Investors return to buy-to-let market

Leading East Midlands housebuilder, David Wilson has seen a rise in buy to let investors enquiring about its homes in a bid to make the most of once in a generation prices.

According to the developer it is not just seasoned investors seizing the opportunity but more significantly Sales Director Philip Lacey has spotted an emerging group of first-time buy to let investors using the downturn as a chance to start a professional property portfolio. Philip said, “New build property has always appealed to investors due to its low maintenance and because of housebuilders’ experience in dealing with bulk purchases.

“However, the economic downturn and uncertainty in the housing market over the past 12 months has meant we’ve seen a definite reduction in the numbers of customers coming to us for buy to let. Until now that is; in March alone we received a number of significant volume deals, interestingly from individuals brand new to property investment.”

The buy to let sales have been spread across a number of David Wilson’s East Midlands’ developments and in varying volumes from two to 24 plots, proving that the region has significant appeal as an investment opportunity.

David Wilson East Midlands’ observations are backed up by a recent report from the Association of Residential Letting Agents (ARLA), which says that buy to let property sales had doubled during the first quarter of the year*.

One such new investor is 59 year old Iqbal Gelu from Surrey. After 35 years spent working in insurance, he has turned his attentions to property investment both here and abroad. But it was bricks and mortar in Leicester that caught his eye first.

So far Iqbal has bought three one-bedroom houses at the Scholar’s Grange development in Scraptoft and he is currently working with David Wilson East Midlands on a deal for a further seven. He said, “Despite this being my first foray in to buy to let I’m confident that now is an excellent time to invest, particularly in Leicester.

“In some locations there is an over supply of rental property but in light of Leicester’s recent improvements and the programme for further regeneration I can see demand here remaining strong. Scraptoft itself is a prime suburb and the David Wilson East Midlands development makes the most of the mature, green surroundings. The development is extremely well planned so there aren’t huge numbers of smaller units and those that have been built are spread out amongst the larger, detached homes.”

Iqbal’s investment will give him around a 7% yield which he says is good for the long term and will likely improve over the next few years. “Whilst the price was very attractive this is still a long term investment. I’ve spoken to a number of letting agents in the city and am confident the houses will let for between £400 and £445 per month. And by buying now I expect to achieve capital gain by the time I sell in approximately five years time.”

The one-bedroom iLife house style which Iqbal has bought is an entirely freehold property, with its own front door and small front garden. The accommodation comprises bathroom and utility space, plus bedroom downstairs and an open plan kitchen/living area upstairs. Some designs have full height windows and a Juliette balcony while others have ingenious storage spaces, making these homes an excellent compromise between apartment living and a traditional two-storey house.

For more information about investment opportunities at David Wilson East Midlands’ developments, contact Philip Lacey direct on placey@dwh.co.uk. Scholar’s Grange is located on Covert Lane, Scraptoft. Currently for sale is a selection of three-, four- and five-bedroom houses priced from £201,995. Scholar’s Grange is open Thursday to Monday from 11am until 6pm.

Details of all the developments can be found on the website, at Dwh.co.uk.