Stockton-on-Tees’ lettings market is seeing a significant spike in activity, according to the latest analysis from Zoopla.
The property portal delivered 75% more lettings leads to its agent clients over the last 12 months, making the North East market town the location with the highest increase in rental demand year-on-year across the UK.
Currently, landlords in Stockton-on-Tees are achieving an average yield of 5.8% on two-bedroom homes – 1.5% higher than London and the South East. The national average sits at 4.9%.
This strong yield, coupled with an average house price of just £160,700, is causing a surge in buy-to-let investors shifting their focus from London and the South East to more affordable markets.
In turn, potential tenants are flocking from surrounding areas, with new rental instructions up by 6% over the last year. Zoopla data also revealed that renters are favouring three-bedroom terrace houses in this market, with this type of property receiving the highest numbers of letting and sales leads to agents.
Elizabeth Williams, branch valuer of Pattinson, an estate agency business which has a stronghold in Stockton-on-Tees, comments: “We have seen a significant uptick in buy-to-let investors looking to purchase in Stockton-on-Tees, so much so that we deal with enquiries of this nature on at least a daily basis.”
“Previously, these investors bought properties and flipped them for a profit, but now there is a 3% levy on stamp duty land tax on second homes and yields are stronger here, so letting these properties is a much more attractive prospect.”
She says the popularity of three-bedroom terrace houses is likely due to landlords wanting to attract families rather than young professionals as tenants, as the former offer long-term contracts and a more stable income to the investor.
Andy Marshall, chief commercial officer at Zoopla, adds: “We know that in the current climate many of our agent clients are shifting strategies to position their lettings departments as the beating hearts of their businesses.”
“It is therefore more important than ever to ensure we are delivering on these lettings leads to offer the best value for money to our agents.”
Zoopla analysed the number of leads it delivers to estate agents in over 370 local authorities to identify the areas that are currently experiencing the highest increases in demand from tenants. It compared rental leads delivered between July 2018 to June 2019 with rental leads generated over the same period last year.