Roger Morris, Group Distribution Director
When the noted author, city dweller and all-round brainbox Samuel Johnson was asked if he would ever consider moving out of London, he’s supposed to have replied: “No, sir, for when a man is tired of London, he is tired of life.”
And for years, landlords didn’t get tired of London either, attracted by its wide variety of housing stock, high demand and some of the best rental yields in the country.
However, it appears that London’s crown as one of the best places to invest in a buy to let property has slipped and that landlords may finally be getting weary of the nation’s capital.
The latest research has found that, rather than London and the South East, it’s the Northern regions of the UK that could be the places to explore if you’re thinking of purchasing a new investment property.
Landlords operating in the North West are currently achieving the highest average rental yields at 6.5%, with landlords in the Yorkshire and Humber area achieving 6.3% and those in the North East achieving 6.2%. Landlords in Central London, by comparison, are achieving yields of just 5%, with those in the South East achieving 5.5%1.
Landlords in the North West are also typically more upbeat, with more than half of landlords likely to report current demand for rental property as ‘very strong’ or ‘strong’2. Meanwhile, 55% of landlords in Yorkshire and Humber said their business expectations for rental yield for the next three months were ‘very good or good’, with 53% of landlords in the North West saying the same.
And it doesn’t stop there. Landlords in London say they expect to be most severely impacted by COVID-19, 32% significantly so3, with three in four now reporting a recent decline in tenant demand4.
So what’s the reason for the rise of the North? Well, the increasing professionalisation of the buy to let market means it appears landlords are becoming more focussed and selective in where they buy properties. And with yields consistently higher in the north of the country than they are in other areas, it’s no surprise that landlords are concentrating on the areas where they can get the most value.
If you’ve got a customer who’s looking at new investment opportunities in different areas of the country, it’s worth knowing that our buy to let mortgages offer landlords a variety of solutions, whether they’re a portfolio landlord, run their business as a limited company, are looking at Houses in Multiple Occupation (HMOs), and even first-time buyer and first-time landlords. Our range features LTVs up to 75% and is available for purchases and remortgages. We’ll accept HMOs up to six bedrooms, while our sister company InterBay Commercial can consider properties with up to 20 bedrooms.
To find out more, speak with a member of our Sales Team or call our dedicated support service on 0800 116 4385.
Source: BVA BDRC Landlords Panel Report Q2 2020 (slides 371, 242, 93 and 274)