Has the London housing bubble finally popped?

Are investors are securing far more robust returns in northern hotspots as opposed to London? Here, we take a look.

Castigating tax reforms, including removal of mortgage interest relief, stamp-duty crack downs and growing constraints surrounding mortgage borrowing, are encouraging landlords to exit the buy-to-let market as the future remains dubious.

New research by estate agent Savills, suggested that due to uncertainty in the forthcoming buy-to-let market, lending had subsided by 26pc last year, as depreciated profit margins discouraged new investors from expanding their portfolios. However, there still remains a vast part of Britain that defies these findings.

Liverpool is an all-encompassing city that has a powerful culture, efficient transport links and a wealth of elite educational facilities. It is the place to be for the millennial generation, where 70,000 students have flooded to the area, acting as a driving force behind the city’s multitude of investment opportunities, ultimately boosting the demand momentously for rental properties.

TotallyMoney, observed 580,000 properties across England, Scotland, and Wales to find the areas that offer the highest buy-to-let yields, three postcodes in Liverpool are among the top 10 most profitable locations for landlords.

Awarded first place was the postcode L7, covering Edge Hill, Fairfield and Kensington, with L6 closely following covering areas of Anfield, Everton, the city centre, Fairfield, Kensington, and Tuebrook. With average rental yields of 11.79pc and 11.59pc, the proximity to the city’s four universities enabled these areas to thrive. In contrast, despite London once being regarded as the leading property hotspot, the capital city is falling behind dramatically.

Soaring property prices and high stamp duty costs are having a detrimental effect on the market. In fact, London comes nowhere near the top 10 and the city once regarded as the focal point for many investors slips down the table to the bottom 10, with rental yields as low as 1.5 per cent, according to TotallyMoney.

Investors are slowly revaluating their investment choices and are resetting their sights on the northern powerhouse, in cities like Liverpool, where higher rental yields far exceed the measly offerings in the capital. RWinvest, a leading property investment company based in Liverpool state, says, Liverpool is an area all investors should be looking at, with an influx of investment from the northern powerhouse and fast-growing economy. Liverpool’s waterfront alone is benefitting from £5.6 billion worth of investment. Liverpool’s economy has grown an astonishing 71.8 per cent since 1995, an impressive statistic and encouraging for the future – a profitable area for investors looking to get ahead of the curve and invest while the city is growing.’

Regeneration is significantly developing the region whilst transforming its reputation from rags to riches. Once home to a global shipping industry, the city now houses 1.3 million people and has established itself as one of the country’s most remarkable digital and technological hubs.

Monumental renovation projects, such as the £5.6 billion Liverpool Waters regeneration scheme, have helped lead rapid population growth over recent years and place Liverpool on a world-renowned stage for global property investment opportunities.

Why invest in Liverpool?

Extensive rail links are increasingly adding to the appeal of living and studying in Liverpool, helping to drive progression and innovation across the city is the Northern Powerhouse Rail. A fast line between Liverpool and Leeds would allow 1.3 million people in the North of England to reach four cities in less than an hour, adding billions of pounds to the local economy – a transformational development facilitating boundless investment opportunities.

Investors are securing far more robust returns in northern hotspots as opposed to London. Rental yields prove healthier as London property prices are surging exponentially and the rental returns are weaker. Northern powerhouse hot spots such as Liverpool and Manchester have lucrative investment opportunities available with assured high rental yields generating maximum capital appreciation.

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