Property investors buying full portfolios in some UK regions

Property investors

Research compiled by Octane Capital showed that when purchasing ready-made portfolios, investors were spending £1.2m on average

Some British property investors are spending an average of £1.2m to buy full portfolios rather than single properties, with London producing the lowest yields.

Research compiled by Octane Capital, a specialist property lender, showed that when purchasing ready-made portfolios, investors were spending £1.2m on average. Such property packages had an average of 6.4 bedrooms, equivalent to £196,000 per bedroom and an average yield of 2.9 per cent.

The lender said the North East was providing the best value for money for investors whilst London was the most active in terms of the purchase of ready-made property portfolios.

London accounted for 18 per cent of the national total, Octane Capital said, although the region has higher property prices with each bedroom costing about £556,000. This means a ready-made investment portfolio produces an average yield of 1.4 per cent.

In contrast, investors in England’s North East were spending just over £1m for portfolios that held an average of 9.7 bedrooms, or £104,000 per room, leading to a yield of 4.5 per cent.

In Yorkshire and the Humber, the lender found that the average portfolio cost £1.1m for an average of 10.1 bedrooms, or £106,000 per room. That led to the second-highest average yield at 4.4 per cent.

Jonathan Samuels, co-founder and chief executive of Octane Capital, said: Portfolio investment offers advanced investors a far quicker path to scaling their portfolio and, as is often the case when buying in bulk, doing so can result in securing a greater level of value per unit.  But it’s also the convenience of this approach that appeals to many, allowing them to acquire multiple properties in a single transaction.

Samuels said bulk-buying allows investors to renovate en masse, ‘to bring these homes to market within a similar time frame, so that they can start to earn a consistent return across the board’.

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