Why property investors are heading North

Steve Lumley·14 July 2021·4 min read
Why property investors are heading North

Property investors are increasingly heading north for their investments because that's where future property hotspots will be, one firm is predicting.

The managing director of Fabrik Invest, Dale Anderson, says the time has come for more investors to look to the north.

Mr Anderson said: "We have seen a big shift in investor interest in recent years from south to north.

"That's because northern cities deliver greater potential for capital growth with sustained, strong tenant demand and better yields."

He added: "The Northern Powerhouse initiative has opened investors' eyes to the north's potential and, at the same time, many of the 'best places to live' type of accolades are for northern cities.

"Add in the fact that working from home has cut family ties with specific locations means people can head north for better value - and there is a case for the north over the coming decade."

Pushing house prices up

The firm also says that several cities are seeing extensive redevelopment work taking place, including Liverpool and Manchester, which is pushing house prices up and creating new areas to live, play and work in for investors and owner-occupiers alike.

Recent data from real estate firm Savills has also placed the north at the top for projected house price rises over the next five years.

They say that property prices in the North West will rise by 28.8% from this year to 2025.

That region is followed by Yorkshire and Humber with 28.2%, and the average house price rise nationally over the same period is 21.1%.

Savills is also predicting that the average house price in London, the South East, as well as in the South West and the East of England, will rise at below the average with prices increasing by between 12.6% and 18.7%.

The managing director of Accommodation for Students, Simon Thompson, said: "There's no doubt that investors are increasingly taking an interest in the north because of house prices for better yields.

"However, the location and type of property that tenants want to rent is the most important aspect for landlords and property investors, but it does appear that some areas in the north will become investment hotspots."

Landlords say green issues are important

Meanwhile, one lender says that landlords are increasingly saying that green issues are important to them when investing in new BTL homes.

A survey has been carried out by Hodge Bank which reveals that 82% of investors and landlords state that energy efficiency is in their top three considerations when looking at an investment property.

The firm's head of investment finance, Andy Button, said: "The buy to let market is buoyant right now with demand growing throughout the pandemic and it's interesting to see how landlord priorities are changing."

He added that while the potential for capital growth and rental yields are the top priorities for investors and landlords, their research reflects a changing sentiment in the market with sustainability and green credentials becoming more important.