In recent years, the North of England has become increasingly attractive to buy-to-let investors. This shift is due to a combination of affordable property prices, strong rental demand, and higher yields compared to other regions. Additionally, the rise in bridging and development finance options has facilitated more investment in these areas.
Affordable Property Prices and Strong Rental Yields
One of the main reasons investors are drawn to the North is the affordability of properties. For example, in Sunderland, the average property price is approximately £167,338, which is significantly lower than the average in Greater London, where prices exceed £700,000.
This lower entry cost allows investors to achieve higher rental yields. In Sunderland’s city centre (SR1), yields can reach up to 10.1%, while areas like Middlesbrough and Darlington offer yields around 9% .
High Tenant Demand
Cities such as Manchester, Leeds, and Sheffield have large student populations and a growing number of young professionals, leading to strong tenant demand. This demand ensures that rental properties are occupied quickly, reducing vacancy periods and providing steady rental income for landlords.
Regeneration and Infrastructure Projects
Significant investments are being made in northern cities, enhancing their appeal to both tenants and investors.
For instance, Manchester’s £4 billion Mayfield regeneration project and Leeds’ South Bank development are transforming these cities, creating new jobs and improving infrastructure. These developments not only attract more residents but also increase property values over time.
Increase in Bridging and Development Finance
The surge in property investment in the North has been supported by the rise in bridging finance loans and development finance options. Bridging finance provides short-term loans that help investors quickly purchase properties, especially those requiring renovation.
Development finance, on the other hand, offers funding for property development projects, from small refurbishments to large-scale constructions. These financing options have enabled investors to undertake projects that were previously out of reach, contributing to the revitalization of many northern areas.
Conclusion
The North of England presents a compelling opportunity for buy-to-let investors. With affordable property prices, high rental yields, strong tenant demand, and increased access to bridging and development finance, the region offers the potential for profitable investments. As regeneration projects continue to transform northern cities, this trend is likely to persist, making the North an attractive option for both new and seasoned property investors.