There is no doubt that the coronavirus pandemic has significantly impacted different industries across the country. It is good to see that as restrictions ease and as most of the population gets vaccinated, we can see a transition to normality.
Research shows that despite COVID-19, Manchester has remained resilient for buyers and investors as the property market continues to grow with strong demand for properties.
Best areas for buy-to-let
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According to Aldermore’s Buy to Let tracker, Manchester is ranked as the best buy-to-let area in the UK for 2021 followed by Cambridge and London.
This data was gathered by comparing 50 cities across the UK, considering five different aspects:
- Average total rent
- Best short-term returns through yield
- Best long-term return through house price growth during the past decade
- The lowest number of vacancies as a proportion of total housing stock
- Percentage of the city population in the rental market
With 31% population being private renters, Manchester has one of the greatest rental markets in the country. Rental returns and long-term house price growth performance were key to determine Manchester’s high score.
Studies show a significant rise of 4.1% per year in property prices – Manchester with an average rental rate of £428 per room per month.
Is not a secret that Greater Manchester is getting more attraction for investors, the mixture of cities, small towns and villages and an extensive public transport that connects all these places, gives the perfect balance for both residents and investors with different budgets, says Mark Burnes, director of PureInvestor.
“It’s exactly the sort of balance that could attract modern ‘Covid-19 evacuees.”
Is interesting to see how despite a city from the North of England ranked 1st on the list, most cities in the ranking belong to the south of England, making it the best region for buy-to-let.
Worst areas for buy-to-let
Research has shown that landlords have no interest for buy-to-let in Swansea and Newport area, leading Wales to be the worse region to invest in property.
House price growth for Northern England
The Office for National Statistics (ONS) reported UK property prices rose 13.3% in the year to June – the fastest increase in 17 years. However, this rise was significantly seen in the Northwest of England by 18.6% followed by Wales, Yorkshire, and Northeast of England. Surprisingly, London figures drop down to 6.3% compared to previous years.
According to Zoopla, home prices in the UK have increased 30% since 2007 while average home prices in the country are now at £230,700.
What does this mean for first-time buyers?
There is a good chance to buy a house right now since buyer interest for flats has more than doubled due to a pandemic-driven hunt for space.
However, it is likely that there will be increased competition from first-time buyers since first-time buyer lending is up 25% over 2020.
Millman, M (2021) Best buy-to-let areas in the UK for 2021. https://www.simplybusiness.co.uk/knowledge/articles/2021/01/best-buy-to-let-areas-uk/
Burnes, M (2021) Why Manchester remains a buy-to-let investment hotspot. https://www.propertyinvestortoday.co.uk/breaking-news/2021/3/why-manchester-remains-a-buy-to-let-investment-hotspot
UK Housing Market (2021) Manchester’s housing market remains resilient during COVID-19 pandemic. https://www.buyassociation.co.uk/2021/02/03/manchesters-housing-market-and-job-sector-remain-resilient-during-covid-19/
Peachey, K (2021) Northern English regions drive house price growth. https://www.bbc.co.uk/news/business-58256169
Zoopla (2021) UK house prices hit new high. https://www.zoopla.co.uk/discover/property-news/uk-house-prices-hit-new-high/