Young Population and Student Destination
Young adults are the most common age group for renting, so many buy-to-let investors are looking for cities with a younger population than average to ensure a consistent flow of potential tenants for their property. This puts the North West in the sights of many savvy investors, as large urban areas such as Liverpool, Manchester, Preston and Lancaster have sizable young populations.
Increasingly, young people are moving away from London to chase a more affordable cost of living up north. There are robust employment options for young professionals in the North West, and Manchester and Liverpool have been popular choices for those leaving the capital.
The North West is also one of the top destinations for buy-to-let student accommodation, with prominent universities in Manchester, Liverpool, and Preston. Major student cities in the North West, like Manchester, also have high graduate retention, meaning many of these students stay and work in the area after finishing university, adding to rental demand.
High Capital Growth
Property is more affordable in the North West compared to the UK average and punching above its weight in terms of capital growth.
According to The Times, house price growth has been robust in Greater Manchester. As house prices were comparatively low previously, property is still relatively affordable in the area. Those who invest in the North West now are likely to reap the rewards of healthy capital value appreciation in the future, as property experts like Savills predict capital growth in the region of 11.7% over five years to 2027.
High Rental Yields
The North West can offer some tempting rental yields for buy-to-let investors thanks to comparatively lower property prices.
High demand and low supply are also pushing rents up higher and higher, adding to the rental income of investors. Demand is so high in the North West that the BBC has reported 30 enquiries per rental property, higher than any other UK region.
Rents in Greater Manchester have been climbing exponentially, up 13.8% on the previous year in Manchester and 16% in Salford. Other parts of the region are also experiencing rapid rent increases, with 8.7% in Liverpool and 7.5% in Warrington.
Despite these rising rents, the North West is still an attractive place to live for renters. Costs are snowballing, but less than you would see when investing in London property. As rents were considerably lower in the first place, the area is still attracting plenty of rental demand, regardless of the high increases.
The North West has some exciting potential regeneration projects on the cards. The government has recently announced that it will invest £19.8 billion in new inter-city and local links in the North, redirecting money from the recently-scrapped HS2 scheme. A further £12 billion will be set aside to deliver the Liverpool to Manchester Northern Powerhouse Rail route.
Individual cities in the North West also have their respective regeneration projects, with plenty of exciting plans for revitalising their ailing areas.
Buy-to-let property investors can benefit from regeneration efforts as they make areas more attractive to buyers and renters, boosting the local population. This drives up rental demand rent prices, and encourages capital growth. Investors who buy in before the projects are completed can maximise returns through improved rental income and house value appreciation.
Read our updated guide to learn more about regeneration in the North West.