Buy-to-let mortgage sales in the region are up 210% during the first two months of the year at CHL, compared to the same period last year. The lender says the rise in the North is down to the comparatively higher yields in the region. While property investors in the South of England, on average, are operating with yields of 5%, those in the north are enjoying yields of at least 9%.
James Bickers, CHL Business Development Manager for the North of England, said: “Buy-to-let activity is rocketing in the North - especially in growth areas such as Liverpool, Newcastle and Leeds. The yields are attracting property investors to the region, particularly from the south where rental yields have reduced. Investors are also finding that capital growth up North is much more attractive than elsewhere.”
CHL predicts that the area will continue to be a hotspot for residential property investors as long as the rental yield and capital growth differential between North and South of England remains so high. The buy-to-let and self-certification specialist now reports that half of all of its buy-to-let purchases are made outside the South of England.
Mr Bickers added: “First-time buyers are being priced out of the market in the North - as previously they have been in the South - providing a new strata of tenants for buy-to-let landlords. In the past they would have bought. Now they can’t afford to, so they are renting. We expect the North to continue to be popular over the next couple of years, given the combination of yields and the faster capital growth.”
