North hot for buy-to-let investors

Over 72 per cent of industry experts surveyed say that regeneration and investment in northern cities means investors are taking advantage of the increased buy-to-let opportunities and solid capital growth in the ‘New South’. While the south still offers good returns, house prices are higher and the investment can take much longer to pay off.

Northern revival

The north has seen significant investment in regeneration and infrastructure and has quickly become a serious competitor to the south. Whilst most economic activity in the UK has primarily been centred around London, investment in the north is seeing this centre gradually shift. The Commonwealth Games held in 2002, the BBC’s planned move to Manchester and the regeneration of Liverpool as the European Capital of Culture 2008 have all contributed to a positive effect on the area.

As investment and regeneration booms, the consequences for the northern housing market are very encouraging. From buy-to-let investors to first-time buyers looking to choose an up-and-coming hotspot for their first purchase, the area is guaranteed to provide strong returns by means of rental yields and capital growth.

Louis Mann, sales director of Validus, commented: “Buy-to-let investors should keep their eyes on the north. Property prices are still lower than in the south, and for the investor this means a lower ‘ticket price’ to purchase the property which is great for cash flow. Admittedly this has to be weighed against expected lower rents but rental returns are still favourable at 4.7 per cent annually and, encouragingly for the long-term, property prices in the north have room to grow.”

Nick Clark, managing director of the Property Investor and Homebuyer Show North, commented: “The results of our survey show that while London is leading the current property boom, industry experts believe you shouldn’t discount the north which is set to provide excellent returns in the long run. Indeed, many are labeling the north as the ‘New South’.

“With lower house prices and high demand from workers, tourists, students and immigrants, there are plenty of opportunities for shrewd investors who are looking to make money out of property and homebuyers who want to get their first step on the property ladder.”