Midlands and North attractive for buy-to-let

Midlands and Northern England attractive for BTL

Latest data on house prices reinforces the chain of thought that the Midlands and North of England have gained gravitas as appealing regions for buy-to-let landlords, offering greater scope for growth than other areas.

Whilst overall the UK housing market is flat, with just a 0.1% month on month rise nationally in August, there are marked differences around the country.

In the East Midlands, house prices have increased by 6.5% since August 2016, while the West Midlands was also reported to have fared well in the data supplied by Home.co.uk.
In London however, with fewer properties available for sale and supply falling 4% year on year, prices have risen by only 0.4% since last August.

Shorter term, Wales and the South West have seen house prices outpace the national average over the past six months, with rents also increasing in both areas.

Doug Shephard, director at Home.co.uk commented:

Investment remains a key driver in the current market despite the increased tax burden for landlords, but such investment is focused upon yield, both rent and potential capital gains. Hence, buy-to-let investors are looking outside of the overbought regions of London and the South East, where yields are lower and overinvestment has created oversupply of properties for rent.

“The Midlands and the North are seemingly now more attractive options for buy to let and, looking at home price appreciation over the last five years, these areas have much more room for growth than London, the East of England and the South East.

Andrew Turner, chief executive at Commercial Trust said,

The latest house price figures certainly reflect the heightened costs associated with London and the South.

“Property prices in this half of the country have traditionally always been higher, given the proximity to the capital. As transport networks improved, the desire to find more affordable housing in reach of London pushed buyers further out.

“In the meantime, there has been plenty of scope for house price growth elsewhere in the country and it is only natural that buy-to-let landlords, looking for higher rental yields would look further afield.

“I would expect the focus in the Midlands and North to radiate from cities such as Birmingham, Liverpool and Manchester, as these areas are both populous and primary business hubs, which make for prime buy-to-let opportunities. For the same reasons Edinburgh and Glasgow in Scotland are also enjoying success.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.