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Magnetic north attracts buy-to-let investors as rents rise to record rates
September 30, 2014Article by Charlotte Ashton
Buy-to-let investment is enjoying its heyday currently, as more and more individuals choose to profit from property by putting their money to dual use and attracting monthly income as well as capital gains. But the buy-to-let story is far from being an even one across the UK.
The pull of the north
With the exception of Southampton, the UK’s top ten best performing postcodes for buy-to-let investment yields are all north of Sheffield. New research by TotallyMoney.com has revealed that Sheffield is leading the nation, with yields in the region of 11.06%. Within England, Bradford comes second, with gross yields of 9.18%, followed by Manchester with yields of 8.71%.
Ray Withers, Chief Executive of specialist property investment company Property Frontiers, comments,
“The whole buy-to-let sector is focused on the north of England currently. It’s where the money is. Strong demand from a horde of young professionals is keeping the lettings market jam-packed with tenants. Rents are rising to record rates and buy-to-let properties in cities like Bradford, Manchester, Birmingham and Liverpool are being snapped up incredibly fast by landlords looking to put their money into bricks and mortar.”
Property Frontiers is ahead of the curve with its buy-to-let offerings up north. From studios to penthouses, the company’s buy-to-let apartments are built to an exacting specification and furnished in such a way as to attract the new generation of affluent young professionals who have been priced out of the housing market and instead want to rent the best of the best while remaining free of the commitment of a mortgage or the property maintenance headaches that ownership entails.
This attitude has helped rents in England and Wales reach record levels, according to new figures from LSL Property Services, whose latest buy-to-let index reveals that the cost of renting has now risen to £761 per month. Studying the reasons behind the record rent level, LSL Property Services considered the influence of buy-to-let investing on the lettings market. It considered that with both rents and capital gains taken into account, combined returns over the course of one year had reached nearly 13%. Withers continues,
“Buy-to-let investments are enabling individuals to make some seriously impressive returns right now. What’s interesting is that we’re seeing a reversal of the usual north-south divide when it comes to generating strong yields. The south is performing poorly almost across the board, while the north is thriving.
“Those in the industry appreciate that buy-to-let can be a postcode lottery (it’s why companies like Property Frontiers spend so much time analyzing the complexities of the market, so that their clients know where and when to invest), but it’s rare for there to be such a stark difference. You could almost draw a line right across the middle of England to show where the divide is placed.”
With a Bradford development already open to investors, a Liverpool one coming soon and a Manchester one to follow in the next few weeks it seems that Property Frontiers has certainly done its homework when it comes to enabling its clients to be at the forefront of the buy-to-let market.