High-end investors ramp up bulk-buying of rental properties

Well-heeled investors are spending an average of £1.2m on bulk-purchases of rental units according to a finance firm.

The analysis shows that this typical bulk-purchase is of multiple units with an average 6.4 bedrooms in total, making the deals at £196,000 per bedroom and an expected yield of 2.9 per cent. 

Octane Capital, the firm making the claim, does not state how many investors are operating at this level.

But it says London is the most active area of the market despite being the most expensive with portfolios containing an average of 3.6 bedrooms at a total average price of £2m - and a meagre yield of just 1.4 per cent.

In the West Midlands, investment portfolios cost an average of £1,027,722 and contain an average of 5.1 bedrooms, which works out as £201,000 per room, and in the South East, investors pay £1.4m for an average of 7.7 bedrooms, equivalent to £178,000 per room.

The most affordable investment portfolios are in the North East where investors are paying a little over £1m for portfolios that contain an average of 9.7 bedrooms which works out £104,000 per room. As a result, the North East is home to the highest yield - but even then it’s only 4.5 per cent. 

An Octane spokesman says:  “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.”