The best places to invest in a buy-to-let in the north of England
Britain’s cities are back and gearing up for a summer of fun: Manchester is set to host three matches in the UEFA Women’s Euro championships, Wigan has its very own jazz festival and in Leeds they’re practising their moves for PopWorld. We’re all rediscovering the joy of urban life: office banter, short commutes and rooftop bars.
A surge of people desperate to embrace urban living is inevitably stoking demand for homes to buy, rent and let. The renewed interest in rental properties is persuading landlords to overcome any nervousness they might have about the economy and to invest once more. And the locations they want? The powerhouse cities of the north.
Attention has switched away from the new-build blocks of flats, once popular with investors, with the cost of remedying dangerous cladding leading some to look again at houses and even bungalows. “In some areas bungalows represent the strongest investment, because they’re attractive to retirees, downsizers and families,” says Georgina Cox, the managing director of the estate agency Moving Works.
Nick Whitten, the head of UK residential and living research at JLL, a property investment company, predicts that the new Energy Performance Certificate rules for rentals will focus minds back on flats soon enough though: “When you look at how much you might have to spend to bring an older house up to scratch, you can see why new apartments are attractive,” he says.
So whether it’s an apartment in Bradford or bungalows in Bridlington, there’s gold again in the north for private investors, if you know where to look.
Liverpool
If you’re looking to invest in the North of England, this maritime city, with two universities, major hospitals and a resilient tourist and retail trade is a good place to start. “Liverpool is very much in a growth phase, particularly in prime areas, such as the waterfront,” says Nick Goldsworthy, the coowner of Logic Estates.
In the past year Liverpool has experienced record property price growth of 14 per cent, outperforming Leeds Birmingham, Manchester and London, according to research by Logic Estates and Beauchamp Estates, using analysis by Dataloft. Flats in Liverpool are 60 per cent cheaper at an average of £237 per sq ft than their counterparts in London, which cost £678 per sq ft. If you had a budget of £1.5 million you could buy one apartment in prime central London, two in London Docklands or six flats in Liverpool.
However prices are on the up, outperforming London, and northwest regional average yields are still impressive, at six per cent for a one-bedroom apartment and 6.5 per cent for a twobed apartment.
“While the likes of Baltic, Ropewalks, Pumpfields and Fabric Quarter have seen strong investor demand for off-plan schemes, established locations such as the city centre and docklands continue to be our favoured areas for investment,” says Alan Bevan, the owner of the estate agency City Residential. “These tend to offer buildings with a mix of tenants and owner occupiers, thereby providing a more balanced mix of residents and a better longer-term investment.”
House or flat? Apartment — with a massive choice, from glitzy new-builds to heritage conversions. A two-bedroom flat in The Albany, a former cotton exchange on Old Hall Street, costs £185,000.
Manchester
If proof were needed that Manchester is thriving, the developer Renaker has just been granted planning permission to build a three-storey primary school with a rooftop playground less than half a mile from Deansgate station on Great Jackson Street, the first new school within the city ring road in almost two decades.
Manchester’s rental demand continues to climb also, with prices to match, especially in popular spots such as Castlefield and Ancoats. Across the city properties sold for an average of £249,576 in the past year, according to the investment company Aspen Woolf, an increase of 6 per cent on the year before. In the
city centre average monthly rents are close to £1,100, with average yields around 7 per cent.
“If investors also want capital appreciation, then looking to the newer regeneration areas has proved profitable,” says Anthony Stankard from the city-centre estate agency Reside. “Ancoats is a good example. In 2018 we sold a two-bedroom apartment in One Cutting Room Square for £262,500. Four years later the
same apartment has just sold for £325,000, a 20 per cent increase.”
Leeds
There’s a huge amount of residential development underway, especially in the South Bank area. City centre flats are selling for an average of £174,294 and investors can expect steady yields of 5 per cent, according to Aspen Woolf.
House or flat? There are some four-bedroom houses, aimed at owner-occupiers, from £425,000, at the CITU Climate Innovation District, but thousands of flats in the pipeline. Developments selling off-plan include Citylife’s Springwell Gardens, a development featuring attractive tiered gardens, with 10 per cent deposits from £11,844 for a one-bedroom apartment.
York
If you have the £650,000-plus budget and you can get a foothold in a market where sales of the best properties are often agreed privately, a period property in Clifton or a family house near the Knavesmire with good access to the A64 will return your investment in income and capital growth. Renters across York are paying £1,394 a month on average, according to the property website Home.co.uk. Young professionals love Bishopthorpe, with its high street of indie shops and cafés, or Tang Hall to the southeast of York city centre, close to the University of York, with it’s reasonably priced bread-and-butter stock.
House or flat? Houses are more plentiful; a three-bedroom semi on Newland Park Drive, producing an annual income of £8,580,and less than a mile from the University of York’s Heslington campus, is up for auction, July 6, with a guide price of £190,000 (via Auction House).
York
If you have the £650,000-plus budget and you can get a foothold in a market where sales of the best properties are often agreed privately, a period property in Clifton or a family house near the Knavesmire with good access to the A64 will return your investment in income and capital growth. Renters across York
are paying £1,394 a month on average, according to the property website Home.co.uk. Young professionals love Bishopthorpe, with its high street of indie shops and cafés, or Tang Hall to the southeast of York city centre, close to the University of York, with it’s reasonably priced bread-and-butter stock.
House or flat? Houses are more plentiful; a three-bedroom semi on Newland Park Drive, producing an annual income of £8,580,and less than a mile from the University of York’s Heslington campus, is up for auction, July 6, with a guide price of £190,000 (via Auction House).
Sheffield
The city centre has taken a battering recently, with the closure of John Lewis and the future of the legendary music venue The Leadmill in the balance. However, the steel city is resilient; safe bets are homes around the Royal Hallamshire Hospital and the two universities, where capital growth is key but “demand is pretty strong,” according to Whitten. Average rental yields are about 5.23 per cent, up to 7.49 per cent in the city centre, according to RWInvest. Also consider family areas such as Arbourthorne and Norfolk Park in southeast Sheffield, Ecclesall for capital growth and Parson Cross, east of the city centre, for bargains.
Houses or flats? Take your pick, but for affordability you can’t beat a new-build studio above a Tesco Express in the Pearl Works on Howard Lane next to Sheffield Hallam University for just £25,000 (rents of £693 per calendar month advertised), up for auction June 27 (Auction House).
Newcastle
“The thing about Newcastle is that it does have this feel of being an island,” says Whitten, who has lived and worked there. “It’s slightly detached geographically, north of Leeds, beyond the dales and the moors, and before you get to Northumberland. It’s perhaps why it slightly falls off the radar.” Nevertheless, the Toon is fast establishing itself as the North East’s tech capital, with the 24-acre city centre Helix science and business park reaching full capacity two years after opening. The property investment company SurrendenInvest says residential values in Newcastle city centre are 14 per cent lower than in Manchester or Birmingham, but in 2021 there was a 12 per cent year-on-year increase in demand for rentals.
House or flat? The three-bedroom penthouse in Hadrian’s Tower is up for auction at £995,000 (Knight Frank) on July 7. It’s tenanted until April 2023 at £4,500 pcm.
Also consider
Bradford, West Yorkshire
Millions of pounds is being spent on city centre regeneration in the newly anointed City of Culture 2025. “It gained a poor reputation due to the riots in 1995 and 2001 and it has struggled to recover from that, but things have changed and there is definitely a buzz here now,” says entrepreneur Nathan Priestley, who has recently converted a former woollen mill, Conditioning House, into 153 flats (from £95,000), office space, a gym and a café.
Stockport, Greater Manchester
Just 15 minutes from Manchester Piccadilly on the train, with a lively town centre, Stockport is a good place to put your money if you are seeking medium to long-term capital growth. There’s a number of interesting developments in, including Capital & Centric’s £60 million conversion of the 19th-century Weir Mill,
next to the River Mersey, into 253 flats.
Lancaster and Morecambe, Lancashire
The new Bay Gateway Link Road improving access to the M6 has brought fresh interest to the seaside resort of Morecambe, which hopes to become the home of Eden Project North, a £125 million eco-attraction, if government funding is agreed, and its nearest city, Lancaster, five miles away with its university, castle and cobbled streets. Average monthly rents in Lancaster are £984, says home.co.uk, and £618 in Morecambe, where average properties cost £171,717, according to Rightmove.
Peterlee, Seaham, and Hartlepool, County Durham
John Paul, the chief executive officer of Castledene Sales and Lettings, and non-executive director at Propertymark, based in County Durham, recommends former colliery towns and villages such as Peterlee, Seaham and the better parts of Hartlepool — in Elwick Road, Ward Jackson Park, the average price for a terraced house is £86,250, according to Rightmove.
Warrington, Cheshire
Warrington was crowned the best place to live in the UK last year by RM Mortgage Solutions after it ranked 181 of the largest towns and cities across the UK on how attractive they were to people looking to relocate. It is affordable, too, with an average monthly rent of £861, according to home.co.uk. Warrington is a “sleeping giant coming alive”, says the estate agent Laura Aspinall from Leaders Romans Groups.
Preston, Lancashire
Preston is emerging from the shadow of Manchester and Liverpool with its own university, UCLAN, and a confirmed stop on the HS2 route. “Preston is one of the UK’s fastest-growing cities,” says Ronald Garrett, the managing director of Alliance Investments. “It is the third-largest in the northwest of England, with plenty of room to grow thanks to billions of pounds of investment.” It has a strong rental market, with an average monthly rent of £1,127, according to home.co.uk.
Scarborough, North Yorkshire and Bridlington, East Riding of Yorkshire
There are distinct opportunities in each seaside town; much needed family homes in Scarborough, where average rents are £963 a month against an average purchase price of £180,977, representing strong yields if not spectacular growth. In Bridlington there is potential to cash in on the staycation boom and add capital growth.