Our latest figures suggest that landlords are increasingly likely to invest in properties in the North of England
Paul Fryers is managing director at Zephyr Homeloans
Our latest figures suggest that landlords are increasingly likely to invest in properties in the North of England.
Around 20% of all Zephyr deals now relate to property in either the North West and Yorkshire.
These regions are also now jointly the third most popular for landlords to secure a Zephyr BTL mortgage.
Yorkshire in particular also appears to be attracting a large number of professional landlords, with our figures showing 50% more property purchased through limited companies than by individual landlords in Yorkshire between 2018 and the start of 2022.
We’re seeing a particular interest in Northern cities, including Manchester and Liverpool, perhaps in part influenced by the implementation of the Government’s Places for Growth scheme, which will result in the relocation of 22,000 civil servants out of London by 2030.
The proposals include moving the Department for Digital, Culture, Media, and Sport to Manchester, setting up a second HQ for the Department for Work and Pensions in Leeds (complete with ministerial office) and establishing a Northern Economic Campus in Darlington. According to the 2004 Lyons Review, the arrival of 10 civil service jobs in an area acts as a spur for the creation of about 11 private sector jobs.
Since the announcement of Places for Growth, the government has also been putting a greater emphasis on its broader ‘Levelling Up’ agenda, which may have increased expectations of greater investment in Northern England among landlords who keep an eye on trends that could potentially affect the market.
Numerous new-build residential schemes in Manchester and Liverpool may also have caught some landlords’ eyes. This kind of building programme is proving increasingly popular, with property owners more likely to be mindful of their need to meet Government regulations on EPC certificates and minimum energy standards from 2025.
Landlords may also judge that house prices in the North are simply more cost effective. The average cost of flat in Lewes, in Sussex, for example is £302,670 compared with an average of £146,817 in Liverpool.
Rents are also rising in the North. Data from the latest edition of The Deposit Protection Service’s (The DPS) Rent Index showed that rents increased 6.59% in Yorkshire, 6.54% in the North East and 4.71% in the North West between Q4 2020 and Q4 2021.
Meanwhile rents in London and the South East increased by 4.86% and 4.12% respectively during the same period.
Markets will ebb and flow but one thing is for sure: although like all markets the private rental industry faces challenges, there are some positive signs in the North.