Buy-to-let landlords and other property investors are looking away from the capital and further north for investment opportunities in property.
Although London has long been a favourite spot for property investors – especially those from overseas – high housing prices, a stagnating market, and low rental yields are making the city a less attractive prospect.
Instead, property investors are turning their sights to more northerly regions of the UK.
The north is definitely growing in popularity when it comes to investment opportunities in property. According to research by London estate agents Hamptons International; there has been a 31% decline in investors buying in the capital since 2010.
The same research shows that the number of London property investors buying in the north and Midlands rose by 34% over the same period.
The north-west is the most popular choice for property investors. Since 2010 there has been a 9% increase in the amount of people choosing to invest there.
Better returns in the north- Investment opportunities in property
Housing prices in London are the most expensive in the country; they seem to have hit a ceiling in terms of affordability. Prices have stagnated in recent years, suggesting the days of high capital growth for London investors are over.
These high prices also mean lower rental yields. Postcodes in London boroughs such as the City of London, Kensington & Chelsea, and Westminster, Islington & Camden have some of the lowest in the country, averaging 1.4%, 1.7% and 2% respectively.
In contrast to this, northern cities provide some of the best investment opportunities in property with postcodes in this part of the UK having the country’s best rental yields . Investors into Liverpool’s L7 postcode can expect yields of 10.3%, while average yields in Manchester’s M14 area can reach 7.6%.
This is in part due to the large difference in house prices between north and south. An average house price in the north-west is £152,340, compared to £353,400 in the south-east.
The north also has a much more buoyant property market. House prices in Leeds were some of the fastest-rising in the UK at 3.4% in the year to May 2020. The northern property market has bounced-back extremely well after the pandemic.
Northern Powerhouse effect
The Northern Powerhouse scheme, which has brought high levels of government and private spending to the north, has also helped create more investment opportunities in property.
By giving more money to northern regeneration projects and infrastructure improvements, many major UK employers are now moving to key Northern Powerhouse cities. This has led to increased demand from people also moving to the area to take advantage of these jobs.
Employment prospects aren’t the only reason rental demand has increased in the north. Following the recent lockdown, outdoor space and places to work from home have become increasingly important for tenants.
According to the Hamptons International research, “A growing number of [London] thirty-somethings are all looking further afield – especially since working remotely has proven itself such a thoroughly practical reality.” The average age of people looking to leave London is now 39 – down from 49 ten years ago.
Find out more- Investment opportunities in property
To find out more about northern investment opportunities in property that you can take advantage of today, contact North Property Group now.