Property Investors Head to the UK’s North East for Better Yields
Published by Magnate Assets on
May 1, 2023
Investors looking for high rental yields have driven higher property prices in the Northeast. Data from TwentyCi showed that sales agreed in the first three months of the year were up 7pc compared to the start of 2019, the strongest performance in the country. This contrasts with the 7.5pc average decline in sakes agreed transactions recorded for the rest of Britain, as higher mortgage rates and inflation affect the market.
Colin Bradshaw, chief executive of TwentyCi, suggests that landlords making new investments are supporting the local market of the Northeast. Rental instructions are up 12pc in the Northeast, compared to 6pc nationally. This has cemented the North East's status as the buy-to-let investment capital of Britain, with its low house prices and relatively high rents attracting landlords.
Analysis from Hamptons estate agents reveals that in the year to date, buy-to-let investors made up 26pc of all purchases in the Northeast- double the national average of 12pc. Max Armstrong, director of Northeast Property Investment, has seen a sharp increase in inquiries from buy-to-let investors since the start of the year, as people look for ways to protect against inflation. Newcastle was the strongest performing city, with sales up 6.6pc compared to the start of 2019.
The Northeast offers the best rental yields in the country, with yields averaging 8.4pc before tax, far higher than the average 6.4pc rate. In London and the Southeast, rental yields are around 5.5pc, and investors made up just one in 10 purchases.
Nationally, the number of sales transactions are down 9pc compared to the start of 2019. However, the inner London market is an exception, with agreed sales up 5.8pc compared to the start of 2019. This is largely due to an influx of overseas purchasers drawn in by a favourable exchange rate, along with the reversal of pandemic trends.