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Graham Davidson, Managing Director of Sequre Property Investment, comments on the divide between the property market in the North and South.

Investment in buy-to-let property in the North of England is experiencing a significant resurgence at present. At the same time, the latest ‘vibrancy index’ from Experian has revealed that Manchester is now a more attractive place to live than London.

Both experienced and novice investors are looking to the North thanks to market conditions remaining attractive, interest rates remaining low and the stock markets remaining unpredictable. Buy why are more investors turning to the North? And is there still a market for investors in the South? Below are several key factors surrounding the North/South divide:

High Yields vs. Capital Growth

As prices in the South of England continue to rise and prices in the North are showing signs of growth, there’s never been a more important time for investors to assess their financial goals before making a decision on where to invest.

The South offers a great opportunity for capital growth, whilst the North offers a high level of income thanks to its affordability and high yields. The key element underpinning investment in both locations is that demand for rental property is sustained.

Rental yields are still far higher than the interest rates currently offered by banks – with a typical buy to let investment in London producing yields of 5-6%, and yields as high as 9-10% in the North.

The Housing Bubble

The issue of rising house prices in the South has dominated the headlines recently, with increasing fears that the UK may soon experience another housing bubble. However, these fears are very much dependent on which area of the UK is being considered.

As overseas investors continue to dominate in London, the chances of a housing bubble in the South seem inevitable. Meanwhile, the rest of the UK looks set to see consistent and controlled growth, as more first time buyers are able to take their first step onto the property ladder.

The Future…

A key rule of buy to let investment is to consider future demand and growth in the area in which you choose to invest. London has historically benefitted from continual investment and growth, however the economy in the North of England has seen fantastic growth in recent years. This is due in part to developments such as MediaCityUK – an investment that saw Salford’s property market rise faster than anywhere else outside London in 2012.

Whilst London will always have the unique appeal of being the capital of England and a great place to live, the exceptional demand we are seeing for well-located new build residential properties in the North is a valid testament to its resurgence.

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