Why should investors be heading to the North for the new year
The buy-to-let market is booming. It is benefitting from high rents, cheap financing and strong house prices. But, to maximise your returns it is important to know the best places to locate that hidden gem.
In 2015, property website Rightmove.com warned that the price tag for a house in London could rocket to an average of £1 million. This is all down to high demand, cheap mortgages and a lack of accessible homes.
Unsurprisingly, this is causing potential investors to migrate 'up North'. But it isn't just the extortionate lifestyle in London that is driving people away. Changes to the market mean that it is also strategically prudent to look North for property options. The stamp duty changes means that investors need to focus on the changes to buy-to-let and second homes which will potentially come in to play in April 2016. Savvy investors could reduce the amount they pay under the new stamp duty rates by purchasing lower entry level real estate in the North.
So, along with the lower house prices, high yields, the rise of the Northern Powerhouse and good entry level for investors due to increased stamp duty – the North is becoming a property hotspot for those who wish to expand their property portfolio.
It isn't just general investing becoming more and more appealing in the north, as thousands of students head to universities all over the North of England, investing in student property is also another plus. However, a recent study that sampled 2,000 UK adults by the specialist property company Experience Invest found that only 17 per cent of respondents said they're aware that investing in student property can result in a high yield.
Here, Investment Property expert Dale Anderson from Experience Invest reveals the Top 5 Northern cities in which buy-to-let and student investments are booming:
"Liverpool has always been a high yield place for rental income, offering some of the highest returns in the UK – so it's forever been a safe bet. Expected deliverable supply in Liverpool is the equivalent of 14 per cent of full-time student numbers. Along with this, there is going to be 25,000 purpose built student rooms by 2017, meaning there's going to be lots of potential coming up for investors."
"Manchester is arguably the best place in the North to invest. The city is at the centre of the Northern Powerhouse Scheme. The population is growing year on year meaning there is a big demand for housing from tenants and owners. East and North Manchester have good rental yields and good low price properties. With this being such a vibrant and large city – properties can vary from back to back semis to modern city centre apartments. Not only this, there are also 105,000 students across 4 major universities. The Manchester market is ideally placed for more development, which is set to happen in the next few years."
"The North East is very favourable when it comes to returns, with up to 9 per cent often achieved in central Newcastle Upon Tyne and some of the suburbs, compared to an average 6 per cent nationwide. In some areas, there has even been a 50 per cent increase in rental values due to the massive cultural and business rejuvenation throughout Newcastle. The thriving student population also makes it a great choice. Since 2008, 11,000 student rooms have been granted planning in the city to accommodate its expanding student population. Even with 11,000 rooms under construction or in the pipeline, experts believe that construction will not be able to keep up with the rising demand for student rooms in the city."
"Sheffield has benefitted from heavy rejuvenation over the past 10 years – putting it firmly back on the map. Due to its young population, rental property is being snapped up faster than it can be provided, according to property investment experts. It has a super tram with some of the cheapest fares in the UK, tonnes of shops, bars and a buzzing music scene – making it hugely appealing to the 60,000 students that live there, attending both Sheffield University and Sheffield Hallam."
"Being the third biggest city in the UK, and the biggest city in the North of England – it's no surprise that Leeds is popular among investors. The city has an expanding population and student numbers continue to increase. Just outside of the city Headingly and Hyde Park are mainly populated by students. In the centre of the city, the combination of Victorian terraces and warehouses from the city's industrial past as an important textile and trading town are now mixed with modern apartment blocks and offices. Despite its popularity, the house prices are nowhere near the £1m, £2m, £3m mark, as in London, the stamp duty is still staggeringly low."
For more information on renting in the North and all over the UK, head to www.experienceinvest.com