Four million people in the UK now live in the private rented sector. This figure looks set to increase as more people choose to rent rather than buy, attracted by the flexibility it offers them. The demand for rental accommodation and a lack of good quality rented stock has underpinned rents across England.
With average rents rising and house price growth slowing, landlords can achieve better yields than they have in recent years, with the North West of England being one of the best places to invest.
Liverpool boasts impressive numbers when it comes to investment property. Yields of 11.79% and monthly rents of £1,162 can be achieved in some part of the city, whilst house prices average at £135,061. House prices have risen by more than 2% since 2017, and rents by 5.2%. Liverpool can credit these figures to the large demand for student housing - nearly 70,000 students call the city home. Liverpool has also benefitted from continued investment, receiving over £1 billion from Grosvenor Estates to regenerate the city centre, which is now one of the most popular shopping destinations in England.
There is still more regeneration to come. The Fabric District, which is still reasonably untouched by investors, is in the process of cultivating several new housing developments. The location is ideal for students and commuters alike. There are two routes with direct access to the city centre and Liverpool Lime Street train Station.
Liverpool isn’t the only city that property investors should be considering. Manchester has recorded some of the fastest house price growth of any other UK city according to Hometrack. In 2018, house prices increased by 8.8% year-on-year. Manchester has some of the country’s best buy to let returns. Landlords can achieve a yield of 8.6% and monthly rents of £1,331 in some parts of Greater Manchester, with the average house price at £185,645.
Like Liverpool, Manchester has benefitted from regeneration projects. The economy has responded positively after the government committed to deliver more funds to the city by investing in skills, innovation, transport, and culture, an attractive combination for potential residents. Manchester is known for its state of the art infrastructure and is accessible to and by almost any place in the UK. This infrastructure has attracted industry. Manchester is known for being on the very cutting edge of the UK’s engineering, media, and technology sectors, as evidenced by the £650 million Media City business hub.
There is a very high demand for buy-to-let homes in Manchester. The city boasts a large population (nearly 2.73 million people), and is the largest social and economic hub after London. This industry means that high-quality, city-centre accommodation is in high demand, and many investors are rushing to capitalise on Manchester’s low prices, economic growth, and high yields.
Age plays a critical role in the attractiveness of Manchester as a buy to let investment. Due to the increase in the creative industries, more and more young people are moving to Manchester to take advantage of the growing number of local jobs. The city has a 70% graduation retention rate, and 60% of the city’s housing stock can be found in rentals.
Are you interested in finding out more?
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Data has come from Portico, RW Invest and Alliance Investments.