Property investors in the South may be wondering where their buy-to-let future lies. For months, LandlordBuyer has been monitoring the yield and prospect news from around the country and one thing is evident: there are some head-turning Northern lights.
Consternation surrounding the viability of Southern buy-to-lets started building in the summer of 2023. In August, Sourced Franchise claimed the North of England was outperforming the South for both capital appreciation and rental yields.
On the first point, the property investment platform said during the 12 months between May 2022 and May 2023, the average house price in the North increased by 2.7%. Conversely, the average house price in the South had grown by just 0.8%.
When it came to income, average yields in the North were 4.7%, while the South managed 4.2%. The strongest yields were found in the North West (5.5%) and Yorkshire & Humber (4.9%).
Looking at the stars that shine the brightest, data revealed that the North East has emerged as the buy-to-let capital of Britain. Data from the Office for National Statistics (ONS) found the region saw the highest growth in property prices in the year to August 2023. This growth is attracting investors, with analysis by Cornerstone Tax discovering that 25% of people in the North East plan to invest in the area to generate income for their retirement.
While property price appreciation has been noted in the North East, buying values are still subdued when compared to the South, making it fertile ground for investors. In fact, ONS said that in August 2023, the North East had the lowest average house price of all English regions, at £165,000.
When you combine the cost of buying a property in the North East with the yield, it’s no surprise that landlords are sticking with their Northern investments or considering a move into the region. To illustrate, when questioned by Cornerstone Tax, just 20% of UK landlords admitted that their investment has been profitable 2023. Those in the North East, however, reported better prosperity, with 28% saying their buy-to-let had made them money.
Among Southern landlords who have been hardest hit by rebalancing yields are those with investments in London. In October 2023, a report in The Telegraph detailed how investors in the capital city are increasingly looking North for more lucrative opportunities.
The newspaper found around 66% of London-based buy-to-let investors who invested in property during 2023 did so in other parts of the country. The statistics are stunning. Northern buy-to-lets now make up 24% of all purchases made by London-based landlords, the report said – up from just 1% a decade ago.
The article’s narrative quickly turned to the North East, with Hamptons adding that this region is ripe for investment. The agent upgraded the North East’s yield potential, claiming it posts returns of 9.1%, which is in stark contrast to the 5.6% it is witnessing in London.
The alluring prospect of buying one or even multiple properties in the North East – perhaps even outright – with a modest budget of around £100,000 is still achievable for those who can sell house fast and reinvest elsewhere. If you are a landlord with buy-to-lets South of the M4, LandlordBuyer is in a position to help you shake up your portfolio so it’s less exposed and more Northern focused.
We buy tenanted and vacant properties anywhere in the country for cash, freeing equity and allowing landlords to chase yields in different regions – and quickly! Using LandlordBuyer is often the speediest way of disposing of poorly performing assets when the sales market has stagnated. Plus, there are no estate agent or legal fees to pay – and no need for any viewings - when using us.