The Future of investing in Bristol
With house prices at an all-time high, rental values on the same trajectory and an ever-increasing avalanche of compliance and restrictions, you would be forgiven for thinking that maybe new investors have “missed the boat” in Bristol. In addition to this, the current consultations on planning in South Gloucestershire, affecting the northern parts of the city, beg the question “what does the future hold for investors in Bristol?”
The Bristol Boom
In order to answer this question, let’s first look back at the “track record” of Bristol, with some facts, figures and statistics, over the past few years.
- Bristol has seen consistent growth over the past ten years (2011 – 2021), despite geopolitical influences. During this period, the average house price in Bristol has increased by 66% versus a UK average of 53%
- Bristol has a 77.1% employment rate, versus a UK average of 74.7%. This is especially significant, as Bristol is a university town, with just over 31% of those deemed “economically inactive” being students.
- 91% of those renting in Bristol are aged between 18 and 39. Spend any time in Bristol and this will make sense; the city has an energetic vibe; it is a progressive city with a strong innovative and entrepreneurial culture.
- During the past 6 years (2016 – 2022) the average price of an average sized, non-ensuite room, in a shared house (HMO room), in the south of the city, has risen by 22.7%
So, this tells us, that Bristol has a strong track record – but what about all the compliance, planning restrictions and potential rent controls coming its way?
Bristol is not alone in this, the Private Rental Sector (PRS) is governed by 178 pieces of legislation and regulation and, this grows rapidly year on year. If you own or manage a house of Multiple Occupation (HMO) then, due to planning directives, pretty much anywhere in the city that you would want to run an HMO will now need a licence. This is because HMOs are deemed to be “high risk” rentals and so, even more regulated than other rentals. For those owning and/or managing properties which are not HMOs, there are also parts of the city with selective licensing schemes, which means that anything you rent out will need a licence. There can be hefty costs involved too, with a selective licence costing almost £800 and an HMO licence costing £1300 in some parts of the city.
In addition to licensing, there is also the question of single banding for council tax, for HMO rooms. This is not an issue so far in Bristol, but has been for some time in other, nearby cities, like Reading and Western, so property investors would be very wise to have this on their radar. Single banding of HMO rooms has been branded “the toilet tax” because, one of the things that the Valuation Office Agency (VOA) will take into account, is the ratio of bathrooms to tenants in a property. Another is the adaptations that have been made to that property, in order to turn it into an HMO. Minor adaptations (like locks) are fine but major adaptations and adaptations on each floor may well be an issue – kitchenettes inside rooms and separate showers and baths and WCs are all things that will be taken into consideration when the VOA is making a decision on whether you have structurally altered the property in question, in order for it to be deemed to be a self-contained unit (SCU) and therefore be banded separately.
The future is bright!
Despite the amount of regulation, legislation and compliance in the PRS, the future of Bristol is bright. I truly believe this and, if I didn’t, I wouldn’t be investing here. One only needs to spend a small amount of time in the city, for it to get under your skin – it’s food game is strong, its music culture is too and there is a wonderful sense of friendship and camaraderie among the city’s inhabitants.
Here are just some of the many reasons, to believe and be excited about, a bright and fruitful future for Bristol:
- Excellent rail links. The spiraling cost of rent in London, has meant that many from the big smoke, struggling with the cost of living, and who feel a “kinship” to many parts of Bristol, have been able to move here and commute to work. Temple Meads to London is only 90 minutes.
- Great communication links – M4 to the City; M5 to the Midlands. It is possible to access the length and breadth of the country, quickly and easily from Bristol and, often quicker than getting from one side of the city to the other in rush hour!
- Thousands of students return after graduation. Bristol is a student city, with two large and world-renowned universities, both over in the South and the North. Many students return because they have enjoyed their time here and there are many career opportunities for them in the booming tech industry and a thriving business start-up scene.
- Employers, Amenities, Hospitality, Regeneration. Bristol has it all. The city has seen lots of regeneration over the years, with plans for more – Temple Meads station is to enjoy a share of a £5 billion budget, to decrease journey times and improve facilities; The Riverside Housing Development, over in Western Harbourside has a budget of £450 million and, with a budget of £300 million, Bristol university is looking to invest in a new campus and residential buildings.
With a great track record, a wonderful, friendly, and lively atmosphere, and exciting plans for the future, there really has never been a better time to invest in the city of Bristol. It’s a fantastic city, which really does get under your skin, we love it and anyone who spends time here, usually ends up falling under its spell!
As Landlords and Investors ourselves, we can help and advise on all aspects of your portfolio. If we can help you then give us a call on 0117 440 6789 or email us here together we can make being a landlord simple, passive and stress free!
