Could average rents in the North be about to soar?

According to the latest data from specialist buy to let broker, Commercial Trust Limited, the popularity of the North West, as a target for property investors from around the UK is increasing.

In stark contrast to the rest of the country, investment in buy to let property in the North West has seen a significant shift in the location of investors over the past couple of years. However, forthcoming changes in legislation could potentially see rents in the North West soar.

In 2015, 40% of investors in the North West buy to let market, lived outside the area.

By the end of the third Quarter of 2018, the number of investors in North West rental property, who do not live in the region, had reached 62%.

Andrew Turner, chief executive at Commercial Trust, commented: “What is interesting about the North West purchases in 2018, is that the new data shows greater diversity in terms of investor location.

In 2015, North West buy to let purchases were dominated by people from four areas. 60% of all purchases were from people within the North West, with 23% living in London and the rest made up of people from the East of England and West Midlands.

Investors living in and investing in the North West have dropped down to 38%, while London has increased to 24%. The East of England represents 11% of investors in the North West and has been joined by the South East, where 11% of these investors are located. In 2015, South Eastern investors simply were not purchasing properties in the North West.

Whilst the West Midlands (5% in 2015) has retained a similar level of investment in the North West, in 2018, investors have also started to appear from the South West, Wales, the East Midland and Yorkshire and Humber.”

Reasons for Investment

The growth in investment in the North West from other areas, can be attributed to a number of reasons.

In April 2016, the Government introduced a 3% stamp duty levy on second homes – and since then, the percentage of individuals who live outside the area, but invest in the North West, has risen sharply.

Turner says: “The introduction of stamp duty has affected investors more acutely, in areas where property prices are higher. In the North West, the impact of stamp duty has been less ex