This article first appeared in Rent Magazine on 24/11/17….
New research shows that demand for BTL property in the North West has soared by 38% year on year, despite Brexit and increased stamp duty costs according to The Mistoria Group, specialists in high yielding investment property in the North West.
Cities and towns in what is known as the Northern Powerhouse are proving to offer the best investment opportunities in buy-to-let property, with yields of 7.08% in Salford, 5.96% in Leeds and 5.79% in Manchester. (Source: Kufflink 2017).
Manchester, the unofficial home of the Northern Powerhouse, sits in the Top 10 buy-to-let postcodes in the UK, with rental price growth of 7.53% and yields of 6.11%. (Source: LendInvest 2017).
The resilient property market in the North West is helped by the highly successful regeneration of the area which has bought new jobs, transport links and a range of large housing projects. A recent report, Powerhouse 2050 says the north of England could be £100bn more productive and be world-leading in four fields – including energy and digital – with the right backing. It also calls for £60m for the north to become the UK’s first region commit to industrial digitisation and £100m to reinforce the UK as a leader in health data.
Mish Liyanage, Managing Director of The Mistoria Group comments: “The housing market in the North West is stable and has not been impacted by Brexit, proving the strength of the property market and economy as a whole, in this region.
“The Northern Powerhouse offers investors unbeatable BTL opportunities, way ahead of London and the South East. Affordable property prices and a booming economy is drawing students, families and professionals to the region.
“HMOs in Liverpool and Salford have become very popular with investors, as both cities have a high population of students and young professionals. Also in both Salford and Liverpool, Article 4 is not in operation, so investors can convert a family home, or a home used by a single person (C3 -dwelling house/flat) to a small shared house of up to six unrelated individuals (C4 –HMO), without any planning permission.
“Whilst the market conditions in many areas are becoming more developed and competitive, a HMO property with a superior spec can deliver landlords and investors an average gross rental yield of 13%, leveraged return on investment of 35% plus, before any charges and voids.
“For example, investors can acquire a high quality, three bed HMO which houses three students, from £120,000 upwards in Liverpool. The return on investment is very attractive too, with 13% (8% cash rental and 5% capital growth). The gross rent on the property will exceed £1,235 pcm, as each room is rented out. Larger rooms, open plan living and kitchen areas, ensuites, TVs, unlimited broadband, premium kitchen appliances and furnishings are the type of features that help to generate a high yielding HMO.