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Surge in Demand for Buy-to-Let Properties in the North West

Photo of pinned Manchester on a map of europe. May be used as illustration for traveling theme.

New research shows that demand for buy-to-let properties in the North West has soared by 38% over the past year, despite Brexit uncertainty and higher Stamp Duty costs, according to high yielding investment specialist The Mistoria Group.

Cities and towns in what is known as the Northern Powerhouse are proving to offer the best investment opportunities in buy-to-let property, with average yields of 7.08% in Salford, 5.96% in Leeds and 5.79% in Manchester.

Manchester, the unofficial home of the Northern Powerhouse, is in the top ten buy-to-let postcodes in the UK, with recent rent price growth of 7.53% over the last year.

The resilient property market in the North West is helped by the highly successful regeneration of the area, which has brought new jobs, transport links and a range of large housing projects.

A recent report, Powerhouse 2050, says that the north of England could be £100 billion more productive and be world-leading in four fields, including energy and digital, with the right backing. It also calls for £60m for the north to become the UK’s first region to commit to industrial digitisation and £100m to reinforce the UK as a leader in health data.

Mish Liyanage, the Managing Director of The Mistoria Group, comments on the region’s appeal: “The housing market in the North West is stable and has not been impacted by Brexit, proving the strength of the property market and economy as a whole in this region.

“The Northern Powerhouse offers investors unbeatable buy-to-let opportunities, way ahead of London and the South East. Affordable property prices and a booming economy are drawing students, families and professionals to the region.”

He continues: “HMOs [Houses in Multiple Occupation] in Liverpool and Salford have become very popular with investors, as both cities have a high population of students and young professionals. Also, in both Salford and Liverpool, Article 4 is not in operation, so investors can convert a family home, or a home used by a single person (C3 -dwelling house/flat), to a small shared house of up to six unrelated individuals (C4 –HMO), without any planning permission.

“Whilst the market conditions in many areas are becoming more developed and competitive, an HMO property with a superior spec can deliver landlords and investors an average gross rental yield of 13%, leveraged return on investment of 35%-plus, before any charges and voids.”

Liyanage offers a calculation: “For example, investors can acquire a high quality, three-bed HMO which houses three students, from £120,000 upwards in Liverpool. The return on investment is very attractive too, with 13% (8% cash rental and 5% capital growth). The gross rent on the property will exceed £1,235 per calendar month, as each room is rented out. Larger rooms, open-plan living and kitchen areas, ensuites, TVs, unlimited broadband, premium kitchen appliances and furnishings are the type of features that help to generate a high yielding HMO.”

Em Morley:
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