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Levels of rental demand continue to rise across the UK
So much so, that rental demand has had its strongest growth in 13 years. The likes of Birmingham, Manchester, Liverpool, and Leeds appear to be the standout cities. However, it is the north-west region as a whole where tenant demand appears to be toppling the available number of properties.
The highest number of
Recent data from ARLA Propertymark has shown the north-west as having the highest number of new tenants registered per branch, in comparison to other UK regions. In October, the north-west averaged 163 prospective tenants per branch. To put this in perspective, the national average was 71.
This is indicative of tenant demand moving into the north-west regions. For any buy-to-let investors, an increase in new tenants is a clear sign of a growing city and profitable market. In areas where rental demand is growing, investors can expect to see minimal void periods.
From this, buy-to-let investors can be confident when investing in the region. As a whole, the north-west buy-to-let market appears extremely stable and strong. The rental market is much less volatile than other regions, as rental growth has risen at a stable level over the last year. Any investor that owns a property in the north-west, in particular in Manchester and Liverpool, can be confident their property will be snapped up by potential tenants.
Affordable property prices equals
Another reason for the boom of the buy-to-let market is the affordable property prices, compared to the national average. The average property price across the north-west is currently just £161,160, compared to the national average of £251,223. Therefore, investors can secure more for their money in this region.
Most importantly, they will also benefit from rising property values. This is something that can not be said for regions in the south, such as London, where property prices have been recorded as falling. Therefore, as well as high tenant demand and increasing rents, buy-to-let investors are also able to access high levels of capital appreciation.
It is clear why the north-west market has become so popular. An ideal investor market is one that excels in both rental returns and capital appreciation, the two main sources of buy-to-let income. It seems the north-west scores exceptionally high in both areas.
Why is tenant demand rising so significantly in the north-west?
One factor for the rise of new tenants in the north-west could be the “race-for-space”. This has been a reoccurring theme in the property market over the course of the pandemic. As well as homeowners, tenants have also been on the hunt for more space. Therefore, as the average rental prices are well below London, the north-west appears to be an obvious choice for those wanting to get more for their money. For buy-to-let investors, strong tenant demand and low purchase prices will ensure attractive rental yields.
Secondly, the north-west regeneration projects have been a huge influence on the growth of tenant demand, in particular in Manchester and Liverpool. First and foremost, regeneration projects make the city a much more attractive place to live for its residents. This means tenant demand will rise, and for buy to let investors, rental prices will increase too.
Secondly, it is worth noting that regenerated cities also attract new businesses. Young professionals will closely follow new job opportunities. Young professionals are a huge power behind the rental market, thus, cities attracting new businesses will simultaneously attract new tenants.
It is no secret that the north-west market is a stable investment choice, and the increasing number of new tenants recorded over the past few months confirms this. It is worth noting, that the increased rental prices will continue to be underpinned by a lack of supply. This is especially true of the north-west, as the boom in demand and population growth is near impossible to match at the current rate of supply. Therefore, buy-to-let investors can feel confident that the levels of rental growth will remain consistent.
Could the North-West be your next property investment? Explore our opportunities.
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