Ireland's booming property market does not present many opportunities for investors looking to build or expand their portfolio. Construction on city-centre apartment schemes is slowing down, and limited choice coupled with high demand have put prices at a premium. Investing in the UK property market may initially appear complicated, but a London-based property company marketing a new "all-inclusive" service to Irish investors may provide an option.
Residential property prices rose by 10 per cent in the UK last year, and with mortgage rates low the chief economist at NatWest Group forecasts that prices will rise even more in 2000.
Chancellor Gordon Brown has stated his intention to "hit stamp duty" affecting the higher-priced sector in an effort to take the heat out of the market. So potential investors would be advised to jump in there now.
The Townends Group, with a network of 40 branches throughout London, Surrey and Middlesex, is targeting potential investors in Ireland, Hong Kong and the Middle East for its new "One Stop" property investment service.
Projecting average yields in the region of 8 to 10 per cent per annum, Mr Rupert Smith, Investment Director at Townends, said the service provides an excellent opportunity for investors as yields can grow to 20 per cent. Irish investors account for 35 per cent of the client base.
Average prices in the south-east, in what is known as the powerhouse of the UK economy, range from £200,000 for a twobedroom apartment in central London to £120,000 for a similar property outside the area. Monthly rental on a central London property would average £1,250.
"In general, apartments see better returns and the residential lettings division at Townends maintain strong links with corporate clients and relocation agencies," Mr Smith said.
Corporate lettings not only achieve higher yields for the investor, but are considered to provide a more desirable tenant.
Designed as a hands-off all-inclusive property investment package, the One Stop service takes you from the first to the final step with a minimum of hassle.
Administered from a central London office, the Townends team will conduct the property search and projections based on the client's financial specifications for the investment.
Then they will acquire the property, arrange the mortgage, undertake any redecorating or refurbishment that is required, supervise the residential letting and oversee the day-to-day management of the property, including the collecting and forwarding of rent.
An agency fee of 15 per cent is calculated on the monthly income of the property, which clients are not subject to if the property is lying dormant.
This service provides advice on the best yields, the best growth and the best type of portfolio to acquire, regardless of whether it is a private client purchasing one property or a corporate client seeking a multitude of properties.
Recent changes in the British Housing Acts coupled with the introduction of Buy to Let mortgage products have made investing in rental investment properties more comprehensive.
In the past, property investors have been forced to borrow at commercial interest rates, but that is no longer the case. The recent cut by the Bank of England brings interest rates to the lowest level in 30 years and means that property portfolios now show the most reliable and impressive returns, compared to other investments in the stock market.
For an Irish investor looking to acquire a property, or a portfolio of properties in the UK, the most difficult and daunting task is locating a property that will guarantee high yields.
Investment Concepts aims to provide a service that is tailored to the individual needs of the investor, be they private or corporate, including the location of the property and whether the emphasis is on maximising capital growth, rental income or both.
The fact that Townends has an extensive network of branches in the south-east area gives potential investors an assurance of expertise. Your choice of area is not limited by their location, Mr Smith said.
"We draw on a vast range of properties, including some 1,500 on our portfolio, but we also liase with other agencies, major house-builders, property developers and our own Land & New Homes Department," he added.
An extensive and detailed feasibility study is undertaken to ascertain realistic projections for rental income, capital growth and net returns. These projections can be based on a five to 25-year period.
The managing director of Townends, Mr Tony Addinall, stressed that this investment should be viewed as medium to long-term.
Growth in the UK economy is forecast in the region of 2 per cent for this year. The underlying inflation rate is 2.8 per cent. Base rate is predicted to peak at 6.75 per cent and, according to Mr Andy Beck, Senior Manager at NatWest Bank, "given the above forecasts, investors are facing declining interest rate returns on traditional investments and as an alternative have been looking to the housing market via `Buy to Let' as a means of providing income". The objective of One Stop is to ensure a prompt and efficient service that causes minimum hassle to the investor. They can supervise any redecorating or refurbishment, organise details such as the changeover of utilities, and have tenants lined up to move on from the first day - ensuring that the investment is earning from the offset.
