London property boom set to benefit Plymouth, expert says
01-26-2015
By Plymouth Herald By WILLIAM TELFORD, Business Editor
PLYMOUTH is ripe to attract big-money investors in 2015, a leading Plymouth banker says.
Dave Ottley, of Plymouth-based independent banking consultancy Balance for Business, said he is already aware of potential investors circling the city.
This, he says, is because the London property boom means investors can borrow against the escalating value of their portfolios and are looking for new ventures in which to plough that cash.
With those same London property prices, and low yields on rental, pushing them out of the capital, investors are looking at attractive cities such as Plymouth.
It comes as Langage-based Balance reports a successful 2014 in which it saw about £100million in finance approved to clients, about 85 per cent being from the Plymouth area and likely to invest locally.
"Plymouth is very interesting at the moment," Mr Ottley said. "We have a lot of investors in the London area with great assets, but, with the yields on rental income being 4.5 per cent to five per cent, the return on investment is quite low.
"We've spoken to people who want to raise cash in London and invest it in the South West, picking up a seven per cent return. The yields are more attractive."
He said London is therefore having a "knock-on effect".
"A lot of foreign money has come in, which has pushed prices up," he said. "Investors there are seeing other areas that work better. Historically it was the Midlands, but now Plymouth is leading the way, look at the brown-field development at Millbay and what's going on around it.
"But people in London don't want to sell, they'll raise against it, release cash and put it to work elsewhere."