The Northern Powerhouse continues to have the desired effect of regenerating major northern UK cities. As a result of this, investors looking for excellent Buy-To-Lets delivering on capital growth and rental returns are turning to these northern hotspots.
IP Global’s latest report has listed the following as the best UK northern property hotspots-
The North West of England in general is a prime property hotspot and Liverpool sits right at the heart of all the regeneration the region is experiencing. £5.5 billion has gone into the city centre alone in terms of rejuvenating the cities infrastructure, transport links and amenities. This money has trickled out into surrounding areas like Bootle and Birkenhead which combine excellent rental yields with capital appreciation- the L7 postcode alone is bringing in average rental returns of a huge 12.63%.
House prices in Liverpool have risen by 2.4% over the last year and monthly rents have risen by 5.2% over the same time period to £765. Properties in the private sector are becoming more and more popular with landlords with 26% of all homes built last year being bought by investors. This just goes to show the city is proving popular with those looking to capitalise with Liverpool set to become a true international city in the upcoming years.
Forming part of the North West with Liverpool, Manchester is also pinned by IP Global’s report as a major property hotspot. JLL predicts rental growth to hit 16.5% over the next four years, average yields in the city are currently around 7%, with properties priced at an average £182,630 – a 10.4% rise over the past year according to the figures.
Graham Davidson, managing director at Sequre Property Investment, said: “Investors who continue to chase capital growth in the south rather than switching to the north-west may find themselves struggling not only to break even on rental yields, but to make any capital growth profit.”
The prospect of HS2 has played a massive role in Birmingham’s status as a UK property hotspot. Many major companies and businesses have relocated there, HSBC and Deutsche Bank being two, and as such demand for property here is incredibly high. Here, yields according to IP Global are 6.2% annually, while an average property can be bought for £200,430, which is 8.9% higher than last year.
New proposed metrolinks running in the city centre easily links it to the HS2 station and Birmingham International Airport contribute to the major regeneration happening. With big works being done to Birmingham New Street station as well, many investors are eyeing up off-plan developments at the heart of all this with huge capital appreciation expected in the future.
The Birmingham area is set to be transformed for the 2022 Commonwealth Games, so investors who buy now will be set to benefit from this added investment as well.
IP Global’s report shows that Leeds is struggling big time to meet the ever-growing demand for property. 90,000 new homes are needed by 2021 but there are only 60,000 in the pipeline. This shortfall is only set to bump up prices even further in Leeds with the city already rising by 4% over the last year. Rental growth is expected to rise by 18.8% by 2022 as well according to research.
Yields of 6.8% can be achieved in the area, with average homes costing £196,720 and rents fetching £947 a month.
Hamish Pound, the head of investment at IP Global, said: “We advise investors to focus on supply and demand because an imbalance here is likely to provide the greatest gains.”
A common feature of all these major cities is the fact they are all big student/university towns. This only serves to increase the demand further as more and more flock to these hotspots to study and live there. Prices can only go up further because of the supply struggling to meet this sustainable growing demand.
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