London Vs The Northern Powerhouse

The North and South Divide

Northern Powerhouse cities such as Liverpool, Manchester, and Leeds, are quickly gaining momentum as property investment hotspots and the best places to buy to let in the UK.

With sky-high rental returns and strong affordability, the North has been considered the best place to buy property for many years.

The North has come a long way since decades ago, back when Northern cities and towns faced great economic difficulty whilst the more affluent South thrived in comparison. The economic power of London has been noted ever since the 19th century, and by the 1980’s, this divide between the North and South had become one of the country’s biggest political issues.

The housing market is one area that was affected by Thatcherism in the 1980’s. In the 1970’s, the average house price across the UK stood at around £4975, but by the 1980’s, prices rose drastically. During this era, houses reached record highs of £39,500, almost doubling by 1990 at £60,000. The number of new housing developments being built during the 1980’s was low, with more of a focus on regenerating existing buildings and converting run-down areas like Liverpool’s docks.

In the North, housing has always been significantly lower in price than in the South. Whilst the average property price in 1995 stood at £90,000 in London, the affluent L19 postcode of Liverpool was more than half this at just £43,000 in the same year. That’s not to say, however, that Liverpool hasn’t always had the potential for return on investment, with properties in the same area reaching highs of £278,495 by 2015. Additionally, the benefit of this more accessible price range is that it will help investors more easily get their hands on an investment property with the potential for faster growth, as opposed to paying large sums in the capital for a property that is at a bit of a standstill with regards to its price.

Investment in the Northern Powerhouse has never been stronger. The key cities of the Northern Powerhouse, Manchester and Liverpool, all offer some great rental yields and potential for those keen to invest in some of the best buy-to-let areas. Whilst Northern cities have for a long time been deemed less favourable when compared to Southern cities like London, in actuality, Liverpool and Manchester are now some of the most dynamic and prosperous cities in the country. Investors and property buyers who think carefully and diversify their portfolios in cities like these can stand to make returns a lot faster than in the stagnating capital, which in many ways is still feeling the effects of the Brexit fallout.

Liverpool and Manchester have everything an investor or tenant needs in a city. From beautiful architecture, a rich culture, renowned universities, exciting business opportunities, and brilliant attractions and local amenities, the North has come a long way since the days of economic turmoil. The Northern Powerhouse is an initiative that aims to improve the cities of the North even further by investing in transport and connectivity, skills and education, economic growth, and overall quality of life for those living and working up North. For investors who are buying property in these areas at the moment, these ongoing regeneration plans are nothing but good news.

The exciting plans in place for Northern cities like Liverpool and Manchester are part of what makes them some of the best buy-to-let areas in the UK, with an optimistic outlook for capital growth. Liverpool and Manchester offer some of the highest rental yields the UK has seen as of late, with an average of 7% in Liverpool and 8% in Manchester. The price it costs to purchase a property up North plays a big part in this outcome, with property in Liverpool, for example, costing £177,803 on average. To put that into perspective, that’s around £345,522 cheaper than the London alternative.

Not only this, but rental prices in key Northern cities are rising, with a 2.65% growth in Liverpool and a 5.76% increase in Manchester. This increase has likely been driven by the number of people moving up North from London in recent years, with Manchester having seen a total of 10,200 Londoners move there in 2017, compared to 8,870 people leaving the city to head to London. With a number of exciting business opportunities available in Manchester, a lower cost of living, and better value for money regarding rental properties, it’s not hard to see why people are being drawn to the North. With its growing digital sector in the Baltic Triangle quickly becoming a go-to destination for young entrepreneurs and tech startups across the country, Liverpool is also attracting a lot of workers away from the expensive south.