According to a study by Octane Capital, the North East of England provides the best value for money for buy-to-let investors.
Investors pay an average of £104,000 per bedroom in the North East of the country compared to £556,460 in the capital. A property investor with £1m to spend on their portfolio could hold just under 10 bedrooms in the North East.
The same study also lists the expected yield for the North East as 4.5%, the highest in the study. By contrast, the expected yield in London stands at 1.4%. With this return, you can see why so many people think investing in the North East of England is more appealing than in the South.
Octane Capital chief executive Jonathan Samuels, said: “Portfolio investment offers advanced investors a far quicker path to scaling their portfolio and, as is often the case when buying in bulk, doing so can result in securing a greater level of value per unit. But it’s also the convenience of this approach that appeals to many, allowing them to acquire multiple properties in a single transaction. Doing so also allows them to complete any modernisation and to bring these homes to market within a similar timeframe, so that they can start to earn a consistent return across the board.”
Why North East England Represents Best Value For Landlords and Property Investors
North East England has been experiencing a renaissance in recent years. Once seen as an area of the country to be avoided, the region is now attracting attention from all over the UK, thanks to its low property prices, high rental demand, and strong potential for capital growth. Here’s why landlords and property investors should consider making the North East their next investment destination.
Low Property Prices
One of the biggest reasons why the North East is such an attractive investment destination is the low cost of buying property. The average property price in fantastic locations such as Durham or Newcastle-Upon-Tyne are lower than the UK average.
High Rental Demand
Thanks to the region’s low property prices and strong potential for capital growth, there’s high demand for rental properties in North East England—especially from young professionals who are priced out of London and other major cities. In Newcastle-upon-Tyne, for example, more than 50% of residents are aged 25-34. This population demographic is typically renters rather than buyers, making them an ideal target market for landlords and investors.
Strong Potential For Capital Growth
Finally, North East England offers strong potential for capital growth. Thanks to recent regeneration initiatives like The Great North Regeneration Program, there’s been a significant increase in inward investment in the region. This is likely to continue in the coming years as more and more people become aware of all that the North East has to offer, leading to even higher capital values and rental prices.
Further evidence gives confidence about the North East market
In August 2022, FTAdviser reviewed the ‘housing purchase affordability’ information provided by the Office for National Statistics (ONS) and concluded the North East of the country is the most affordable part of the country to rent property.
With many people coming under considerable financial pressure, there will be many households looking to move to better manage their finances.
Around this time, FTAdviser ran quotes from Ross Boyd, the founder of Dashly.com, who said; “As for London, the capital is in a different dimension altogether when it comes to affordability. For the average person seeking to get onto the property ladder in the capital, it’s like climbing 10 Everests.”
In this light, the North East of the country is going to appeal to many people.
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