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Number of UK buy-to-let landlords has increased by 49% in five years

The number of UK buy-to-let landlords has risen 49% in the last five years to an all-time high of 2.7 million, research from ludlowthompson estate agents found.

The residential market has stayed relatively strong during the coronavirus pandemic, though the commercial property market has fared poorly, as 54% of tenants have held discussions with their landlords about taking a rent holiday.

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Stephen Ludlow, chairman of ludlowthompson, said: “The buy-to-let market has continued to provide a reliable return on investment for landlords, even during the worst of the pandemic when other forms of investments went through a period of intense volatility.”

“The historic resilience of residential property means many private investors are still looking to add to their holdings, particularly before March 2021 when the stamp duty holiday ends.”

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“We would advise existing and prospective landlords to consider re-purposing their properties to meet the changing needs of tenants.

“With people spending more time at home, having extra space both in and outdoors has become more important than ever. Outdoor areas and home offices are both in very high in demand, as is accessibility to high-speed WiFi.”

BY RYAN BEMBRIDGE

Source: Property Wire

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Manchester is top UK location for buy-to-let investment

Manchester has been revealed as the top location for buy-to-let investment, according to Aldermore’s Buy-to-Let City Tracker.

Cambridge was noted as the second best location for BTL investment and London as the third.

The tracker analysed 50 cities from across the UK and assessed the best location based on average total rent, the best short-term returns through yield, long-term return through house price growth over the past decade, the lowest number of vacancies as a proportion of total housing stock, and percentage of the city population in the rental market.

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According to the lender, significant investment in commercial and residential developments over the past five years in Manchester contributed to it being the top BTL investment location.

The cities main selling points for private landlords include rental returns and long-term house price growth, but more importantly it has one of the biggest rental markets in the UK, with 31% of Manchester’s population being private renters.

In addition, it has low vacancy rates, above average rental prices and property prices increased by 4.1% annually.

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Jon Cooper, head of mortgage distribution at Aldermore, said: “There has been a high level of uncertainty for landlords since the COVID-19 outbreak and they have had to continuously adapt to a raft of challenges but, with so many working from home right now, it reinforces the importance of a robust and diverse private rented sector.

“The changing needs of renters, whether to move to a new location or a different type of property to fit flexible working demands, has created investment opportunities for landlords.

“The private rented sector is vital to the economy right now and its recovery from the pandemic so landlords should seek portfolio advice from their lenders to see how they can look at new ways to support the sector.”

By Jake Carter

Source: Mortgage Introducer

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Rental Market Buoyant Except In London

Rents in London have fallen during the Coronavirus pandemic, property portal Zoopla has reported. However, London is the exception and rents risen in a buoyant rental market across the UK as a whole, it said.

‘Average rents in London have fallen by 5.2 per cent over the last 12 months, reaching levels last seen in 2014’, Zoopla found. It puts this down to ‘new working patterns and lack of tourism during pandemic’.

In contrast, rents increased outside London by 1.7 per cent and rental has increased by a fifth over last year – strong demand that is being driven by a squeeze on lending to potential first-time buyers, said Zoopla.

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‘At the same time, supply remains constrained with levels of investment in buy to let still reduced following the changes to Stamp Duty (the additional 3 per cent surcharge on second properties) and the wider tax regime introduced from 2016 onwards’.

Renters are showing increasing interest in larger properties, especially those that may have access to outside space.

‘The search for space, first seen in the sales market, is now being firmly replicated by renters. Zoopla’s top searches for rental properties include the terms gardens, parking, garages, balconies and pets, reflecting a need for outdoor space and freedom necessary to cope with lockdown. There is also evidence that while the market as a whole is moving more quickly, the market for rented houses is moving more quickly than that for rented flats, reflecting this desire for more space among renters’.

‘For most of the UK, the demand/supply gap is underpinning moderate levels of rental growth’, said Zoopla head of research Gráinne Gilmore.

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‘The split in the rental market caused by COVID-19 has now crystallised and we are seeing the two-speed market firmly entrenched.

‘We haven’t seen the exodus of students from cities and, as more people are staying in the rental market given the squeeze on mortgage lending, higher levels of demand will continue to underpin rents. At the same time however, muted earnings growth will start to limit the headroom for rental growth in some markets.

‘The search for additional space, both indoor and outdoor, within the rental sector is also set to continue as the country goes through additional periods of lockdown’

Source: Residential Landlord

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More landlords look to expand outside London and the South East

One in 10 landlords plan to purchase buy-to-let properties this year, up from 3% at the end last year, Source Business research shows.

The rise in landlord confidence and a change in tenant priorities following the lockdowns is leading investors to a move away from London and the South East, to less built-up areas.

Increasingly tenants want greater home working space and leisure time, resulting into a spike in demand for larger properties.

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Mish Liyanage, managing director of The Mistoria Group, said: “We are seeing a rise in professional landlords looking to acquire affordable terraced properties with gardens and apartments in the North West. Lower prices, high yields, expanding population and Northern Power house initiative/HS2 have contributed to this interest.

“A significant proportion of the professional landlords that we work with are located in the Midlands and the South, but want to invest in the North West, because of the attractive property prices, high yields and occupancy rates. Many investors are moving away from London and the South East and are searching for regions that give them exceptional returns.”

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At the end of 2019, 82% of landlords claimed that they had no plans to acquire another property in 2020, while just 3% were intending to add more than a single property to their portfolio.

Soon after the stamp duty holiday was implemented, 10% of landlords said they are now planning to purchase more properties and build on their portfolio, while just 5% said they had any intention to sell any existing properties.

BY RYAN BEMBRIDGE

Source: Property Wire

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COVID-19 Impact on the Buy to Let Market

Due to the COVID-19 health pandemic, the UK is in a recession and many industries have been heavily impacted by lockdown restrictions and other factors that have prevented them from being able to operate as usual. The UK property market has seen some strange results, with house prices rising to an all-time high.

With Government initiatives such as the stamp duty holiday in place to help keep the property industry going, in September 2020, mortgage applications reached the highest rate they had been in 12 years.

However, property experts are predicting an imminent crash, particularly when more job redundancies take place, with an already rapidly increasing unemployment rate in the UK.

How is Coronavirus affecting the Buy to Let market?

It has been an unusual time for BTL Landlords and property owners. After facing big changes to tax relief changes over the last few years and also the requirement for capital gains tax bills to be paid within 30 days, they had already seen a lot of change.

However, the impact of COVID-19 has shaken up the UK property market even more. As part of the initial lockdown restrictions, property viewings were unable to take place and house moves not allowed. This naturally had a big impact on Landlords that were in the process of finding tenants.

In addition to this, the Government protected existing tenants by introducing an eviction ban which lasted for six months. This ban put many landlords into a very difficult situation where they were unable to take legal action against tenants that were unable to pay their rent, or who had broken the terms in their rental agreement in another way.

The ban was lifted on 20 September 2020 but landlords were told they must give tenants six months’ notice for any eviction. This has led to significant financial losses for many landlords who are losing out on rental income.

The Government also protected tenants by introducing rental payment holidays for tenants that were financially affected by the health pandemic.

Support for Buy to Let Landlords

While the Government prioritised the protection of tenants in these moves, they did also provide some measures to assist landlords. To help to deal with the financial impact of the tenant rent holiday, landlords were able to request mortgage payment holidays. However, this did not help landlords who owned the property outright and did not have a mortgage on the property.

A YouGov poll recently revealed that 22% of private landlord in England have lost rental income as a result of the COVID-19 pandemic. The average loss was between £751 and £1,000 and there could still be a longer-term financial impact as the UK faces prolonged knock-on effects from COVID-19.

The current challenges Buy to Let Landlords face

The furlough scheme helped many tenants to keep up with their rent payments but with the scheme ending at the end of October and support packages only expected for businesses that are forced to close, many tenants will no longer be able to afford rented accommodation if their employer is forced to make them redundant.

The pandemic is affecting different areas of the country and different types of landlords in a variety of ways. For example, landlords who are renting to students are already seeing the impact of universities moving over to online learning or students choosing not to live in rented property while the pandemic continues.

There has also been a reduction in overseas students, who have been restricted by travel rules that would normally be looking to live in rented accommodation, so the current situation with university students is having a big impact on existing landlords who rent to students.

Many of these Buy to Let Landlords who have multiple properties in student areas that have been unable to fill their properties have had to adapt and change their tenant type. However, this itself can be costly, as the accommodation expectations of a young professional is usually going to be a bit higher than the expectations of students, so BTL Landlords are facing costs to give properties a refurb to raise the standards.

In areas where there have been stricter local lockdown restrictions, there is a bigger impact on jobs, so Buy to Let Landlords with properties in these hard-hit areas will face more challenges than those with properties in areas less affected.

Some BTL Landlords have made the decision to sell their property while the house prices are so high but this has not been possible for those landlords with tenants that they are unable to get to move out of the property.

What will happen to the Buy to Let market over the next 12-18 months?

While the current situation can feel very negative as a BTL Landlord or property investor, this situation will change and there will be brighter times ahead. With house prices being so high right now, it is not necessarily a good time to buy properties on the open market.

What we are likely to see however, is that there will be an increase in repossessions at some point in the future, with some properties going to auction and being available at good values. This of course represents a good opportunity for investors looking for a Buy to Let property without paying the current high property prices.

Buy to Let Opportunities when the housing crash happens

Property experts are anticipating a housing crash in the next 12- 18 months, and while there are differing predictions for the date this will happen, most predictions are falling within the 12-18 month time period.

What this means is that property investors looking to buy cheap properties and rent them out will be able to buy at a time when prices are much lower than usual. So, in the time leading up to this, these prospective landlords should be using their time wisely, to work out the best areas to buy property in and to factor into account the changes that COVID-19 has brought to the Buy to Let market. For example, the reduced demand for student accommodation and higher unemployment rates in the areas worst impacted by the pandemic.

What is happening to Buy to Let Mortgage rates?

In April, just after the first lockdown was imposed, the number of Buy to Let mortgage products fell considerably. The UK base rate now sits at 0.10%, meaning that interest rates for loans including mortgages are very attractive right now. However, after a very low dip in rates in July, mortgage rates have been increasing.

Research shows that rates have fallen for borrowers with existing investment properties, with the average two-year fixed rate at 75% reducing from 2.34% to 2.17% over the last 12 months.

These lower rates also present an opportunity for BTL Landlords to release some equity from their property or to benefit from re-mortgaging to secure a lower interest rate and therefore reduce their monthly mortgage repayment. There are definitely some good Buy to Let mortgage rates available and a broker can help you to find them.

Is Buy to Let still worth investing in?

Landlords are still able to make a good profit on renting properties and according to the Office of National Statistics private rental prices paid by tenants has increased by 1.5% in the 12 months up to August 2020. So, for those landlords who have not encountered the problems with tenants not paying rent, or not being able to fill student accommodation, this year is fairly positive from a rental price point of view.

Some property rental experts are predicting that there will be high demand for rental properties for the foreseeable future, due to the fact that many people will not be able to buy their own property. Therefore, BTL Landlords will be able to continue to make enough money to make it worthwhile doing.

For people who are considering getting into the Buy to Let industry for the first time, waiting for house prices to reduce and then taking advantage of favourable interest rates will provide a really good business opportunity.

When you are looking for the best Buy to Let interest rates, it is a good idea to use a specialist Buy to Let mortgage broker to help you to find the best deals available. When you take out a Buy to Let mortgage, the offer you receive will take into account how much rental income it is expected that the property will generate for you. So, if rental prices do continue to rise, this should enable you to get a Buy to Let mortgage offer that allows you to buy a property in an area where there should be high tenant demand.

Using a whole-of-market Buy to Let mortgage broker will give you access to some of the best Buy to Let mortgage deals available, many of which will not be available direct to borrower. Many brokers, such as UK Mortgage Broker have exclusive deals that will help you to keep mortgage payments to a minimum and therefore enable you to make more profit through renting a property out.

Another benefit of using a specialist BTL broker is that they can find you the maximum loan-to-value deals, which are ideal if you do not have a large amount of deposit to put down against the property. Find out more about the benefits using of a Buy to Let mortgage broker.

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Year-on-year yield strengthens in majority of UK regions

Rental yields have been strengthening in a majority of UK regions in Q3 according to the latest buy-to-let rental barometer.

The barometer shows rental yields on residential buy-to-let properties were 6.4% across England, up 0.4% from the 6% achieved in the third quarter of 2019.

The North East of England recorded the top rental yield regional figure for the quarter, up 2% year-on-year to 8.8%, whilst only the North West and the East Midlands showed slight drops in rental yields.

Last quarter only three regions posted positive rental yields over the period however seven regions, including the North East, Yorkshire and Humberside and the West Midlands, all posted increases.

Fleet said the overall data showed a more positive picture than three months ago, with a greater number of transactions and rental valuations “showing the strength of the private rental sector during the summer and through into autumn”.

The barometer highlighted the impact COVID-19 may potentially have on rental property within, and around, city centres with potentially tenants looking to live further away from those areas.

It suggested that curbs on foreign tourism may bring a greater supply of short-term lets to market in certain regions however an increase in ‘staycationing’ may ensure yields are not unduly impacted by the greater number of properties available.

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As with Q2 figures, this Q3 iteration of the Barometer does not include Wales as different lockdown rules apply.

Steve Cox, distribution director of Fleet Mortgages, said: “It’s clearly positive to see the majority of regions in England posting increases in rental yields, and those regions which have showed a very slight dip were already at relatively high levels to begin with.

“We learnt from the post-credit crunch period over a decade ago that rents are not as susceptible to a recession as property prices, with many occupants more willing to opt for the shorter-term financial commitment offered by renting than longer-term property ownership.

“While the economic backdrop is not pretty with the ongoing recession and uncertainty about the true impact on employment levels suggesting a negative outlook for rental demand, the early indications – as evidenced by our Barometer – are more promising with no suggestion of sharp falls in rental yields.

“Perhaps this is a result of pent-up demand and more households being formed as a result of the lockdown – we will get a better idea of the sustainability of this in the coming months.

“What we may however see, is further structural changes in rental demand, particularly in urban centres with tenants – who can now work from home – feeling they are no longer tied to a property near to the office, and may look further afield where they might get more for their money.

“However, we have not yet seen any evidence to suggest this is becoming a trend.

“Demand for rental property is clearly holding up in most regions and the underlying demographics suggest that property investment will remain a good choice in the years ahead.

“Within a shorter time-frame, the fact that – in England at least – the stamp duty holiday is available to landlord borrowers has undoubtedly been a factor in the increased interest in property investment purchases, with both new and existing landlords looking at the opportunities available, and seeking to secure the savings that are available from the holiday.

“Our next iteration of the Barometer will give us more evidence on the robustness of rental yields and whether the potential impacts of COVID-19 on households and living arrangements are playing out as they are perceived to be.”

By Jessica Nangle

Source: Mortgage Introducer

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A positive outlook for BTL: Seeking more than a room with a view

As the final quarter of 2020 begins – following an unprecedented six months – the buy-to-let (BTL) market is bouncing back strongly, in a way that few commentators predicted a few months ago, in my opinion.

The residential and buy-to-let markets both felt a significant impact during the initial stages of the pandemic. Public health measures made it difficult for surveyors to visit properties, contributing to nearly two months of disruption in the housing market. However, since property valuations became possible again, demand has returned, and the UK property market is demonstrating its resilience.

It has quickly become apparent to me that landlords and investors have not lost their appetite within the buy-to-let sector either. Demand for new tenancies has risen and historically such increases have often continued when supported by a growing market for property sales, as we are seeing now. The Chancellor’s stamp duty cut has further fuelled interest.

In fact, by July the number of new tenancies was nearly back to pre-pandemic levels, according to The Deposit Protection Service’s (DPS) quarterly Rent Index.

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Most of the growth in new tenancies has been at properties owned by professional landlords, and we expect to see this trend increasing. Professional landlords with reliable portfolios of good properties are often in a better position to absorb financial shocks.

According to the Savills Global Market Sentiment Survey, concerns over the pandemic are driving more UK residents to seek properties in rural locations.

The rise of home working means there are fewer benefits in living close to workplaces, particularly those in city centres. More people seem to be taking up the chance to find a property with a garden or a garage – or simply a bigger home, whether to accommodate greater home working or simply to enjoy more space. Such properties are more plentiful in the shires, meaning demand in urban areas may continue to fluctuate.

The Royal Institute of Charted Surveyors’ (RICS) August survey found that 83% of surveyors in the UK anticipate greater demand for homes with gardens or balconies in the next two years and that 68% expect the desirability of properties with a ‘more private’ outdoor space to grow. The increased demand for properties with specifically ‘roomier’ features has led to confidence in the housing market rising to a four-year high.

Overall, I believe this represents a relatively positive picture for brokers, professional landlords and buy-to-let investors. The fact that rates are low, loan-to-values (LTVs) are almost back to pre-pandemic levels can only go to support this positive picture.

Demand for rental properties is likely to increase in many areas, as renters seek tenancies with more than just ‘a room with a view’ to make staying and working at home more comfortable.

By Paul Fryers

Source: Mortgage Introducer

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Rise in first-time buyers searching for buy-to-let properties

Demand has grown among first-time buyers who want to enter the buy-to-let market, according to Legal & General Mortgage Club.

Data from its mortgage criteria search tool found the search combination for first-time buyer, first-time landlord and non-owner occupier increased by 18 per cent since the start of September.

The mortgage club also found that ‘holiday lets’ was the second most searched for term among advisers this month.

According to Legal & General, its findings showed many first-time property investors were looking to purchase buy-to-let properties in response to an increase in demand from consumers to holiday in the UK, rather than abroad, amid international travel restrictions.

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Kevin Roberts, director at Legal & General Mortgage Club, said: “Despite the impact of coronavirus, we are seeing rising demand across the housing market with buy to let in particular enjoying a mini-boom.

“Our latest findings from SmartrCriteria suggest a growing number of first-time buyers are searching for mortgages for buy-to-let ventures, including those engaging with the growing trend towards staycations this year.”

Mr Roberts added: “Amidst this continued high demand we are seeing in the mortgage market, thousands of borrowers are clearly turning to independent advisers to help them with their plans and these experts are playing a vital role for consumers”.

Akhil Mair, managing director at Our Mortgage Broker, commented: “The data L&G have shared today is a very accurate reflection on the type of business and enquiries we have been receiving in the last few months.

“We are witnessing an unprecedented amount of first-time buyer, first time landlord enquiries, including expat and foreign nationals wishing to invest in the UK property market.”

Mr Mair added the “huge interest” his firm had encountered was due to incentives such as the stamp duty holiday.

By Chloe Cheung

Source: FT Adviser

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Salford most profitable UK city for BTLs according to new study

A new study has revealed that Salford is the most profitable buy-to-let city for landlords, following the stamp duty holiday pushing UK house prices to an all-time high.

The research by CIA Landlord reveals that Salford, with an average house price of £173,311 and average rent prices of £1,052 per month, is the best city for landlords looking to buy a new property for buy-to-let purposes.

CIA Landlord calculated the best cities for buy-to-lets under the Government’s latest stamp duty holiday by analysing the average house price, rental price and stamp duty savings in every UK city for the cheapest home prices and highest rental yield in order to calculate profitability.

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Manchester follows closely behind Salford with house prices averaging at £193,681 and rental incomes at £1,141 per month. Leeds, Portsmouth and Belfast also feature in the top five buy-to-let hotspots.

High Wycombe in Buckinghamshire ranked as the worst city for landlords purchasing a buy-to-let property, with average house prices reaching £430,891 and rental prices averaging at £945 per month. Cambridge also saw low profitability margins, with average house prices at £448,432 and rental income averaging £1,080 per month. Reading, Worcester and Watford also feature on the bottom of the table in terms of profitability.

In the capital, Havering was the best borough for profitability according to the study, with house prices averaging £395,832 and monthly rental prices reaching £1,895. Alternatively, with average house prices reaching over £2m and average monthly rent coming to £4,003, properties in Kensington and Chelsea see the lowest profitability margins.

Source: Property Wire

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Why the North West could be the new buy-to-let hotspot

The North West of England is currently one of the leading UK regions for buy-to-let purchases, second only to the historically strong South East. Richard Rowntree at Paragon looks at the rise of the Northern new kid on the block

Over seven million plus people call the North West home and I imagine a good proportion of them would tell you that it’s a great place to live.

A combination of civic and independent investment has resulted in regeneration and forward-facing cosmopolitan hubs that are home to thriving arts, culture and entertainment scenes. This helps to draw in tourists and students, particularly to Liverpool and Manchester, the region’s two main economic strongholds and home to well-respected universities.

After decades of underachievement – according to a 2010 report by the Regional Economic Forecasting Panel, wealth per head in the North West was 14% below the UK equivalent – the region is finally fulfilling its potential.

The North West’s economy, once weakened by over-reliance on a fading manufacturing industry, is now driven by modern high technology sectors including ICT, pharmaceuticals and telecommunications in addition to financial services.

The result is a regional economy that is outperformed only by London and the South East after growing 31.4% between 2010 and 2018.

As well as the bright lights of the towns and cities, the North West boasts natural beauty. The Peak District and Lake District are stand out spots but are joined by plenty of other places offering impressive views over quaint villages, unspoiled countryside or wild coastline.

So, with a broad overview of the North West and what it can offer tenants, let’s look at some of the factors driving the growth that saw more landlords buy new properties in the region than they did in London last year.

Strong rental yields
When considering how lucrative a buy-to-let investment is, a measure that is almost always taken into account is the potential rental yield and this is an area where the North West performs particularly well.

Of all the landlords taking part in BVA BDRC’s latest survey, those in the North West achieved the highest yields. At 6.5% this was above the England average of 5.8% for Q2 of 2020.

Although analysis of Paragon data suggests that the North and Wales top the North West in terms of rental yields achieved, it also shows that landlords in the region can potentially see even better figures than those reported by BVA BDRC with average yields of 7.11%. Whichever measure you use, it’s clear that the North West is a place where the ratio of rental income to property purchase price is attractive to investors.

I think that central to the North West’s strong yield return is demand for rented accommodation in the area – something supported by data on the growing number of households as I cover below – and this is driven by some of the groups of tenants who gravitate to the region.

Across the UK, the highest yields are achieved by landlords who let to migrant workers at an average of 6.8%. Mirroring the size of regional economies, the North West has the highest migrant population in the country after London and the South East.

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According to the Office of National Statistics’ latest quarterly migration report, in the year ending March 2020 around 313,000 more people moved to the UK than left. Of this number 257,000 arrived for formal study.

When we look at the UK cities with the most universities, Liverpool and Manchester are both in the top ten and are joined by others across the region such as Lancaster. Add to this the fact that student lets offer strong rents and we can see that the region’s offering for those choosing the UK for work or study supports its position as a leading area for yields.

The student market is one we feared would be negatively impacted by the Covid-19 pandemic and while we’re yet to see how this will develop there is potential for the numbers of overseas students studying in UK to dramatically fall in the short term. It’s worth noting that if this scenario does materialise it would also result in a reduction in UK students studying abroad, as well as those enjoying gap year adventures, so there would be a degree of one cancelling out the other.

Attractive property prices
Of course, to achieve good yields it helps if the price you pay for property is comparatively low and this is another key element of the North West’s emergence as an appealing area for buy-to-let landlords.

The average price of a property in the UK is £234,612 according to the latest Land Registry UK House Price Index. Those purchasing in the North West will pay much less as the average property price is just £167,809. Only those in neighbouring regions will pay less for property with averages in the North East at £125,938 and Yorkshire and the Humber at £165,561.

As you would expect, many of the UK’s most expensive postcodes are in London and the South East. Paragon figures show that advances in these regions have decreased over the past few years and increased in the North West amongst other areas. This suggests that there is a trend towards investing in areas where buyers feel they are getting more for their money.

Stability
At first glance, the North West’s low levels of rental inflation over the past five years would appear to be a chink in its armour. Even though it hasn’t exceeded 1.5% over this period, it has been generally stable and that is something that shouldn’t be overlooked.

Stable markets don’t always deliver the best returns when the going is good but, as the events of 2020 should prove, it’s not always possible to see what’s around the corner. It’s sometimes wise to look at the longer term, opting for markets that deliver reliable, if modest, returns due to being less susceptible to external influence.

It’s too early to gauge the long-term impact that coronavirus will have on the region but looking back to midway through the last decade we can see that the North West has a proven track record of being less volatile than other regions.

Changes to tax relief on finance costs and Stamp Duty Land Tax (SDLT) as well as Prudential Regulation Authority (PRA) underwriting standards for buy-to-let mortgages resulted in a decline in lending for buy-to-let purchases in most regions after being introduced by the Government. Lending for house purchases in the North West remained relatively stable, however and early indicators point to a similar resilient response to the market’s latest challenge.

Affordability
With rents only creeping up slowly in comparison to other regions, people in the North West pay a smaller proportion of their average salary – 26%, which equates to £610 per calendar month -compared to the England average where renters typically pay 29% of their salary.

I feel that this balance of offering tenants a great place to live while remaining affordable is crucial to the area’s success. It also means that any rental increases can be absorbed without a significant negative impact.

Strong levels of tenant demand
The North West’s affordability also has an impact on demand and may be one reason why it has the highest levels of any UK region according to landlords surveyed by BVA BDRC.

Another factor may be the growing number of households. The Office of National Statistics’ 2018-based household projections for the region forecast a change from 3,120644 households in 2018 to 3,296981 households in 2028, an increase of 5.6%.

This can be attributed to a range of factors; one being rising numbers of one person households which, after increasing by 300,000 on the year prior, surpassed eight million across the UK in 2018.

With 31% of North West households being listed as lived in by one person, the area sits at the higher end of the scale for single occupancy households in England. Comparing this to London, the lowest in England at 23.9%, suggests that this trend is playing a part in stronger demand in the North West compared to the capital.

Considering again that the North West is home to a large number of well-respected educational institutions, demand in the region may also be boosted by increasing numbers of those in higher education. The latest figures reported 2.4 million people in post-secondary study, a significant number of whom rely on the PRS for their accommodation.

Landlords show desire for continued North West investment
The idea that landlords are responding to this demand is supported by industry data. The North West recorded the third highest number of new buy-to-let purchases over the past five years, with the South East accounting for the highest, followed by Greater London. Last year, the region leapfrogged London in terms of new buy-to-let homes purchased.

Again, judging by landlords responding to BVA BDRC’s Q2 2020 survey the region is set to continue to attract investment. Those in the North West are more likely than any other region to buy property in the next 12 months, with 26% of landlords in these locations indicating that they intend to increase their portfolios.

Source: Mortgage Finance Gazette