The North is increasingly attracting investors who would have usually been drawn to the South of England. The northern market is truly flourishing, providing growing yields and equity. This is thanks to the establishment of the Northern Powerhouse, inexpensive investments and a strong rental sector.
Bucking the Trend
The southern market, and in particular London, is going through poor growth due to over-inflation, lack of affordability, tax changes and people deciding not to move home. This has led to the lowest growth in London for five years at 3.5%.
But it isn’t just London that is experiencing a slowing market. A recent report by the Hometrack index – who monitor house prices across the UK – states that the average annual rate of house price growth for the country has decreased from 8.7% in April 2016 to 5.3% in April 2017.
Northern cities are bucking this trend. In a number of cities north of London annual house price growth is rising faster than last year: Manchester has experienced growth at 8.4%; Birmingham at 7.7% and Leicester at 7.7%. Various other northern cities have shown positive increases, such as Edinburgh, Leeds and Liverpool.
Northern Investments Outperforming the South
Yields in the North have also outperformed those seen in the South. Thanks to a wide variety of properties and a strong rental market – due in part to high student numbers – yields are outperforming the UK average, with Salford seeing 7.08%, Manchester 5.79% and Leeds 5.96% in the year until March 2017. These factors aren’t due to change, so this positive trend should continue for the foreseeable future.