When it comes to property investment, an increasing number of people are turning their backs on London and the previously desirable, affluent South. Instead, people are casting their gazes Northwards. The property market in London has been diminishing in recent years, with high house prices and low rental yields losing the attention of both UK and overseas investors. The potential of a further slump as uncertainty over Brexit continues means that hedging all your capital on the Capital isn’t a wise thing to do. Instead, if you’re considering making a buy-to-let investment in the UK, it’s time to look further afield. With this in mind, here are 4 IDEAL benefits of property investment in the U.K’s North.
HIGH RENTAL YIELDS
Northern cities like Liverpool, Manchester and Leeds boast some of the most impressive rental yields in the whole of the UK. Certain postcodes in Liverpool have rental yields that reach highs of 11.79%, with the city’s average standing at 5.05% whilst London’s averages just 3.05%. Manchester rental yields are an average of 5.55%, and Leeds follows behind this at 4.29%. Rising rental costs and low property prices in northern cities are the reason behind these attractive yields, and with rents in Liverpool expected to grow further, things are looking promising both now and in the future. Property investment companies like RW Invest offer opportunities in Liverpool and Manchester with yields as high as 8 and 9%.
House prices are notoriously high in the South compared to up North. The average house price in London comes to around £483,400, whereas in Liverpool the average price stands at £121,00 and £167,700 in Manchester. To put the affordability of northern property into perspective, it’s worth comparing what you could buy for the same price in the North compared to in London. In London, for instance, you could buy a two-bedroom apartment for £500,000, whilst in Liverpool, you could purchase a spacious six bedroom house with a garden for the same price. Not only is property more affordable to buy in cities like Liverpool and Manchester, but it’s also cheaper to rent than in other areas of the UK, resulting in a high demand for properties. One market for which property in the North is in high demand is the student accommodation sector, with the red brick university towns of Liverpool and Manchester attracting hundreds of thousands of students each year.
Seeing as wages are lower in the North of England, the inevitable cost of renovating a newly purchased property is going to be cheaper too, both in terms of labour and raw materials. So if you’re in the buy-to-let game, and want to make your property appealing to a certain demographic, then this will be an easier ask in the northern regions of the U.K.
The North is already home to some of the most innovative and exciting cities in the UK, but in recent years, new regeneration projects are leading to predictions for an even higher level of capital growth. The Northern Powerhouse is an initiative that’s working towards the transformation and regeneration of the North’s key cities. Regeneration projects planned under this initiative are set to give the economy of cities like Liverpool and Manchester a notable boost, offering property investors a lot of potential when it comes to capital growth. New developments include St Johns, a new Manchester city-centre neighbourhood that will create a number of new homes, workplaces, and leisure and shopping attractions. Other regeneration plans will see Liverpool’s waterfront being transformed into the £5.5 billion Liverpool Waters scheme, set to bring plenty of new interest and capital growth to the city and its property prices. Seeing as this is George Osborne’s baby, however, we’d advise against investing solely on the basis of our final point. The man has a history of broken promises and inept decisions.