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Channel 4 has announced the shortlist for their national headquarters and Birmingham leads the way alongside Greater Manchester and Leeds.
In the largest structural change for the broadcaster in its 35-year history, Channel 4 is looking to move 300 staff out of London.
Coventry, Stoke-on-Trent and Nottingham have failed to be selected while Birmingham, Manchester and Leeds are still in the running to be the national HQ or one of two ‘creative hubs’. Bristol, Cardiff and Glasgow are also in the running to be a creative hub.
The broadcaster is currently based in Westminster, staffed by around 800 workers in total. The move would include 300 staff as part of a deal to avoid leaving the capital altogether.
Birmingham is currently the favourite to win the bid with Andy Street, mayor of the West Midlands, describing the city as having ‘unrivalled connectivity and a diverse, young population”.
The shortlist was chosen based on set criteria, with each candidate requiring a population of more than 200,000 people, a travel time to London of less than three hours and a high-quality physical and digital infrastructure. Channel 4 execs travelled to 13 different cities before creating the shortlist which didn’t include cities such as Newcastle and Sheffield. Bristol, Cardiff and Glasgow were separated from the main shortlist and are being discussed as potential homes for the smaller, ‘creative hubs’.
Jonathan Allan, Channel 4’s chief commercial officer, said “We have again had to take some very difficult decisions on which cities to take forward to the next stage, but we believe the six cities we have selected are best able to deliver against our vision and requirements for the new national HQ and creative hubs.”
The winner of the bid for both the Channel 4 headquarters and both creative hubs will be announced in Autumn. The creative hubs will focus on the commissioning of new programmes, with executives for the channel announcing their commitment to increase the amount of money spent on new programming outside of London by £250 million.
Here at SevenCapital we love all things Birmingham. With one of the largest populations outside of the capital, Birmingham has developed itself as the ‘second city’, utilising its central positions in the country to build thriving professionals, retail and leisure sectors.
With increased affordability and huge levels of inward investment, Birmingham has quickly caught the eye of developers. But is Birmingham a good place to invest in property?
The Midlands Engine
Birmingham is booming. As cranes fill the skyline, the UK’s second city is establishing itself as one of the most popular locations in Europe to invest in – even more so than London. Thanks to its economic and strategic importance within the UK, Birmingham is attracting billions of pounds worth of investment in citywide retail, commercial and residential space as well as infrastructure projects.
As the Midlands Engine begins to take shape, Birmingham sits firmly at its heart. The government initiative is aiming to stimulate economic growth in the Midlands, creating 300,000 jobs and £34 billion worth of growth over 15 years.
The plan is to achieve this by focusing on five key themes – skills, innovation, transport infrastructure, business finance and promoting initiative.
As you’d expect. with the creation of 300,000 new jobs the need for accommodation will explode, increasing rental demand and stimulate capital growth. Initially, the government will kickstart this scheme with a £5 million investment package, designed specifically to boost exports.
Birmingham Property Market
Residential trends in Birmingham show a story of a city outperforming the market. With the annual growth rate for property prices sitting between 5% and 10% since 2015, Birmingham has seen an overall 43% increase of property prices since 2009.
Despite this growth, Birmingham still remains a much more affordable location compared to other markets in the UK. As the second city, Birmingham is often compared to London and it’s this comparison that showcases the biggest gap. New build property in the capital can often range between £1,000 and £2,000 per sq ft, whereas similar property in Birmingham would be between £350 and £450 per sq ft.
It’s this residential affordability and inward investment that creates the perfect storm for tenant demand. Birmingham has been the most popular destination for professionals and families leaving the capital for the last three years, attracting young workers who are looking for an affordable alternative to London.
Looking to the future, Birmingham is predicted a cumulative price growth of 14% from 2018 to the end of 2020, steadily rising each year.
Age of Birmingham’s Population
Birmingham has the youngest population of any major city in Europe with under 25s making up 40% of the population. Add to that the fact one-third of the city’s inhabitants are of an ethnic minority and you have one of the most diverse cities in the UK.
The second city also boasts a strong graduate pool from several excellent universities. These young professionals are increasingly looking to stay in the city thanks to better job prospects and increased affordability.
Generally, this means a dual demand of existing residents looking for new space while younger buyers or renters move out of their parental homes. Experts estimate that around 80,000 new homes will be needed to meet residential demand over the next decade.
Vibrant Birmingham Lifestyle
Any great city should aim to be unique. From the public spaces and amenities to the overall character of its design, lifestyle is an important factor to consider. In recent years, Birmingham has made significant progress in becoming a truly great city. Boasting a vibrant, youthful cityscape, Birmingham mixes the contemporary and the historic, providing a smart lifestyle without compromising what makes it unique.
Culturally, Birmingham has a lot to offer. It’s home to Europe’s largest school of jewellery with the Jewellery Quarter and the UK’s second oldest independent art gallery, the Royal Birmingham Society of Artists.
Increased inwards investment has also revitalised the Birmingham dining experience and nightlife offerings, providing an influx of restaurants and bars to suit all needs. With more Michelin starred restaurants than any other UK city (barring London), Birmingham is also providing alternative ‘everyday’ solutions. Attracting names such as The Alchemist and The Botanist on top of Be at One, The Ivy, Gusto and Gaucho, the second city is cultivating an exciting urban landscape.
A ripple effect is spreading throughout the Birmingham commercial sector, bringing with it new commercial opportunities and investment. The ‘Big City Plan’ is well and truly in full swing, increasing the size of the city core by 25% and forecasting nearly 50,000 new vacancies as projects are completed.
The number of active businesses in Birmingham has also steadily rose, hitting 13.5% since 2016. This rate of growth is immense, three times the UK average, making Birmingham nearly unrecognisable from 10 years ago.
For the last five years, Birmingham has also topped the list for the highest number of new startups outside of London. With over 12,000 businesses set up in Birmingham last year, the second city had almost 4,000 more than Manchester in third place.
With the UK’s largest business, professional and financial services hub outside of London, a number of financial technology firms such as Falanx and Oxygen Finance are looking to take advantage of this huge potential market.
As a whole, the commercial development pipeline shows that both public and private investment is aiming to create schemes and spaces designed to meet the changing requirements of both businesses and residents.
So is Birmingham a Good Place to Invest in Property?
As you may have gathered, Birmingham has developed itself as an attractive location for workers and businesses. Huge inwards investment alongside affordable living conditions has seen interests soar amongst tenants, developers and investors alike.
This is only set to continue as HS2 becomes more of a reality. By 2026, Birmingham will have unrivalled access to London. This not makes commutes easier but opens up opportunities for London workers to live in Birmingham, taking advantage of cheaper living costs. When combined with a population that is already forecast to hit unprecedented heights, Birmingham begins to show itself as a true property investment hotspot.
On Thursday, we were happy to host some of our top clients at a private and exclusive wine tasting at Berry Bros. & Rudd in London.
Berry Bros. & Rudd is Britain’s oldest wine and spirit merchant, having traded from the same shop since 1698. They have over 4,000 wines for sale which are carefully selected by their five Masters of Wine to ensure they offer style, quality, individuality and value. They also hold two Royal Warrants for H.M. The Queen and H.R.H. The Prince of Wales.
Our guests were welcomed into the Green Room in the Pickering Place Townhouse at Berry Bros. & Rudd for a Grand Cru Champagne and canapé reception before taking part in a Tutored Wine Tasting with a Wine Advisor, tasting six wines under the theme of “France versus the New World” such as a 2014 Riesling from Austria and a 2015 Chianti from Tuscany.
The tasting was a fantastic opportunity to thank our existing clients for their continued support and involvement in the SevenCapital journey.
Over the centuries, an ambitious city in the West Midlands has fuelled the furnace of British might and ingenuity. A home to pioneers whose steam engines sparked the industrial revolution, craftsmen whose jewellery adorned the necks of the aristocracy, blacksmiths whose weaponry laced Queen Victoria’s formidable armies and where titans of all industries earned their fame and fortune. Previous generations called it the “Workshop of the World” – today it’s simply known as Birmingham.
In the modern era, tales of prosperity continues to make headlines. According to the studies by The Department for International Trade (DIT), the West Midlands is the UK’s only region to have witnessed growth in both the number of foreign investment projects (13%) and Foreign Direct Investment (FDI) employment for 2017. The study outlines that Birmingham has established itself as number one for foreign direct investment outside of the capital, securing a total of 171 FDI projects last year with the number of associated jobs hitting 9,424. This is the largest number of jobs created in any area outside of London.
With the West Midland’s manufacturing, automotive, banking and digital technology sectors continuing their international appeal, such investment has also influenced the local property market.
“Investors understand the magnitude of what foreign investment will do to future property values in the area,” says Johnny Conran, Director at SevenCapital.
“As the employment sector continues to flourish and thousands of young professionals migrate towards Birmingham, residential developments in the city centre are now in high demand and will experience substantial capital growth over the coming years.”
Catering to a market with an undersupply of residential accommodation, SevenCapital will soon begin construction on their highly anticipated development, St Martin’s Place, located just minutes from the banking and professional districts.
St Martin’s Place is within walking distance of HSBC, offering 1 and 2 bedroom apartments.
When brands such as HSBC, Deutsche Bank and HMRC moving their headquarters and thousands of staff from London to Birmingham, it’s a testament to the city’s international standing as the place to do business in the UK. This is a particularly strong example of faith in the Birmingham market by global corporations.
Property is always a popular investment vehicle, providing a tangible asset and the potential for two separate income streams.
Ask any investor and they’ll tell you that one of the most important things to consider, if not the most important thing, is a strategy. You need to have a clear plan of where you’re going and what you’re looking to achieve.
At its most fundamental level, there are only two investment strategies. You buy a property and rent it out or you buy a property and sell it on for profit. That’s it. The thing is, if you scratch just below the surface, it gets a lot more complex. If you want to start seeing serious success, you need to look deeper.
It’s difficult to quantify the perfect investment strategy for you. Everyone is different and everyone will invariably have different measures of success. What we can do is give you some inspiration, tell you some common strategies and how you can adapt them to fit your short-term, mid-term and long-term goals.
Most likely you’ll be aiming for two different outcomes, a monthly rental income and an increase in the value of the property over time in case you’re looking to sell up. While there are a few different ways you can go about a Buy-to-Let investment, they all follow this basic model.
This is the most common form of the Buy-to-Let model and involves several, fairly simple (in theory) steps. First, find the perfect location. Second, find the ideal tenant. Third, do the maths and ensure that everything adds up. Fourth, keep the tenant happy and ensure a consistent stream of rental income. In terms of tenants, you’ll commonly be looking at families and working professionals.
While this is a huge oversimplification of becoming a landlord, the basics are simple and represent one of the easiest ways to get into the property investment market. There’s a lot to be said for the classics and many landlords earn excellent returns by having a portfolio of Buy-to-Let properties.
Tips: Location is the vital indicator of success. By finding a great location, you improve the chances of finding a happy, motivated tenant, you can ensure a great rental income and if the area is up-and-coming, positive capital growth is never far behind.
Easy to understand
Minimal management time (especially if you consider a letting agent)
Lower returns than other Buy-to-Let opportunities
The basic definition of an HMO/House Share is a property where each room is rented out on an individual basis. As you’d imagine, HMO’s are popular as they allow for higher rental income. A bigger property can have rooms converted into bedrooms, creating the potential for more tenants and thus more money.
Unfortunately, a by-product of more tenants is more time spent managing the property. There’s also the potential for more wear and tear. The more tenants, the higher the chance the property may need maintenance down the line.
That said, the higher rental yields mean this type of buy-to-let has grown in popularity over the last few years, especially in the capital and larger regional cities.
Tips: Most HMO’s are let furnished and usually have bills included to avoid any confusion. Consider this if you’re looking at this investment strategy.
Higher potential rental income
Diversified rental streams – if one tenant leaves, you still have others to avoid void periods
Increased chance of necessary maintenance
Harder to find a mortgage
Tighter regulations than Single Let
Although targeting student tenants could technically come under the HMO strategy, it’s a vastly different market and warrants individual consideration. Many investors choose to opt for a strategy built around students as they represent a predictable and consistent stream of rental income.
Management is generally easier as landlords know that each tenant will be signing up for a certain period of time and they’ll always be a stream of new students to take their place. If you buy into popular stereotypes than the idea of housing several students may turn you away but the potential for income is considerable.
Tips: With the increase in purpose-built student accommodation being built, it can be difficult to market a more traditional student property so location is important (particularly as many student accommodation buildings are in prime city-centre spots). Focus on areas that offer amenities or facilities that suit students.
Increase rental income
Predictable cycle of tenants
Consistent stream of tenants looking for accommodation
Potential for more wear and tear
Challenging market with purpose-built accommodation
Buy-to-Sell Investment Strategy
Buying a property to sell is completely different to buy-to-let, aimed more at short-term or mid-term strategies. There’s no worrying about rental income or tenants, you’re just simply looking to sell for as much profit as possible.
The main attraction of buy-to-sell is the amount of money that can be made quickly. You can buy and sell in a matter of months rather than the long-term timeframe that comes with a buy-to-let strategy.
This is also the downside. This type of investment only makes money when you’re working. There’s no passive income, just the money you make on the sale.
The most important things to keep in mind when looking at buy-to-sell is location and budget. You need to ensure that you buy at the right price and keep any refurbishments or maintenance within your budget. Secondly, you need to market your property quickly and effectively. Having a good location for this process is ideal and will help the sale immeasurably.
Choosing buy-to-sell for your investment strategy depends entirely upon your goals. If you’re looking for something short-term and want to generate a lump, it’s perfect. If you’re in for the long-haul, want to build a portfolio or you’re looking for passive income, it’s not for you.
Quick process that’s well suited to short-term goals
No tenants or maintenance to deal with
Less dependant on the long-term health of the property market
No passive income – You make money when you work
Complex management and hands-on work
Can result in a loss if done incorrectly
Buying Off-Plan Property
This strategy is not strictly Buy-to-Let or Buy-to-Sell (both are viable), it’s simply a different method of initial purchase. Off-Plan Properties are new-build developments that are not ready for tenants, instead bought by investors before completion.
By buying off-plan properties you can often find excellent individual discounts. Additionally, off-plan properties are often seen as good investments because of the capital growth they can experience between planning and completion.
As an investor, you would buy a property unfinished, wait for completion, research the market and decide whether to rent or sell. This offers flexibility in strategy, although it requires a lot of management and due diligence.
As always, growth isn’t guaranteed. Investing in off-plan property is entirely dependent on the market, particularly if you’re hoping for capital growth during the build period. Be sure to research the area and the market conditions before diving in.
Discount on initial purchase
Potential for capital growth during the build period
Flexibility in strategy
Advanced strategy that requires management and due diligence
Cash often necessary for deposit
Whatever strategy you choose, it’s vital to ensure that you do your research, ask advice wherever necessary and keep on top of your goals. If you have a solid investment plan, you’re better equipped to make sound decisions and have a better chance of finding success.
Combine this with the increasing rarity of final salary pensions, as well as many people reaching the ceiling on their potential pension investment and you can begin to understand the need to plan ahead.
This is where property investment comes to the forefront. As a tangible asset (unlike pensions), property sits at the core of a potentially lucrative retirement investment strategy. It’s quickly becoming the norm for retirees to develop a buy-to-let portfolio in their later years.
Although there are supporters on both sides of the property versus pensions debate, the evidence is clear. Property investment is an avenue to be considered.
So Why Choose Retirement Property Over Pensions?
There can be a number of reasons for choosing a property over pensions, most of which relate to the decline in value of pensions, rising living costs and the potential to earn both passive income and capital gains upon selling.
Rising living costs are a big concern for many that are already planning for the future, with research performed by the Centre of Economics and Business Research (Cebr) in 2015 showing a worrying trend. The report detailed how everyday living costs were expected to skyrocket by 2050, rising from £1,084 to £2,930 which equates to around 150%.
Another reason for opting into a property is the increasing scarcity of final salary pensions. Hailed as the ‘gold-standard’ of pension options, a final salary pension is saved into each year of your working life and in return, you receive a guaranteed income following your retirement date. Unfortunately, these deals are becoming as valuable as, well… gold dust.
Brexit was a huge blow to employer’s willingness to provide a long-term expense of a final salary pension. The financial community as a whole was rocked by the vote, causing most final salary pension funds keen to provide short-term lump-sum incentives rather than take the long-term costs.
These ‘final salary transfers’ mean forfeiting any future payments but as a trade, a substantial, immediate lump sum is provided in its place.
Obviously, this doesn’t provide the constant stream of income that can be found with property and often, returns aren’t as substantial. By investing in a property, you buy into the potential for both rental yield returns and capital growth upon sale, two income streams that can provide an excellent means to build wealth for retirement.
Landlords have voiced their disapproval this week at government plans to implement minimum three-year contracts for tenants.
The longer tenancy agreements would stop landlords forcing tenants out at short notice, although tenants would still be able to give notice themselves.
With around 80% of tenancy agreements in England currently set at six or 12 months, this jump to 36 months would be a huge change for the industry.
The main foundation of the Buy-to-Let industry, the assured shorthold tenancy, currently leaves tenants at risk of eviction at short notice according to the Housing, Communities and Local Government secretary, James Brokenshire.
“It is deeply unfair when renters are forced to uproot their lives or find new schools for their children at short notice due to the terms of their rental contract.
“Being able to call your rental property your home is vital to putting down roots and building stronger communities. That’s why I am determined to act, bringing in longer tenancies which will bring benefits to tenants and landlords alike.”
Essentially, this longer-term agreement would provide tenants with more protection, allowing them to leave of their own free-will but providing better guarantees if they wanted to stay in a property for a longer period of time.
The proposed plans would have a huge effect on the Buy-to-Let market, which found traction on the back of the assured shorthold tenancy. While longer tenancy times could be good for combatting voids for landlords, it may also make lenders more conservative when granting loans, especially if they know they cannot repossess the property at short notice. Another side-effect could be the increase in interest rates to mitigate the additional risks.
According to Polly Neate, chief executive of housing charity Shelter, losing a tenancy is one of the main causes of homelessness. She believes that ‘everyone who rents will be very pleased to see a move towards longer tenancies’.
This proposal represents another step by the Government to improve the Private Rented Sector, which currently makes up around 25% of the wider UK market and is growing at an unprecedented rate as more people begin to choose to rent over home ownership.
The three-year model will be part of a consultation that looks at how other countries have adopted longer minimum terms and will provide ideas on implementation.
It’s no surprise that ‘investing for the future’ and ‘making money’ are the number one and number two reasons respectively for investing in any area, and according to independent research by CensusWide the top five things people want to invest in are:
There is a clear divide between the number one actual and investment, with ISA’s being pipped to the top 5 at 13.6%. This preference for property, land and gold investments represents a strong need for tangible, real-world and potentially less volatile investments for future planners and those seeking to make the most of their own retirement.
Yields and Capital Growth must be considerations wherever you’re investing – especially in property – whilst short-term so-called “flippers” are increasingly finding it difficult to find the right flip, those with time to allow property values to grow over mid-term periods can reap the benefits of both annual yields and long-term capital growth.
For example – investing £50k into a property, off plan or otherwise – with a mortgage on the remaining amount could allow the investor to not only expand their capital through market growth but also create long-term passive income post mortgage term. Factor in small yields through rental income and there’s a clear pathway to generating a comfortable retirement, nest egg or even inheritance.
Repeatable, scalable and importantly accessible to the majority – whilst all investments carry their own risks, property consistently delivers growth over the mid-term and long-term according to the Office for National Statistics (ONS), showing a whopping 50% growth in prices from 2005 – present.
Capital growth as above may be the primary goal for some investors, especially those in the South East whose appetite for making money through property investment topped our responses with 37% citing it as the primary reason for investing in property. Yields, however, whilst not as headline-grabbing as 50% capital growth, can’t be overlooked. A 6-7% yield practically applied, can either provide shorter-term passive income whilst protecting capital in bricks and mortar for interest-only mortgages or help savvy investors to repay any LTV for Capital and Repayment mortgages. Ultimately balancing the benefits of time and capital available with financial goals.
Protecting your own future
So where does this leave you and your family? Are you sipping coffee admiring the lawn on Monday morning or trying to make the most of state pensions? Are you one of the 60% of UK people that have started to invest for their future or part of the 40% that haven’t?
Everyone starts somewhere. Every investor seeking to build wealth for retirement, family security, inheritance or to achieve financial freedom – whatever your reasons, having a clear plan and trusted partners is key. If you’re one of the 40% of investors looking to make the most from property investment we’ve shared several of our best below – mixing off-plan new builds for maximum Capital Growth with ready-to-let opportunities for short-term rental yields. We’ll see you on the lawn.
The trend in investments surprisingly reflects a relative lack of preparation amongst the over-55’s, with 40% citing no investments – although 36% are using their ISA’s and 18.4% are investing in property. The top reasons for investing in property were cited as ‘investing in the future’ at number one and ‘making money’ coming as a close second.
Similarly whilst 60% of 25-34 and 35-44 year olds are investing, 39% and 40% respectively are not investing for their own future – although they’re 20% more likely to be planning than the next generation. Missing this crucial time to maximise returns, capital growth and the power of compound interest, not to mention market rises, could be the difference between a comfortable retirement at 55 and a struggle at 68+.
Topping the charts for lack of investments are those between 45-55, with 50.9% of our responders citing zero current investments. Depending on which end of the spectrum you’re lucky enough to have been born in is critical. According to Which Magazine:
“The common perception is that you’ll need between half and two-thirds of the final salary you had when you were working, after tax, to maintain your lifestyle once you retire”.
It’s a pretty simple calculation then, if at 45 you’re accustomed to an annual household income of 100k and plan to spend 30 years in retirement, you’ll need:
100k x 2/3 x 30 = £1,980,000 (£5,500pcm)
Or for the less lavish of us…
60k x 2/3 x 30 = £1,188,000 (£3,300pcm)
Whether its Champagne and caviar or prosecco and olives, with more and more of us opting to retire early and living longer into retirement, getting the timing right on when and where you invest will be crucial to funding your lifestyle choices.
ISA’s and Funds that provide 1-2% AER are essential to make the most of tax-free allowances but will struggle to provide long-term passive income outside of compound interest so those of you seeking something more substantial will need to find and create alternative monthly incomes.
Picture this – a lazy morning, the sun is shining across a beautiful green lawn as you browse the morning papers and sip fragrant, freshly ground coffee (or tea if you prefer!). We know what you’re thinking. ‘What a perfect Sunday’. But it’s not Sunday – It’s Monday morning, the first Monday morning of your retirement and the first day of financial freedom.
Only it’s not – at least for the vast majority of us. The vision of a decent, let alone comfortable retirement, is a far cry from the reality of today. Government plans see us retiring with a measly state pension at 65 years old, with new changes planned for 2026 to increase this further to 67 years old. For many of us, the prospect of 20, 30 or even 40 more working years spent contributing regularly to our own pension pots to be left with a current income of £125 per week is enough to make you think seriously about what your own future financial prospects might be.
In July 2018, SevenCapital surveyed 1,200 people across the UK to understand just how far you’re planning for your future – incredibly a whopping 41.6% of you have absolutely no investments – with 45-55 year olds topping the charts, over 50% of whom currently have no investments.
Time to think about the future
Many of you reading this will have already maximised your ISA allowance and will be making the maximum contributions to your Private or Workplace pensions. According to our survey, ISA’s are the number one investment choice with 18.8% of women and 23.7% of men already using this must-have investment vehicle. Clearly, some of us are already thinking about and planning for the future, but will it be enough and arrive soon enough?
Long gone are the days of final salary pensions. As tough as it may sound, our future is in our hands and creating a portfolio to fund your retirement plans, for now, or for later, is no longer an option – it’s a must.