

interest rates to remortgage and

Homes Index reveals that new

leverage to expand their portfolio,

home buyer demand across Britain

the LMS Remortgage Index rose

has reached an all-time peak as a

by 9.6 points to stand at 64.4 in

record-breaking total of 153,472

Q1 2021, marking it the highest

buyer searches are recorded

reading since Q2 2015.

during May.

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Whilst the temporary reduction in

time of writing, investors might

Stamp Duty Land Tax has

incorrectly believe they are priced

undoubtedly had an impact on the

out of the property investment

property market, the measure of

market however, there are

the impact has been generalised

opportunities available at below

across the entire market whereas

market value that offer

in reality, at certain price points,

exceptional potential for capital

this tax holiday has had a very

growth.

limited effect meaning these parts of the market are unlikely to be

Looking forward to the months

heavily influenced by its gradual

ahead, as we enter the second

ending. Moreover, when buying

half of the year we expect to see

new build properties it is often

continued strong interest, as

the case that developers cover the

buyers and tenants alike continue

cost of the applicable Stamp Duty

to recognise the benefits of newer

Land Tax.

homes over their older counterparts.

With the national average price of new home property coming to market around £326,660, at the

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MARKET OUTLOOK Q2 16

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April

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Confidence grows in BTL as landlords take out larger loans:

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espite having a rough ride over the last few years in

terms of tax measures imposed on them, it seems that confidence among UK landlords is growing, with the latest data revealing that they’re putting their money where their mouth is.

Read more

March boomed and so will the summer months, says RICS report:

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gents say Chancellor’s decision to extend stamp

duty holiday saw sales, appraisals and buyer enquiries increase last month.

Read more

Big rise in rents outside London as demands outstrips supply:

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ew figures suggest a large average rise in rents over the

past year in almost every region outside of London. The average rent on a newly let home in March stood 4.4 per cent higher across Britain - but if London is excluded, that figure booms to 6.8 per cent annually.

Read more

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House sales and prices see early spring surge:

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ouse sales and property prices recorded an early

spring surge amid government moves to stimulate the housing market. Data from HM Revenue and Customs (HMRC) shows that UK property transactions in March hit the highest monthly level since modern records began in 2005.

Read more

How the average house price in each local authority of the UK has changed since the first reported case of Covid:

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ince the first case of coronavirus was reported

back in 2020, every part of the economy has been impacted. Even house moves were put on hold for the majority of people as home working had begun and the process became even slower. But despite all this, house prices have increased almost 10 per cent across the UK. Read more

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May

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UK mortgage lending hits record amid stamp duty rush:

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ortgage borrowing in the UK has reached its highest

level since modern records began as buyers rushed to beat the nowextended stamp duty holiday deadline.

Read more

Northern house prices predicted to rise twice as much as London’s in the next five years:

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orthern Powerhouse towns could see their house prices

rise by almost 30% over the five years, more than double the growth rate of London. According to a recent forecast from Savills, prices are to rise by an average of 4% across the country in 2021 and by 21.1% before the end of 2025, taking the average cost of a home in the UK to £279,644.

Read more

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Renting still going strong despite govt attempts to talk-up ownership:

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early a quarter (21%) of UK renters plan to stick to

renting with 15% particularly enjoying the freedom to live wherever they want, according to a new survey.

Read more

Value of UK house sales forecast to leap 46% this year as boom continues:

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he total value of homes sold in the UK is expected to

reach £461bn this year, a jump of 46% on 2020, indicating the current housing market boom is likely to continue, according to a new prediction. The property website Zoopla said its projections indicated the property market in 2021 was on course to be the busiest for 14 years.

Read more

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June

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Super-strong rental market will last through summer and beyond:

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he increasingly strong rental market is set to last

throughout summer and beyond according to the latest analysis

by PropTech platform Goodlord.

The new market snapshot shows that voids dropped in seven of the eight regions monitored by Goodlord during May, reducing the average void period in England by a sizeable 15 per cent overall.

Read more

House prices rise £3,000 in one month:

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he property market defied predictions of a slowdown as

house prices increased more than £3,000 in a single month. Annual house price inflation soared to its strongest level in nearly seven years, according to lender Halifax.

The average price hit £261,743 in May, an annual change of 9.5pc and 1.3pc monthly change.

Read more

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Sale price discounts diminish as market strengthens:

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rice discounts are diminishing as the housing market

strengthens, according to data from Knight Frank. The report

How has the UK property market fared in the five years since the EU referendum?

highlights that prices outside London have been more realistic for a longer period of time and are therefore now showing more resilience.

Read more

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epending on which side you listened to, Brexit would

either cast the UK back into the Dark Ages or propel it forward into an era of enlightenment and progress. So polarised was the rhetoric around the EU referendum, it became increasingly difficult to discern fact from fiction. Bolder and bolder claims dominated the headlines, and, in the end, the nation was left divided (almost exactly down the middle).

Read more

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DEVELOPMENT UPDATES 37

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here possible the developers have been

making great progress on the various sites. A lot of preparation work has been done so that when full teams are back they can work at an accelerated pace and within all safety boundaries.

They are working tirelessly to overcome any third party issues and have made excellent progress on many fronts.

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Charles House

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Preston

he site operatives at Charles

Second fix dry lining from the 2nd

House, who have been on-site

floor up has progressed well and

for most of this year, have

is nearly complete, with the team

continued to accelerate the build

of electricians about to commence

across all floors. Scheduled to be

the second stage electrical fix

the first practical completion this

from the top floor down over the

year from our portfolio, the

coming weeks. In our forthcoming

workforce has reached the final

monthly report, we shall ideally

stages of installing the external

be in a position to share a

double-glazed windows across the

finished and fully furnished show

building. Subsequently the

apartment which represents the

scaffolding is then planned be

full extent of what the

removed later this month and we

development has to offer when it

shall be eager to see the final

reaches final practical completion.

product of the scheme really take shape in its final phase of works.

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H5 Halton 5

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Runcorn

n Runcorn, the imposing H5 development awaits imminent

mobilisation. In the past month, the final ground inspections and site surveys commenced and we’re advised by the developer that these are now largely complete ready for site return, as planning works to discharge site conditions are also in the final stages.

Internally the site awaits a full clean down and implementation of COVID working guidelines before operatives return fully.

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Churchside Apartments

Wolverhampton

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urther to the developer’s

were also introduced in June to

latest reports, all works at the

carry out further infrastructure

Churchside development continue

works with the pump installation

to progress well and are on course

in the basement.

for anticipated completion this year. All floors are now closing in

These works are now complete,

across the build, with reported dry

along with firestopping works

lining works now complete

which have enabled the floors to

following last month’s activity.

now be closed in. The project team have had the water and

New double-glazing installs are

drainage design approved.

progressing at pace and the

Furthermore, the new power unit

electrical first fix on the lower

for the building is also approved

floors is now also complete. The

and works have begun to execute

development’s dedicated show

the design.

apartment is in its final install stages and the first completed unit within the building should be finished this month. Plumbers 44

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Linacre House

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Liverpool

t Linacre House we’re

the normal power supply will

pleased to learn that the

potentially shave several weeks

developers have now carried out

off the remaining build time.

their full site survey and audit, ready for a return to site this

In preparation for operatives

month. These surveys, having

returning to site fully, a full stock

been carried out by the appointed

count is now underway, along with

M&E engineer, have deemed the

a full clean down and

existing power system to the

implementation

building suitable for use and no

of COVID working guidelines in

upgrade is required which means

full motion.

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Globe Works

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Bolton

n Bolton, various logistical

of 4 buildings and with much of

preparations, which were

the development still awaiting

reported on last month and which

installation of its new double

had caused delays to a full site

glazing windows, a full clean out

return, have now largely been

and sanitation has been required.

overcome. Enabling site surveys

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have been taking place ready for a

The new workforce appointed to

safe return to site, so the team

Globe Works are currently

can pick up where they left

establishing the new welfare and

off. However, there are slightly

works programme while the final

more extensive COVID guidelines

stages of preparation surveys and

to also be implemented around

inspections are going ahead

such a complex development made

this month.

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Redditch St Stephen’s House

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t Stephen’s House was

preparation, along with a full

already well advanced into its

content check and works

build before the pandemic ceased

programme now in motion. Last

all activity across the site. Much

month we were pleased to share

with our other developments, the

an informative onsite interview

project team have been carrying

with the developer’s Quantity

out welfare works and surveys on

Surveyor Nick Ryall, who talked

the development ready for this

through the building’s latest

month’s full mobilisation. Last

position and plans for the

month we reported that specific

remaining construction period

enabling works to the buildings

this year.

power supply had commenced in 50

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Ringway

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Newcastle

e are still on schedule

enabling has been underway

for the full site team

ready for a full return this

to commence work in June.

month, along with site surveys

The progress of our

including temporary power now

Newcastle site is expected to

installed to the building. This

accelerate very soon.

will support the continued first phase of demolition work and

We are most excited to see

final strip out that is well

that the developer’s project

underway.

team have now introduced full site mobilisation to allow them to progress. During the last few weeks, welfare 52

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Regent Plaza

B

Manchester

lock B, the SFS and Glassroc

blockwork is 95% complete.

weather board continued to

Block C, Steelwork is fully

the external envelope, windows

completed and handed over, floors

and glass floors 9,8,7,5 and both

are 50% complete and concreted

gables are 90% glazed also

to the 7 floors. Intumescent

progressed. Internal walls

painting to the steelwork has

commenced to floors 7,6, and 5.

commenced.

MEP on going to floors 9,8, and 7, and plywood pattresses have

Block D, Pile Mat was civilised

been installed in the walls ready

and CBR tested and Piling

for fixtures and fittings. Roof

undertaken and completed. Pile

drainage is installed and

cap bases have bee marked out

connected, and the central core

ready for excavations to begin.

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Derby Court Completed works: • Ground floor slab completed • Completion of the remaining drainage and attenuation tank installation • Roof has been substantially completed • Intumescent painting to the steel

Liverpool

Planned works: • Brick and blockwork to the perimeter • Complete the roof • Install the CP boards to the SFS • Commence internal metal to the partitions

completed • SFS perimeter framing completed

Current status on site: • Works on the roof are ongoing • Commenced the substructure blockwork • Scaffold is being erected for the bricklayers

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Completion Date: Q4 2021

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Opinion Piece

THE VALUE OF THE LONG TERM HOLD 58

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large majority of millionaires and billionaires across the

world have been elevated to their financial position thanks to their interest in property. Taking the location and the type of real estate out of the picture, at the very heart of many a wealthy person’s success is the purchase of property at the most opportune time. The reality is that they will have assessed the market and secured an asset with a long term view. Long term property holding is how true wealth is created.

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arely will you meet an investor who became an overnight millionaire

by investing in property, rarely does any investment create such wealth so quickly and in most instances, wealth that can be created so rapidly can be lost at a similar rate due to the volatility of the investment.

Property in the UK has long shown itself to be a resilient asset class with a strong track record and a transparent history that allows investors to understand the market more clearly.

Long term view 62

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CEO and Founder of Thirlmere Deacon, Stuart Williams explains further: “If you look at the UK housing market over the last century or so, you’ll see a trend that suggests property values typically double every 10 years or so.

There are always peaks and troughs of course but the general trajectory is a steady and continued increase.

Even when you take into account recent high-profile market crashes, such as 2008 for example, those investors that held on to their assets invariably came out the other side with significant growth. In tough times or market depressions, you only ever lose money if you sell.

Recognising that there are several strategies for property investment, Stuart acknowledges that some shortterm strategies have proved successful; “This is not to say that there are not opportunities to benefit from a shortterm strategy like buying a property, doing work on it and returning it to the

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market or buying a property particularly

Putting a short term strategy to the test

contingency fund you had in place would

wind change the entire profit could be

under market value and turning it

and analysing how it might have fared;

surely have been eroding as we went

wiped out and the venture now becomes

around quickly. However, both these

“You only have to look at the last 12-

into a global pandemic and lockdown.

a burden rather than a profitable one.”

strategies leave your investment and

18 months to reference an unforeseen

return in the lap of the gods as all

change in market activity. For example,

When conducting this type of

that is required is an unforeseen short

if you were to buy a property in 2019

transaction, usually the parameters are

term economic hurdle and your model

with a view to renovating it and selling

quite tight and when they work, they

struggles to come to fruition.”

it in mid-2020 at a profit. Whatever

work well but if there is the slightest

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I

nvestors who have bought and held properties over many years might have

seen the capital value peak and trough when looking month by month but if they were to mark a graph with a dot on day 1 of their purchase and another 10 years later – connecting the two would be a straight upward line.

Buy and hold 68

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“The buy and hold real estate model is a shrewd choice for investors,” Investment consultant Steven Oladipo explains, “This long-term investment strategy can yield impressive results when done correctly, as these properties generate a steady cash flow in the form of passive income. It is an ideal strategy to preserve, create and accumulate net wealth. This strategy allows the investor to take advantage of capital appreciation over a long time period.”

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Bought correctly, buy-to-let property should cover costs and with a management team in place can be totally hands off so an investor can enjoy the regular income. Steven explains further; “for investors on the hunt for a hands-off or ‘armchair’ investment, a management company can supervise the day to day running of the investment.

Another reason this investment strategy works well is the steady cash flow and passive income which these rental properties provide to investors. When an investor holds an investment property and lets it out to long-term tenants, they will collect monthly returns, which serves as a steady income.”

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Investment consultant, Kazuki Topham, agrees and considers how long-term investing opens doors to grow a portfolio; “for clients whose goal it is to build passive income for financial freedom, holding property in the long term is the most productive way to do so. Growth allows your initial seed capital to be reutilised through refinancing and reinvesting. The ability to do this with growth far outweighs a few extra % high net rental yield in the short term and for savvy investors long term growth focus is key.”

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Wherever you’re buying property you should have a focus on the long-term prospects. Owen Moores, Senior Investment Consultant in Dubai explains; “Property investing is a bit like buying a share in a business but in this case, you’re buying the entire company!

You decide on how the business is run, what changes need to be made, who the manager is and how the company is financed. Consider where your share value will be in 10+ years. What kind of return is it providing you now? and what kind of return will it be providing you in 10 years from now?”

Having a short term view has caused many investors and company owners to find themselves significantly out of pocket, with some losses more costly than others, Owen highlights “Ronald Wayne sold his Apple shares for $800 in 1976. Today those same shares are now worth $95 Billion!”

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he age old saying ‘good things come to those who wait’ is often

true of property investment. The numbers do not lie. Investors who hold for 10 years or more have seen their holdings generate significant wealth.

Financial rewards 78

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Oliver Mohsen-Taheri highlights the potential financial rewards available to investors who take a long-term approach; “You can buy a property today worth £100,000 with around £25,000 cash investment. In 10 years that property could be worth over £200,000 assuming growth of around 3% per year.

That means your initial pot of £25,000 has not only made you rental income for 10 years (most likely exceeding your initial £25,000 investment!), it has also made you £100,000 profit if you sold at the 10 year mark. Now imagine if that growth rate was 5% per year…”

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Whilst it’s important to ensure the cash flow is positive in the short term, there are a great many examples of investors who’ve taken a long term approach achieving far higher capital appreciation than those who took a short term view.

Kazuki Topham explores Clapham in South West London as an example; “Those who invested into properties in Clapham 10 years ago could have instead focused on a higher yielding property such as student accommodation in a regional city and achieved a few thousand pounds extra cash flow per annum. However, the properties in Clapham have grown exponentially in the past decade with properties valued then at around £300,000 are now being valued at £500,000 and in some cases even more. By focusing on the long term growth rather than short term returns, these investors have made hundreds of thousands of pounds more overall.”

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ortfolio Manager Nichola Harrison concludes, “The true winners in

property are those that enter with a long term vision, supported by a long term plan. Investments that bring short term gain are often inherently risky.

The safest, soundest investment is by far property. Be patient, wait for the rewards because whilst they may not be immediate, they’re measurable, they’re sustainable and they’re tangible!”

Stuart adds, “With a long-term view in mind from the outset, any temporary blips in the market will almost certainly even themselves out and put your portfolio on the overriding trajectory that the UK is world famous for – Steady, strong and secure growth.”

Vision for success 84

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Feature location

SHEFFIELD

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Why Sheffield?

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f you’re looking for the next UK

over the past year have all been regions

investment hotspot you should have

further North.

Sheffield at the very top of your list.

Property prices across this part of the With working from home set to

country are rising and are predicted to

continue to be the norm for many long

continue to rise by over a fifth in the

into the future, locations not just outside

next 5 years.

of London but further away than might usually be considered are spiking buyer

Here’s why, out of the many hubs in the

interest. The locations which have seen

North of England, our sights are set on

the largest growth in buyer demand

Sheffield.

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Growing economy

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heffield is the fourth largest city

Before the pandemic, Sheffield was on

in England, its economy continues

a strong growth trajectory, with a net

to impress taking huge strides forward

gain of 15,000 new private jobs recorded

and has become a hive for innovation.

in 2019 and whilst the economy’s

International companies such as Boeing,

growth has been affected by the

Rolls-Royce, McLaren Automotive

pandemic the city is picking up where

and Toshiba have set up operations in

it left off. Recognising the need to

the area. The city also has a thriving

support this growth the local authority

tech sector and startup scene with big

implemented a 2020 Strategic Economic

businesses such as B.Braun Medical

Plan which aims to boost the local

and PlusNet calling Sheffield home.

economy by £4billion, creating 70,000

Since 2011 it is reported that average

new private-sector jobs and adding

wages in Sheffield have grown by over

thousands of new businesses to the

13% and are set to continue as new

area. This strategic plan is set to drive

businesses are attracted to the area for

up wages and overall wealth in the area

its connectivity and more affordable

which naturally has a positive impact on

office and warehouse costs.

property prices and rental values.

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Rising population

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ver recent years Sheffield

shift in demographic.

has seen its population rise

significantly and in particular, there

Sheffield’s population is predicted to

has been a notable rise in the number

rise by as much as 15% by 2035, to be

of 20-24 year olds choosing to live in

able to meet the increasing demand for

Sheffield. This age group typically tends

housing in Sheffield, nearly 40,000 new

to be tenants meaning the demand for

homes are needed to be built by 2038.

rental property has increased with the

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Thriving Universities

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heffield is widely known as a top

with such a large student population,

university city and boasts several

around 1 in 10 residents in the city is a

first-class institutions such as the

student, but furthermore, around 25%

University of Sheffield and Sheffield

of students choose to stay in Sheffield

Hallam. Around 63,000 students attend

beyond their studies is on the rise which

university in Sheffield each year and

is having a knock on effect on the

many thousands of staff are employed

demand for property overall.

by the universities. There is naturally a demand for student accommodation 94

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Central Location

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hilst it technically falls in the North

Doncaster Sheffield Airport is one of the

East region, just within South

fastest growing airports in the UK.

Yorkshire, Sheffield is centrally positioned.

Whilst Sheffield is a busy and successful Positioned near the M1 motorway, travel

economic centre in its own right, its

to and from Sheffield by car is convenient,

connectivity to other northern cities is

the city also has good train links with other

excellent, as well as connections further

business hubs.

afield.

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DESTINATION

DISTANCE IN MILES

TRAIN TIME

Manchester

37 miles

50 minutes

Leeds

35 miles

40 minutes

Birmingham

86 miles

1 hr 15 minutes

London

168 miles

2 hrs

High Speed Rail 2 (HS2) is expected to connect with Sheffield, when it arrives it will significantly improve transport connections and rail journeys to London will be cut to as little as 85 minutes.

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Your next investment?

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ne of the most appealing features

With strong yields and low property

of Sheffield to would-be investors

prices, price growth predictions of over

is the incredibly low entry price points

20% in the next 5 years and the econ-

at which they can secure a buy-to-let

omy and population figures set on an

property. Buying well below the UK’s

upward trajectory, Sheffield should be

market average in a rising market with

being seriously considered by an inves-

strong foundations for long-term growth

tor currently active in the UK property

is the exact opportunity that successful

market.

investors continually seek to find.

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Vista Sheffield

Sheffield’s latest addition to the PBSA market

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nvestors now have the opportunity to purchase a property within an

impressive, high-end purpose-built student accommodation in Sheffield city centre, in the heart of Sheffield Hallam University campus.

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Part of an impressive broader

self-contained accommodation

£220million regeneration project the

seeking security and comfort whilst

development aims to offer facilities that

studying abroad. The UK government

enable a new way of learning, working

has predicted that the number of

and researching in Sheffield.

international students attending universities in the UK will increase by

With over 60,000 students in the

around 20% over the next 5 years.

city, there is a strong demand for accommodation. Notably, in Sheffield

Not only is the development ideally

there is a lack of modern purpose-built

located for Sheffield Hallam University

accommodation, there are currently no

but the University of Sheffield, which is

luxury options for students.

a member of the elite Russell Group and is ranked 13th in the UK out of around

The demand for luxury student

150 higher education establishments in

accommodation has grown in recent

the country, is within walking distance,

years as the number of international

or a short bus trip away.

students choosing to study in the UK has increased – they now make up almost 20% of the total number of students.

International students are known to have a preference for high-quality

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INVESTMENT HIGHLIGHTS

• From £75,000 • City centre location next to Sheffield Hallam University • 7.5% NET rental assurance for 5 years • 24-hour security and reception • Impressive onsite facilities including a fully equipped gym, coffee shop, dedicated group studying areas and quiet areas

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Sheffield Central Apartments

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heffield must stand as one of

The development is just under a mile

the most promising property

North West of the City Centre within the

investment markets in the UK today.

Philadelphia District, an area offering a

That’s why we have just launched

range of amenities, historical sites and

our new Sheffield City Apartments,

attractions. The eastern edge of the Peak

offering a purpose-designed residential

District National Park is only 12 minutes

development suited for young

away by car and a 4.3 mile drive takes you

professionals and small families.

to beautiful countryside.

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Scheduled for completion in Q2 2023, the Sheffield City apartments will comprise of 5 studio apartments, 48 single-bedroomed apartments and eight two-bedroom apartments built over five stories, all under an elegant roof-top terrace. The apartments will be styled by professional interior designers to create a modern and comfortable setting, while also being well equipped for contemporary living.

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INVESTMENT HIGHLIGHTS

• Prices from £170,000 • Optional 8% rental assurance for 10 years • Projected 30% capital growth over the next 5 years • Completion date Q3 2023 • Experienced developer with over 18 years of development experience • Projected rental increase to be in excess of 17% on today’s rates by 2025

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Strategy

SERVICED ACCOMODATION

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Is a serviced accommodation property strategy good for investors?

P

roperty investment success is not just limited to the traditional buy-

to-let structure and when considering alternative options some might wonder if a serviced accommodation property strategy is good for investors?

The serviced accommodation property strategy is a relatively new one and might appeal to investors as it can deliver excellent rental returns.

If you’ve bought or are in the process of buying a property in a prime location that would work well for serviced accommodation it might be a strategy you want to explore.

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S

erviced accommodation is the term

more akin to that of a hotel.

used for a fully furnished self-

This type of accommodation has

contained property which is available

primarily been popular with business

to let for both short and long term

travellers and corporate relocations and

and might provide services similar to

is often simply added to the ‘apartment’

those offered by hotels such as regular

category on hotel type accommodation

cleaning and access to the building’s

booking website portals, in reality,

facilities if there are any such as the

serviced accommodation is much more

swimming pool, gym or spa.

than simply an apartment.

Serviced apartments can often be found

Serviced apartments are increasingly

within residential buildings and may

viewed as a credible and cost effective

or may not have staff on-site so the

alternative to hotels. They’re perfect

operator will arrange to meet guests at

for longer stays and for when it’s more

arrival, have a safety deposit box or in

appropriate to have all the facilities

some instances, they might offer keyless

you’d have at home and live more like a

entry.

local.

Serviced accommodation should not

Serviced accommodation falls under the

be confused with ‘short term lets’

same classification as furnished holiday

which can be set up using several

lets (FHL) meaning it is subject to the

types of legal agreements such as an

same planning rules and taxation. There

Assured Shorthold Tenancy agreement.

are benefits to furnished holiday lets as

When letting a property as serviced

we highlighted in our blog: Is a holiday

accommodation the arrangement is

let better than a buy-to-let?

What is serviced accommodation?

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If you’re comparing serviced

SERVICED ACCOMMODATION VS BUY-TO-LET accommodation vs traditional buy-to-let there are a few key differences of note.

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Length of let

W

ith a serviced apartment the ‘let’ could be as short as one night,

it could also be as long as 6 months in some cases where a contractor needs to be close to a place of work for an extended period.

The beauty of renting a property as a furnished apartment is flexibility.

A traditional buy-to-let property on an assured shorthold tenancy (AST) has to have a minimum term of 6 months making it a very rigid agreement.

What’s included

S

erviced accommodation is a preferred cheaper alternative to a

hotel and is usually compared to a hotel rather than a long term rental property.

This is because a serviced apartment will be fully equipped with everything down to the pots, pans and cutlery and there will be regular cleaning included – not things that have to be thought about with a standard buy-to-let property.

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Rental value

O

ne of the greatest appeals of letting your property as a serviced

apartment is the possible high rental income.

For example, on a standard long-term let you might receive a monthly rent of £500 for your property, comparably as serviced accommodation that same property would rent for £80 per night.

And it would likely still be cheaper than the hotel down the road that probably costs around £120 per night.

Whilst void periods are one of the concerns with serviced accommodation, to reach the same rental income as the monthly figure of £500 with a nightly charge of £80… you would only need to let the property for 6 nights in a month.

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Are serviced apartments a good investment?

T

he serviced apartment sector has grown considerably over recent

years and has been outpacing hotel room investment.

According to a report by global real estate agent Savills which focused on the European Serviced Apartment Market, serviced accommodation has fared better than hotels throughout the pandemic in terms of occupancy levels.

Whilst serviced apartments were not entirely immune to the demand drop caused by Covid-19 the sector is set to recover the quickest and see a 41% rise in serviced apartment RevPAR (revenue per available room) over the course of the year.

Overall the lower operating costs combined with longer average guest stays support the case for serviced apartments as a good investment.

Read more about investing in serviced apartments

T

o learn more about how to set up a serviced apartment, what’s needed

to convert your existing traditional buyto-let property head over to our website to read the full article.

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TD GUIDES EXPLAINED D

id you know about the various professional guides we’ve put

together to help investors with specific areas of UK property investment?

From guides for expats to those focusing on the latest UK hotspot areas, we cover several subjects sharing insights and knowledge from experience – you can find them on our website, free to download.

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UK Property Investment Hotspots 2021

T

his updated guide for 2021 includes the investment locations

we recommend investors consider and the reasons why.

Knowing where to invest and when is often the key to successful investment, whether you’re just getting started and looking for your first asset or are diversifying your portfolio.

UK Staycation Guide – Investing in Holiday Homes

I

t has never been so popular to take a staycation here in the UK, the demand

for holiday homes is through the roof.

With this increased popularity in holidays in the UK looks set to remain in place for many years to come we explore the possibility of investing in holiday homes.

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Expat Guide to Investing in the UK

E

xpats investing in UK property often have unique questions from

their position, in this guide we answer the most frequently asked questions posed to us by expat investors seeking UK property.

We also highlight why expat investors should be focusing their attention on the UK over other locations.

Investing in your family’s future

O

ur latest guide focuses on investing for the benefit of your

family, whether that is by setting up a trust to hold investment properties for your children to improve their financial footing in the future or whether you are hoping to invest in property to increase regular income.

Learn more about the best way to build a nest egg for your family in our dedicated guide.

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Meet the team 134

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Where should investors be looking to invest in the UK?

When should investors be looking to invest in property?

There are massive opportunities in

Now is a great time to buy. There’s

the North West currently. We have a

much scope for growth. If you’re looking

saying in the office that North West

for a long-term approach to property

is the worst kept secret in property

investing, which is something that I

investment. This is based on the fact

would advocate for, this is a great time

that there is still massive regeneration

to get in because of the regeneration

going across towns and cities in this

going on in the Northern areas where

area. Through these schemes and

you can find great scope for capital

funding, what we’re finding is these

growth, strong potential for rental

areas are going through extensive

growth, and to build generational wealth

regeneration, therefore leading to

over a long period.

strong capital growth, good rental yields that are on the rise that are going to help a client earn and meet their goals.

Why should investors work with Thirlmere Deacon?

At Thirlmere Deacon, we have a consultative approach to property investing. Through our fact finding process, we establish our client’s needs, goals and aspirations so that we can strive to meet them. We do this by creating an investor profile and then create an investment strategy that will

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help the client meet their end goal.

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What is the best strategy for investing in property?

Clients often ask what the best strategy is. And it’s a little bit of a cliche answer, but the best strategy does depend on each individual. Before we recommend any strategy, we look into their criteria and preferences, their current portfolio as well as the full service that we provide and the network of industry specific professionals that we make available to our clients. So not just finding the properties that fit individual strategies, but also the after-

What makes Thirlmere Deacon different from other investment companies?

I would say what makes Thirlmere Deacon different is, firstly, the tailored approach that we provide to our clients, making sure that any strategy we recommend is based on the client’s circumstances and also, just the entire service we provide. So not just finding the property that fits that strategy, but also the after-sales process, the exchange process, and then looking into portfolio reviews quarterly.

sales, conveyancing, tax consultations, exchange and completion processes and then on to quarterly portfolio reviews..

What advice would you give to first-time investors?

What I’d say is that there’s a lot of different strategies online, and a lot of them turn out to be very simple on paper, however, when you look into it and do your research, it isn’t always simple. Consider any advice given and do your own due diligence as well,

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before you make any major decision.

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Sheffield Central Apartments

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Thirlmere Deacon London info@thirlmeredeacon.com + 44 (0) 2039507939 Lansdowne House, Berkeley Square, Mayfair, London, W1J 6ER

Thirlmere Deacon Dubai dubai@thirlmeredeacon.com +971 (0) 4 818 7277 Floor 30, Oberoi Business Centre, Business Bay, Dubai, United Arab Emirates