New research predicts that northern regions of England will see many of the best investment opportunities in 2023.
It is also these areas that currently have the highest yield on rent, making 2023 the year to snap up property in the North East, North West and Yorkshire for buy-to-let landlords looking to achieve both short and long-term return on investment.
Currently the North East of England takes the top spot for rising house prices, increasing at a rate of 17.3 per cent this year, compared with London at 6.7 per cent. The rental yield on property in the North East is also the highest, with Newcastle at 10.10 per cent compared with just 2.3 per cent in London.
The research – from property insurance service Quotezone – has predicted the top three areas that will be most desirable for buy-to-let landlords looking to invest in the UK property market over the next year.
Taking the top spot is the North East of England, with a house price increase of 17.3 per cent. Demand for rent is high in this region as hybrid-working continues to make central cities less crucial for workers, and push renters towards larger property options with rural, coastal or riverside locations.
Although the average property price in the North West is just shy of £165,000, research shows increases are currently sitting at 16.1 per cent. What makes this area even more attractive to buy-to-let investors is the 400,000 university students that will descend on the core cities each September. With high demand comes even higher rental yields in this region as Manchester currently sits at 9.8 per cent.
Yorkshire’s popular and picturesque countryside has frequently been voted top in the UK’s ‘best places to live’ guide thanks to the great lifestyle the nature, culture and festivals have to offer its inhabitants. In 2021 Yorkshire house prices jumped to their highest in decades and in 2022, research suggests prices are currently rising at a 15.1 per cent rate, with a yield of 9.2 per cent.
Quotezone founder Greg Wilson says: “As property prices slow in London, buy-to-let landlords should look to areas like the North East, North West, and Yorkshire when trying to maximise their return on investments. These areas are booming, and as more people flock to the north, there’s little sign of it slowing down.
“Although the buy-to-let market has been gathering pace, it’s wise to beware of recent pressure from tax increases, interest rate spikes and EPC reforms – which will require some landlords to make costly energy efficient updates to their property.
This will contribute to a squeeze in landlord income, so it’s essential that they take all the necessary precautions such as insurance, to help avoid any additional unexpected costs. Policies that include rent guarantee insurance can also cover them if a tenant stops paying their rent.”
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