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LEADING UK sales and letting agency, Portico, recently announced the launch of a new service called Portico Portfolio, which enables landlords to make smarter property investments using a company structure that maximises tax efficiency.
In partnership with London-based Accountancy firm, Accounts and Legal, who will handle tax-related operations, Portico will use their lettings expertise to curate and manage bespoke property portfolios for clients. Portfolios will focus on northern-based properties and will be designed with the specific goal of achieving high yields.
Portico Portfolio has been created with the intention of helping landlords or anyone sitting on savings make profitable investments in up-and-coming neighbourhoods in northern England. These locales typically offer below-average entry costs while allowing property investors to achieve higher yields.
Data from Portico’s Rental Yield Map illustrates that average long-let rental yields in London vary from 1.5 to 6.7 percent. The highest rental yields at present are found in the south east borough of Bexley, near the Yarnton Way Sewage Works located between Belvedere and Abbey Wood. The lowest rental yields are found in Mayfair, primarily at addresses located on the prestigious Old Bond Street.
Long-let rental yields at norther locations are far higher than London long-let yields. Recent research from Portico shows that landlords with properties in Liverpool achieve an average long-let rental yield of 8.3 percent, and that Liverpool’s highest long-let rental yield stands at a staggering 13.6 percent. Manchester’s long-let rental yields average 6.5 percent and top out at 7.6 percent.
As Manchester and Liverpool enjoy booming tourism markets, there are a number of new developments that feature serviced apartment planning status. These offer opportunities for short-let management and when managed via Portico Host, can provide even more impressive yields.
Manchester and Liverpool landlords can benefit from more than just high yields. Despite a trend that shows London property prices plateauing, forecasts predict that the north-west region and its cities will benefit from the UK’s most robust levels of capital appreciation over the next half-decade.
On analysing Land Registry data, Portico has found that average property prices in Liverpool have increased by a stunning 19.34 percent over the past five years, jumping from a modest £108,267 in June of 2013, to a more impressive £129,562 in June of 2018. Manchester’s average property prices have sustained incredible growth, increasing by a massive 47.76 percent. In June of 2013, the average price was £119,951; by June of 2018, the average Manchester property sold for £177,243.
Reports indicate that the north west will likely enjoy continued increases in property price over the next five years. The predicted price increase stands at a minimum of 21.6 percent.
This impressive growth trend can be attributed to an uptick in the number of companies reducing costs by relocating north from London. Additionally, supportive regeneration plans and government policies are contributing to strong economic growth throughout the region.
Portico Portfolio offers a simple, streamlined process: Clients begin by determining their property investment budget (Portico Portfolio accepts those with budgets of £150k plus), after which Accounts and Legal set up a special purpose limited company. This acts as the investment vehicle while allowing the client to maintain 100 percent shareholder status.
As properties are owned within a company structure rather than by an individual, interest is tax deductible and income may be taken as dividends. As an alternative, income may be retained in the company, allowing for a tax-efficient exit at a later date. Portico Finance can help with arranging commercial financing, which is typically 50 percent LTV. Using this formula, £500k equity allows clients to purchase portfolios worth approximately £1m**.
The team at Portico Portfolio will then selectively source strategically chosen properties in desirable city centre locations in Manchester and Liverpool. Portico Portfolio take their service several steps further, managing the entire process from sourcing properties to exchange. Sourcing finance, surveys, conveyancing, and the expert tax advice from Accounts & Legal are managed on behalf of Portico Portfolio clients.
After property / properties have been secured, Portico Portfolio manages the properties with Portico Host or Portico Lettings services where applicable; clients are conveniently billed at the end of each month.
In addition, clients are free to buy and sell properties at any time within the company, and they have the ability to sell or transfer shares in the company to other parties at any time.
Commenting on the Portico Portfolio’s launch, Portico’s Marketing and Business Director, Fiona Vetch stated:
“With the launch this year of Portico into Liverpool and Manchester, we wanted to create something unique that makes it easy for London landlords to invest in the north west.
Launching Portico Portfolio allows us to combine our lettings and Portico Host service with our financial services expertise, to generate impressive and tax efficient yields for property investors.
We hope Portico Portfolio will allow both seasoned and inexperienced landlords to take advantage of our strategic advice and knowledge of the market to build strong rental portfolios.”
Please contact portfolio@portico.com or 0207 099 4000 to learn more about Portico Portfolio. Portico properties are available exclusively through Portico Portfolio, and are also sourced from the open market. Get an instant property valuation in 60 seconds at https://www.portico.com/valuation/.
