Guide On Reaping Profitable Rewards: Expected Rental Yields from Bournemouth's Buy-to-Let Market
Welcome to the vibrant and bustling coastal town of Bournemouth, where the possibilities for profitable buy-to-let property investment are endless. Known for its stunning beaches, lively nightlife, and thriving economy, Bournemouth has become a highly sought-after location for both residents and tourists alike. With a growing population and strong economic appeal, this seaside gem offers a promising opportunity for those looking to enter the world of property investment. From its ever-expanding student population to upcoming regeneration projects and a history of impressive property price growth, Bournemouth has all the makings of a successful investment venture. So why wait? Let's delve into the expected rental yields from Bournemouth's property market and discover the potential rewards waiting to be reaped in this flourishing town.
Population 197,000
Price Growth 6.8%
GVA £12bn (BCP)
Rental Growth 7.9%
Visitors 11.7 million
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Unveiling the Charm of Bournemouth
Bournemouth, a seaside town on the south coast of England, effortlessly captivates the hearts of those who visit or call it home. This picturesque locale is not only celebrated for its clean, golden beaches which have garnered numerous awards but also for its biologically diverse gardens that offer a serene escape from the hustle and bustle. Bournemouth skillfully blends excitement with tranquillity, providing a perfect balance for residents and visitors alike. Every September, the town comes alive with the Arts by the Sea festival, a cultural extravaganza that transforms Bournemouth's coastline into a vibrant hub of creativity. This event features an array of attractions including literary readings, open-air theatre events, dance acts, and the famed "Sounds by the Sea" live performances, catering to a diverse audience with its rich programming. Beyond this annual event, Bournemouth is a lively epicentre for creative minds throughout the year, housing hundreds of creative agencies and a university specialising in the arts. This creative atmosphere is further enriched by the town's literary connections to renowned writers such as JRR Tolkien, Enid Blyton, and the author of Dr Jekyll and Mr Hyde, who have all found inspiration in this enchanting town. The charm of Bournemouth is magnified by its Upper, Central, and Lower Gardens, all of which are award-winning and offer a variety of activities. Whether it's playing tennis, going for a run, or enjoying the eclectic mix of street food stalls, there’s something for everyone. For the more adventurous, Bournemouth provides a plethora of water sports options, including kayaking, sailing, and surfing, making the most of its stunning seaside location. With such a variety of experiences on offer, Bournemouth stands as a testament to the seamless blend of natural beauty, cultural richness, and recreational diversity, inviting all to discover its unique charm.
The Student Appeal and Rising Population
Bournemouth boasts an energetic student community, with a population exceeding 19,000, roughly 10% of its overall population, imbued with a fun, international atmosphere. This largest resort in Dorset, a coastal town brimming with character, beckons students with its vibrant lifestyle and scenic beauty.
The town's tourism sector, enriched with local language schools and universities, draws students globally, making it a cultural melting pot and an ideal locale for academic pursuits. Bournemouth University, the town's crown jewel, consistently ranks highly with its top-tier programmes in Anthropology, Engineering, and Social Work, making it the most sought-after institution. For those with a penchant for creativity, Arts University Bournemouth offers a gateway into the creative and arts-based industries, while AECC University College caters to future professionals in health sciences. Adding to the student-friendly vibe, Lulworth Student Company provides well-situated accommodation, a stone's throw away from both the beach and the town centre, perfect for both study and leisure. For students seeking a blend of academic excellence and vibrant town life, Bournemouth presents itself as an unparalleled choice. With its eclectic mix of educational institutions and a lifestyle that balances study with leisure, Bournemouth warmly invites students to consider it their new home, promising a unique and enriching university experience.
Economic Resilience and Tourist Magnetism
Bournemouth's economy exhibits remarkable resilience and tourist magnetism, underpinned by strategic plans laid out by the council and its partners. These initiatives are aimed at bolstering the year-round visitor economy, enhancing the international education offer, and expanding the scope of business tourism. As Councillor Beverley Dunlop, Portfolio Holder for Tourism, Culture and Vibrant Places aptly puts it, "Tourism is a key sector for our region," a sentiment that echoes the plans' potential benefits for the local economy and community. Generating over £1.3bn annually, tourism not only supports thousands of jobs but is a cornerstone of economic stability in Bournemouth. The council's aspirations to nurture the visitor economy and position Bournemouth as a world-class leisure destination are reflective of a broader ambition. The intertwining of visitor experiences and resident well-being serves to enrich the quality of life for all, creating a symbiotic relationship between the town’s economic vigour and its communal harmony. Despite the recent challenges faced by the local tourism industry post-COVID, the strategy laid forth offers a clear and compelling vision for the destination's future. It stands as a beacon of optimism, aimed at revitalising the visitor economy and affirming Bournemouth's status as one of the premier coastal destinations globally. With statistics showing a surge from over 8.8 million day visitors and 1 million staying visitors in 2021 to a total of 11.7 million visitors in 2023, supporting over 12,000 local jobs, the trajectory for growth is evident. The service sector, especially with a third of town centre businesses thriving in the leisure industry, signifies Bournemouth’s burgeoning nightlife economy, valued at £150 million and employing 4,000 individuals. This economic framework positions Bournemouth not just for resilience but poised for significant growth, embodying a destination where economic prosperity and cultural vibrancy coalesce.
Regeneration and Investment Horizon
In an ambitious stride towards rejuvenating its landscape, Bournemouth is set to witness a transformative redevelopment of a prime town centre site. Legal & General and the council investing over £330 million in town centre regeneration, a venture approved in 2023 with an estimated cost soaring above £300 million. This extensive project is poised to introduce a plethora of contemporary structures, including a state-of-the-art hotel complemented by a sky bar, a new cinema complex, and modern apartments designed to redefine the town's skyline.
Fortitudo boss Richard Cars articulates the potential timeline, stating, "If all goes well, the current site could be demolished and the new structures put in place by 2027." This timeline hints at a not-so-distant future where Bournemouth will bask in the glow of its revitalised centre, enriching both the aesthetic and functional appeal of the town. Echoing the sentiments of progress, David Kelsey, the chairman of the Bournemouth, Christchurch and Poole planning committee, emphasises the development's inclusive vision, "The scheme would offer regeneration for the area and offer a chance for many people to live in small flats in the town centre, which were likely to be affordable for younger people starting on their careers." This statement underscores the project's commitment to fostering a vibrant, inclusive community core, particularly catering to the aspirations of the younger demographic. As part of the planning process, the consent granted necessitates further discussions regarding expected planning conditions. These critical details are to be meticulously finalised by the triumvirate of the planning committee chair, vice chair, and senior council officers, ensuring a well-rounded and coherent developmental blueprint. Further amplifying the town's regeneration narrative, the government has earmarked a significant £23 million investment in Boscombe under the auspices of the Bournemouth Town Investment Plan as part of a ‘Town Deal’. This governmental nod in March 2021 paves the way for seven robust projects, each bearing the promise of enhancing Bournemouth's economic and social fabric, cementing its reputation as a hub of innovation and growth.
If you are interested in reading a full write-up from the BCP council with plans on regeneration and plans to grow the tourism sector follow the source here
Bournemouth Property Market
Diving into the dynamics of Bournemouth's property market reveals a thriving sector, with the town ranking as the sixth-highest in the country for house price increases. The staggering growth of 27.21% catapults Bournemouth into the limelight, with average house prices surging from £270,588 in 2019 to an impressive £371,718 in 2022/2023, averaging 6.5% growth per year. This remarkable ascent in property values places Bournemouth alongside other cities such as Swansea, Leicester, Plymouth, Norwich, Manchester, Southampton, and Slough, yet stands out by its rapid growth rate. Both Bournemouth and Poole boast positions in the top 10 for the highest average house prices nationally, with Poole's average reaching £424,635 in 2022/2023.
Detached £550,000
Semi-Detached £345,000
Terraced £320,000
Apartments £240,000
This phenomenal growth trajectory underscores the area's attractiveness and burgeoning demand. As Altas Ceramics insightfully notes, "It isn’t just economic factors which can affect the value of your home. Building features such as natural stone tiles, underfloor heating, and solar panels, can significantly boost your property's appeal and value." Indeed, location emerges as a pivotal factor influencing house prices, with certain locales within Bournemouth more sought after, thus driving up desirability and demand. High rental demand further fuels investment in the region, reflecting a buoyant market ripe with opportunities. The property breakdown reveals a dominant presence of flats, accounting for 36,000 of the housing stock, followed by 40,000 detached, 18,000 semi-detached, and 8,000 terraced homes. Despite the prevalence of flats, houses continue to command a premium, particularly as family homes, highlighting a diverse and dynamic property market. Bournemouth's property market, thus, presents a fertile ground for investors and homeowners alike, buoyed by its economic resilience, scenic allure, and strategic enhancements.
Expected Rental Yields and Growth Prospects
The rental market is booming and offers excellent investment opportunities for buy-to-let investors. The average monthly rent in Bournemouth is £1,366, which is similar to the national average of £1,279 PCM, according to the HomeLet Rental Index. The high demand for rental properties in Bournemouth, coupled with limited supply, has led to rapid rent increases in the city. The average rent in Bournemouth increased by an impressive 9.6% in 2023 compared to the previous year, as reported by the BBC.
The rental prices in Bournemouth vary depending on the property type and size. For example, studios can fetch £750 per month, 1-bedroom apartments are around £900, 2-bedroom properties cost £1,200, 3-bedroom homes can be rented for £1,600, and large 4+ bedroom homes start from £2,450.
Bournemouth is a popular tourist destination, which has opened up opportunities for short-term letting. Landlords who choose to rent their properties for short periods can expect higher rental yields, especially during peak seasons such as summer holidays. The average nightly rate for short-term rentals in Bournemouth is £130 throughout the year, but it can go up to £180 during peak seasons. Landlords who manage their properties directly can expect an average occupancy rate of 55%, whereas those who opt for a management team often see rates around 70%.
While investors who choose traditional long-term lettings in Bournemouth can expect a gross yield of approximately 6%, short-term rentals can command around a 12% yield. However, it is important to consider the higher running costs associated with short-term rentals. The strong performance of the rental market in Bournemouth highlights the city's potential as an investment hotspot, where the interplay of demand, tourism, and strategic property management offers promising prospects for both long-term stability and lucrative short-term gains.
Bournemouth Buy-to-Let Overview
Bournemouth is an appealing choice for smart investors who are looking to take advantage of the growing buy-to-let market. The town's combination of a charming coastal location, a lively student population, and a thriving tourism industry makes it an attractive option for those who want to diversify their investment portfolios. Furthermore, the recent increase in property values, alongside the anticipated rise in rental demand, further cements Bournemouth's status as a hotspot for investment.
Investors will discover a range of options when navigating the intricacies of the Bournemouth property market, from cosy sea-view apartments to spacious family homes. The secret to maximising returns lies in making strategic choices and managing them wisely, with a focus on locations that offer the highest rental yields and the potential for capital appreciation. Understanding the nuances of the local market, including the preferences of the student demographic and the seasonal variations in tourist demand, can have a significant impact on investment outcomes.
Bournemouth's upcoming regeneration projects and substantial investments in the area suggest a bright future for the town. These developments not only promise to raise the town's profile but are also expected to stimulate further economic growth and attract a diverse mix of residents and visitors. For investors, this translates into sustained demand robust rental yields and capital growth, making Bournemouth an enticing proposition.
With the right strategy and knowledge, investors can confidently explore the Bournemouth buy-to-let market and tap into its potential for rewarding returns. Whether it's taking advantage of the short-term rental boom or securing long-term tenancies, Bournemouth is an excellent example of the enduring appeal of coastal property investment. Engaging with this dynamic market offers a unique opportunity to participate in the town's ongoing success story, enjoying the benefits of both immediate rental income and long-term capital growth.
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