Beyond London: How the North West Is Redefining the UK’s Property Landscape
Forth Action Invest on April 30, 2024
In the UK, an increasingly popular destination for property investors’ is swinging towards the North West. What is it about this region that makes it a beacon for the savvy property investor? This in-depth analysis will provide a detailed answer, charting a course through the North West’s best buy-to-let locations and why they are primed for growth in the property investment market.
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Capital Growth
One of the most compelling reasons to consider the North West is its impressive history of capital growth. Cities such as Manchester and Liverpool have undergone significant urban regeneration, turning former manufacturing hubs into thriving commercial centers. The ripple effect of this rejuvenation is not simply aesthetic; it directly correlates with increasing property values.
In the last decade, the North West has seen an exceptional rise in property values, with some areas experiencing capital growth of up to 45%. This surge is particularly notable in key cities such as Manchester and Liverpool, where the focus on new urban regeneration and employment growth has led to an increase in demand for housing, subsequently pushing up property prices. This trend is a clear indicator of the region’s economic vitality and its potential for future growth, making it a continued hotspot for property investment.
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Manchester’s growing investment landscape
Manchester continues to see ever increasing FDI in the city, as a result we have seen a dramatic change in its skyline, as old warehouses are transformed into luxury apartments and futuristic commercial spaces. The tallest residential tower, the Deansgate Square, and the upcoming St John’s neighbourhood development point to a city that’s forging ahead. Its metropolitan vitality promises more than just sky-high apartments—it means a market that investors from all over the world want to be a part of.
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Bright future ahead for Liverpools property market
Likewise, Liverpool’s resilience and sense of identity have seen a surge in its market values. With its stately waterfront and growing service economy, the city resonates with cultural and commercial vibrancy. The L1 postcode, home to the iconic Liver Building, exemplifies the preparatory steps towards investment growth, with a flourish of buy-to-let offerings. Investment in Liverpool’s commercial sector is also on the rise, providing even more opportunities for property investors.
The Liverpool Waters project also stands as a testament to Liverpool’s forward-thinking approach to urban development and investment. Spanning over 2 kilometers along the city’s waterfront, this monumental project aims to revitalize a vast area of dockland, blending residential, commercial, and leisure spaces into a dynamic urban quarter.
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Rising Rental Yields in the North West
Capital growth is but one part of the North west’s property investment lure; the other key piece is rental yield. Rental yield is calculated by considering the annual rental income compared to the property’s market value, expressed as a percentage. The North West region consistently excels in providing high yielding investment opportunities, frequently surpassing its Southern counterparts. This distinct advantage sets it apart from other UK areas, offering truly profitable long-term property investment options.
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Where to go?
Salford
Salford’s MediaCityUK has become a symbol of this region’s shift towards modern industry, pulling in a significant population of young professionals. The accompanying demand for high-quality urban living has culminated in exceptional rental yields, attracting investors like moths to a flame. The low purchase price combined with a robust rental income is a potent equation for Salford’s to appeal as a lucrative buy-to-let area.
Another compelling aspect of Salford’s appeal stems from its proximity to Manchester city centre. This closeness offers dual benefits for both homeowners and professional renters. For homeowners, it means living in a vibrant area close to a major urban centre, without the premium price tag often associated with city living. Professional renters, on the other hand, are drawn to the convenience of a short commute combined with the leisure and lifestyle amenities that a near-city environment provides, such as villages like Monton & Worsley. This proximity enhances Salford’s attractiveness, ensuring a steady demand for rental properties and supporting strong capital growth prospects.
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Preston
Preston’s affordability is a significant draw for buy-to-let investors. The city’s average property price is substantially lower than the national average, yet its rents remain competitive. With a growing student population and burgeoning tech sector, the future outlook for rental yields in Preston is positive, making it a prime location for those seeking a steady flow of passive income
Preston is currently experiencing a surge in investment, particularly in its infrastructure and commercial sectors, making it an even more attractive location for property investors. The city’s commitment to developments such as the Preston City Deal is a prime example, aiming to create thousands of new jobs, homes, and improved transport facilities.
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Tameside
Tameside also stands out as an emerging hotspot for buy-to-let investors, primarily due to its affordable property prices, commuter links and robust rental demand. Situated in Greater Manchester, Tameside offers a unique blend of suburban serenity and urban convenience, making it highly appealing to both families and professionals. The area’s commitment to regeneration and community development, evidenced by improvements in local amenities and transport links, promises enhanced quality of life and convenience. These factors, combined with the area’s strategic location near Manchester, bolster its potential for capital appreciation and ensure a continuous demand in the rental market.
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Affordability
The North West’s allure isn’t merely in its history of growth or its current profitability; it also boasts a comparatively affordable entry point. Property prices in cities like Manchester and Liverpool are more attainable for first-time or small-scale investors. This affordability enables a wider pool of interested counterparts, ensuring that the market doesn’t become overrun with an overvaluation of properties.
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Warrington
Warrington’s proximity to the major cities of Liverpool and Manchester provides an advantageous middle ground for both property prices and rental yields. This spatial harmony makes it an area that’s steadily increasing in appeal, offering the tantalising blend of initial investment feasibility and future valuation potential.
The demographic landscape of Warrington is witnessing a significant transformation, with its population steadily on the rise. This increase is not just a number; it represents a burgeoning demand for residential properties, bolstering the rental market to new heights. The expanded workforce attracted by the growing industries and the strategic location of the city contributes to an escalating need for housing. This demographic shift makes Warrington an even more appealing spot for investors, indicating a sustainable demand that promises to drive both short-term rental income and long-term property appreciation.
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Blackburn
Blackburn emerges as one of the UK’s premier locations for investors seeking high rental yields. This stems from the town’s relatively low property prices combined with an increasing demand for housing
In Blackburn, a combination of affordable housing and a strong tenant demand, particularly for those looking for quality living spaces within budget, equates to impressive rental yields for property investors. Typically, the town sees rental yields averaging between 8-10%, a figure that is notably higher than what is observed in many other parts of the UK. This high yield percentage is a clear testament to Blackburn’s growing reputation as a prime location for property investment, offering lucrative opportunities for those looking to maximize returns on their investment properties.
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The North West vs The Rest
When juxtaposed against London and the Southern regions, the North West’s buy-to-let market showcases not only its affordability but also its resilience to the price fickleness that characterizes the South. Its solid foundation of growing rental demand and economic diversification is increasingly making it the default choice for those seeking more predictable, long-term returns.
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Big Business and Startups Opting for the North West
The North West is becoming a magnet for big businesses and startups alike, diverging from the traditional pull of the South, particularly London. This shift is driven by the region’s competitive advantages, including lower operational and living costs, and a robust support network for businesses. The North West boasts a vibrant ecosystem conducive to innovation, with tech hubs, accelerators, and incubators providing the crucial infrastructure needed for startups to thrive. For established companies, the appeal lies in the region’s access to a diverse talent pool, fueled by top-ranking universities and a high quality of life. This combination of factors is turning the North West into a dynamic and economically diverse area, offering compelling opportunities for businesses at every stage of growth.
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Beyond the Horizon
The North West’s buy-to-let prospects are as vast and varied, With multiple local and national government initiatives bolstering the region’s infrastructure and economic prospects, the current wave of opportunity for investors shows no signs of ebbing. It is a lucrative property market filled with not only rental income potential but also the alluring horizon of capital growth.
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Navigating the North West—Strategies for Successful Investments
Capitalizing on this potential requires a well-calibrated investment approach. It’s not enough to simply cast your net in the region and expect it to come back full. Investors must understand the local property market dynamics, tenant typologies, and the potential for future development in their chosen area.
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HMO Investments
The demand for Houses in Multiple Occupation (HMO) in cities like Manchester, Liverpool, and Warrington is on a significant upswing. This increase is primarily driven by the growing population of young professionals and students seeking affordable and sociable living arrangements. These demographic groups are attracted to the vibrant urban life these cities offer, coupled with their burgeoning job markets and educational institutions. HMOs, known for their lower individual living costs and communal living aspects, perfectly align with the financial and social preferences of this audience. Consequently, investors are taking keen interest in HMO properties, recognizing their potential for higher yields compared to traditional single-tenancy investments.
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Short-Term Lets
The rise of the gig economy and the increasing preference for travel experiences that offer a more personal touch have notably lifted the appeal of short-term lets in the North West. Cities such as Manchester and Liverpool, rich in culture and history, attract a considerable number of tourists and business travelers alike. Short-term lets, including serviced apartments and holiday homes, cater to this audience by providing flexibility, comfort, and a more localized living experience compared to traditional hotel stays. For investors, this market segment promises attractive returns, especially during peak travel seasons and major events.
With the North West experiencing a surge in development projects, there’s also an escalating demand for flexible housing solutions from contractors and professionals involved in these investments. Major cities in the region, such as Manchester and Liverpool, are not only hubs for tourism and business travel but are also becoming focal points for extensive construction and redevelopment initiatives. This scenario has led to an increased requirement for short-term lets that can accommodate contractors who need temporary, yet comfortable, living quarters close to their project sites.
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At Forth Action Invest, we pride ourselves on being the leading experts in residential investments throughout the burgeoning markets of the North West. We offer our investors unparalleled access and vital insights into the most lucrative investment locations within the region. For those seeking to explore our current investment opportunities, we invite you to visit our website and sign up for an exclusive membership.