Manchester Named as Buy-to-Let Hotspot

Savvy savers are putting their money into property, according to new research.

Figures have shown that the buy-to-let market was worth three billion more between January and November 2014 than over the same period in the previous year—a 34% increase.

The numbers suggest that people are turning to property as an alternative to traditional investments such as bank accounts, probably due to low levels of interest. Indeed, Mark Harris, the chief executive of SPF Private Clients mortgage brokers, said that interest rates were ‘pitiful’, also noting that ‘the resurgence of buy-to-let does have an impact on first-time buyers, with many competing for the same entry-level properties’.

It is good news for those looking to take the plunge into property investment, however, and what is more, figures released by HSBC show that Manchester is no.2 in a list of best places to buy to let, with average annual rental returns hitting 8% at present.

First place went to Southampton, with yields of 9%. Nottingham and Blackpool came in third and fourth place, with Hull, Coventry, Oxford, Portsmouth, Liverpool and Cambridge completing the top 10.

With six out of the ten areas being in the North or Midlands, it seems that the buy-to-let boom is having a positive effect on property sales outside of London, which has long been seen as the investment capital of the country.

Moreover, three of the best buy-to-let towns and cities—Manchester, Blackpool and Liverpool—are in the North West, being a positive seal of approval for property investment in our region.

And the lesser-known let-to-buy market is also taking off. Mortgage brokers are reporting that they are seeing requests for mortgages to buy a second home take off.

Let-to-buy is where homeowners choose to rent out their current property rather than selling it, so that they can move to a new place. It is a route favoured by people who are struggling to sell a house or who want to keep their existing property as an investment while they relocate.

It is a particularly popular option in London and its surrounding commuter areas as people want to retain their high-value investments, fearing that they would never get back on the ladder in these areas if they wanted to return in future.

Let-to-buy mortgages and their associated costs can be high, however, because lenders see them as being riskier than traditional mortgages, so it’s worth doing your homework before considering this pathway as an option.

Interestingly, it has been found that almost one in five of Britain’s homes are now owned by private landlords, so whether it’s let-to-buy or buy-to-let, bricks and mortar seems to be an increasingly popular—and viable—investment option.

Julie Twist Properties has a long and distinguished history in working with property investors. Whether you’re experienced in property or are just starting out, we can help! Take a look at our New Developments pages to found out more.