Landlords Look North For Better Returns

AFS Team·2 May 2019·4 min read
Landlords Look North For Better Returns

Landlords Look North For Better Returns

Investor landlords in the south of England are looking North for better returns, one index reveals.

The findings from Your Move highlight that property yields in the North continue to outstrip other regions.

According to the latest Your Move Rental Tracker, properties in the North East returned 5% and in the North West they returned 4.8%.

In comparison, the average yield for investment property in London is just 3.2% and in the South West and South East, it is 3.3%.

Also, the only region where yields fell between March and February was Wales with the average return now being 4.5%.

The average yield for England and Wales was 4.3% in March, which is down from 4.4% a year ago.

'Yields continue performing strongly'

Martyn Alderton, Your Move's national lettings director, said: "Yields continue performing strongly with only one region having lower returns than in February.

"We are seeing landlords in the south of England look further away for rental opportunities with Northern properties delivering strongly on yields."

He says that the growth in rental markets has led to yield hotspots in northern cities for landlords, including Liverpool and Manchester.

London's buy to let sector shows signs of life

Meanwhile, it's been revealed that the buy to let sector in London is showing signs of life, despite the battering it has taken over the last 12 months.

The figures from Commercial Trust, a buy to let broker, reveal that for the first quarter of this year, the number of mortgage applications for the capital increased by 4% over the last quarter of 2018.

This means that London is now the leading buy to let region for BTL business applications, taking 15.8% of all business followed by the South East with 14.5%.

'A buyer's market for buy to let'

Commercial trust's chief executive, Andrew Turner, said: "The effects of Brexit have been felt in London and house price growth has created a buyer's market for buy to let.

"Our figures show the importance of the South East and London within buy to let and these regions contributed more than 30% of BTL purchase applications, up from the last quarter of 2018's figure of 26%."

He pointed out that there's also increased activity in the North West and East Anglia and with Brexit now being pushed back to October and an environment of low interest rates has encouraged investors to look again at buy to let.