Investors Are Moving Away From London Because The Yield On Property Investment Is Higher In The North

yield on property investment

When you are talking about the UK in terms of the North and the South, it’s like black and white. Whether it is the lifestyle, property market or accents, there is a big difference between North and South. A lot of things differ including the size, economy, and culture, so in terms of property investment you will need to have some knowledge about both sides to make fully informed decision on which location to put your time and money in. So which area has the highest yield on property investment?

The truth is, many London investors have decided to move away from properties in the southern capital into more affordable living and investing areas, generally in the northern regions. This is for a number of reasons and knowing the motives behind this will help you to choose the most profitable area to invest.

This article will give an outline of each end of the stick and compare the returns to help you make an well-versed decision.

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Where To Buy Investment Property? Comparing The South And The North Of England

Understanding the reason why people have moved their interests upwards starts by stating up-to-date facts. By knowing the statistics in the housing market across the UK, you can decide where to buy investment property.

where to buy investment property

The South Experienced House Price Drops

The London housing market is volatile and ever since the Brexit vote to leave the EU, many private investors are thinking twice before investing into the London property market. In fact, property prices in the capital city dropped significantly, giving long-time investors in this area less hope for the future of their London investment properties. A report from Your Move, a large UK Estate Agent, stated that London house prices fell by 15% in the last 12 months.

Areas in London such as Wandsworth experienced dramatic house price dips of more than £100,000 in value over the last year. South London experienced dips that were slightly smaller at around £81,000 and North London saw a 66,000 house price drop in that same 12-month period.

Furthermore, since the buy-to-let stamp duty land tax changes in 2016, there has been a decrease in the number of landlord investments in London. Because the property prices in London have become ridiculously high, investors who have put their faith in the international property investment hotspot have decided that the increased stamp duty is not worth it, especially since there are other expenses incurred such as management costs to consider. On top of this, the yields in London and the South are low, and unless you are a property investment giant with a bottomless money pot, in the long-term it seems that the risks of investing in the South will outweigh the rewards.

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Is It Worth Investing In Property

The North Experienced House Price Increases

For a few years now, it has become more well known that the Northern regions are doing well in the property sector and the divide between the North and South is closing up. Since George Osborne’s visualisation of the Northern Powerhouse came into the limelight, the entire nation has turned their heads, no longer overlooking the Northern cities when it comes to international and national investment. You can read our blog post on The Northern Powerhouse Property Hotspots to get more of an insight into the top areas for Northern property investment.

The North-West of England is being referred to as the ‘second capital’ because it has overtaken London as the fastest-growing property market in the UK. Blackburn is in the lead in terms of house price growth, with an average increase of 16.4% over the last 12 months. This means that over the last year, the North experienced a house price growth that was 1.4% more than the South’s dramatic house price dip, further supporting the fact that growth in the North has a lot of potential that investors shouldn’t miss out on.

Additional house price increases in the North include areas such as Warrington (10.3% increase), Merseyside (8% increase), and Greater Manchester (4.3% increase).

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Is It Worth Investing In Property In The Northern Regions?

Due to the oversaturation of investors in London as well as the greatly unpredictable property market, investors are venturing out to look for a more sustainable area. This change was also driven by London’s rise in rents and property prices as well as financially squeezed councils and restricting legislations.

So, is it worth investing in property in the North? We definitely think so! Over the years, our property experts have noticed a gradual shift and now more than ever, the North has proved to be a more sustainable, lucrative and reliable area for property investment in terms of growth, yields and profits. The lower house prices, higher rental yields and steady capital growth that investors are experiencing now in the North compared to London all contributes to the investment potential of the Northern regions.

We believe in investing in property in the North is the most profitable option for our clients, so we make this option available to everyone, no matter where they are based. This is possible with our fully-managed property investment service. We give our clients the easy option to invest and receive their assured fixed yields without having to deal with the management, void periods, tenant sourcing and ongoing costs associated with it.

This is due to our strong relationship with the developers we work with, giving us the buying power to offer property investments at below market value price, with assured NET yields, and buy-back options with capital appreciation of at least 10%, as well as the management costs covered. All our clients need to do is receive their rental income, and their capital appreciation upon selling when the contract is over.

Some popular areas chosen by ex-London investors included Manchester, Newcastle, Sheffield, and Liverpool.

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Look Outside Of London For Higher Yields On Property Investments

Summary

Sterling Woodrow handpick the developments that offer our clients the highest returns. For this reason, we look in areas across the UK and outside of London. A lot of regeneration has been happening in the North of England, as well as new transport links connecting areas such as Manchester, Birmingham and Leeds to London in less than an hour’s commute.

We see a lot of potential in these areas and with more people looking to move away from London, the demand is higher than ever for residential housing. We see this as an amazing opportunity for investment in many sectors including buy-to-let investments and student property investment.

At Sterling Woodrow, we pride ourselves on helping new property investors get a solid start in the market and are happy to speak to you about your long-term goals and ambitions in property investment.

We also work with experienced investors to help them increase the value and profitability of their portfolios.

To book your complimentary property investment consultation with one of our senior portfolio managers simply click the button below and complete the short form and we will call you back at the appropriate time.

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