Whether you’re a seasoned pro or just starting on your Buy-to-Let journey, you’ll likely be paying close attention to UK house prices.
With headlines reporting a dip in property values, it’s essential to understand that the available data offers an opportunity to pinpoint the most stable regional markets for investment and long-term growth potential.
Regional Property Values
Recently, Sourced Franchise conducted a study to compare the annual changes in house prices, rental values, and rental yields across all regions of England to identify the region with the strongest housing market performance.
Their data has shown that the North has been outperforming the South in terms of both capital appreciation and rental yields, making it a prime opportunity for investors.
In May 2022, the average house price in the North was £205,875. Fast forward to May 2023, and it has increased to £211,392, marking an impressive annual growth of 2.7%.
On the other hand, the average price in the South has only seen a marginal increase, growing from £385,719 to £388,917, an annual change of just 0.8%.
What’s even more fascinating is that the top four performing regions over the past year have all been in the North. The North West, North East, Yorkshire and the Humber, and the East Midlands have seen substantial growth in property prices, far surpassing their Southern counterparts.
In comparison, the best-performing Southern region, the South East, has experienced growth of just 1.5%.
Based on this data, it’s clear that the North is the place for investors seeking lucrative returns in the property market.
Investment Returns Comparison: North vs South
When it comes to investment returns, the North of England is leaving the South in its wake.
In terms of rental yields, the North has seen a significant increase of 8.7%, with the average rent value rising from £759 per month to £824.
Meanwhile, the South has also experienced growth, but at a slightly higher rate of 9.5%, with average rent values going from £1,255 per month to £1,374.
Looking at the strongest regional growth, London takes the top spot with an impressive 12.5% increase in rental values. The West Midlands follows closely behind with growth of 10.8%, followed by the South East at 9.7%.
The North West and the East of England also show strong growth, recording increases of 9.5% and 8.9% respectively.
Buy-to-Let Yields
In terms of Buy-to-Let yields, the North is leading the way with an average yield of 4.7%, while the South stands at 4.2%.
The North West takes the crown for the strongest yields by region, boasting an impressive 5.5%. Yorkshire & Humber (4.9%), London (4.7%), and the North East (4.7%) follow closely behind. The West Midlands rounds out the list with a strong yield of 4.4%.
With higher rental yields and strong growth in both rental values and house prices, the North of England proves to be the ideal destination for investors seeking impressive returns on their investment.
Factors Driving the Northern Housing Market’s Growth
The Northern housing market’s growth can be attributed to several factors that make it an attractive investment opportunity.
Firstly, the affordability of properties in the North compared to the South is a significant driving force. Investors can purchase properties at lower price points, allowing them to enter the market with a lower initial investment. This affordability factor, coupled with the rising demand for housing in the North, creates a strong market for investors to capitalise on.
Another key factor driving the growth is the investment in infrastructure and regeneration projects in Northern cities. The Northern Powerhouse initiative has led to increased investment in transportation, education, and business opportunities, which in turn has stimulated economic growth and attracted more people to the region. This growth in population and economic activity has created a higher demand for housing, leading to increased property prices and rental yields.
Additionally, the North’s thriving rental market is contributing to its growth. Many people, particularly young professionals and students, are choosing to rent rather than buy property. This trend, combined with a shortage of rental properties in certain areas, has resulted in strong rental demand and increased rental yields for investors.
Overall, the combination of affordability, investment in infrastructure, and a thriving rental market are driving the growth of the Northern housing market. Investors who recognise these factors can take advantage of the opportunities in the North and achieve impressive returns on their investment.
Read more: What makes Northern Property Markets so Appealing to Investors?
Buy-to-Let property in the North
Investing in Northern Buy-to-Let properties also offers a good option for portfolio diversification.
Key cities like Manchester, Liverpool, and Preston have established themselves as stable investment locations, attracting both domestic and international investors. These cities provide a well-known and reliable investment opportunity with good long-term growth potential.
The Northern housing market’s strong resales market offers flexibility to investors. Should they wish to exit the investment, there is a demand for properties in the North, making it easier to sell and potentially achieve a good return on investment.
Fabrik Property Group is here to help property investors navigate the Northern housing market with fully managed Buy-to-Let properties. Our team sources carefully selected investments in property hotspots across the North, offering investors the opportunity to expand their portfolio and benefit from the region’s potential for growth.
For those looking to get in at the earliest stage of an investment, we also offer off-plan options with early investor incentives. This means you can take advantage of the potential capital appreciation that comes with buying at the earliest stage of development.
Click the link to view our available Buy-to-Let properties in the North.
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