Most attractive UK rental growth rates found in the North West

December 13, 2023

Share to: 

Article Summary

Manchester
  • Buy-to-let investors should strategically choose areas with the most robust rental yields to maximise their return on investment (ROI).

  • The index indicates a substantial 7.3% year-on-year rental growth in England for November, bringing the average rent to £1,666 per calendar month.

  • Property price growth remains subdued, and buyers are benefiting from lower mortgage rates, which dipped below 5% in the latter part of 2023

Introduction

For many property investors in the UK’s 2023 buy-to-let market, the standout feature has been the remarkable rental growth. As the property sector grapples with an imbalance between supply and demand, the demand for private rented accommodation has surged, resulting in a significant uptick in rents, even as property prices have experienced a decline.

At first glance, this might seem like a property investor’s dream scenario. However, prospective buyers must exercise diligence. Blindly investing in properties across any location won’t guarantee substantial gross rental yields.

Buy-to-let investors should strategically choose areas with the most robust rental yields to maximize their return on investment (ROI). The latest Goodlord Rental Index identifies the North West as the top area for rental growth in England.

 

Let’s delve into the rental growth figures provided by the Goodlord Rental Index:

The index indicates a substantial 7.3% year-on-year rental growth in England for November, bringing the average rent to £1,666 per calendar month. The North West emerges as the leader in rental growth, boasting an impressive 11% increase compared to the previous year.

While other regions like the East Midlands, North East, South West, South East, and West Midlands also show notable rental growth, none rival the North West’s robust performance. Cities like Liverpool and Manchester, within the North West, continue to attract tenants willing to pay premium rents.

William Reeve, CEO of Goodlord, notes, “Rents are up by over 7% compared to November 2022, reflecting the intensity of demand the market has experienced since then.”

Although the winter season typically witnesses a slowdown in lettings, the market demand remains intense, maintaining rents at a steady level compared to October figures. It’s essential for potential investors to understand these nuances when navigating the dynamic UK property market.

However, on a month-to-month basis, rental costs experienced a 2% decline from October to November. Despite this dip, it’s worth noting that the reduction is less severe than in previous years during the same period.

How do these rental figures align with other key statistics in the UK housing market?

Aside from attractive rental growth, buyers can find additional incentives in the form of significant asking price discounts offered by sellers. According to research from Rightmove and Zoopla, sellers are providing substantial discounts, with some dropping prices by as much as £18,000 – the most significant discount in five years.

Property price growth remains subdued, and buyers are benefiting from lower mortgage rates, which dipped below 5% in the latter part of 2023. The market is showing signs of recovery, with increased interest in buy-to-let properties, especially as buyers regain confidence amid improved economic conditions.

Despite Nationwide’s November House Price Index reporting a 0.2% increase in property prices between October and November, there’s an overall positive trend in the market’s recovery. While property prices are expected to remain relatively low into 2024, the current recovery suggests that affordable properties may become scarcer.

 

Why should investors consider the North West?

Beyond the impressive rental growth reported by the Goodlord Rental Index, the North West presents other compelling reasons for property investment.

One of the standout features is the affordability of properties in this region. Even in major cities like Liverpool, the average property price is a modest £179,129, significantly lower than the UK average of £292,882.

Additionally, Savills forecasts a substantial 20.2% capital growth in the North West over the next five years, surpassing the UK average and positioning it as one of the most promising growth prospects in the country.

Conclusion

Considering these factors, including the significant rental growth over the past year and the projected 6% national rental growth in 2024, the North West remains an attractive option for buy-to-let property investment. Explore the latest investment opportunities in Stockport or the new buy-to-let options available in Preston, showcasing the region’s ongoing viability for property investors.

To find out about more of some of the most attractive new-build and regeneration projects that Manchester has to offer, click here.

Share to: 

Explore our property in Manchester

The Bailey

From £249,950

Yield: 13.5%
   In Construction
   Est. Q4 2024
   Lease Length: 250 Years

Related Articles

Manchester revealed as the UK’s best connected city

Manchester has been announced as the UK’s best connected city for transport and communications, in a recent report by Transport for Wales.

Read More →

Manchester named top UK city for Foreign Direct Investment

Manchester was recently recognised as a leading city for foreign direct investment in the UK, coming only second to London.

Read More →

Red Bank Manchester – A Regeneration Project and Investment Opportunity

Manchester has become one of the UK’s best property markets, with thousands flocking to the city each year to work, study, and play…

Read More →

Manchester named ‘creative capital’ of the UK

For many property investors in the UK’s 2023 buy-to-let market, the standout feature has been the remarkable rental growth.

Read More →

Property Investment Thrives as Rental Prices Increase, Landlords Seeing an Extra Months Rental Income per year

UK house prices have seen a positive trajectory for the third consecutive month, demonstrating resilience despite earlier forecasts of a downturn.

Read More →

Manchester Secures Coveted Spot on The New York Times’ 2024 ’52 Places to Go’ List

For many property investors in the UK’s 2023 buy-to-let market, the standout feature has been the remarkable rental growth.

Read More →

Come talk to our professionals to learn more about the UK property market now!

Learn more about investing in Manchester by downloading our guide today