Exploring the Lucrative North East for Property Investments
When it comes to identifying regions that offer lucrative buy-to-let property investment opportunities, two key factors come into play: low purchase costs and high rental demand. The North East of England stands out as a prime example of a region that excels in both aspects, consistently ranking among the top choices for property investors across the UK. This article delves into the reasons why the North East is a highly attractive destination for property investments, supported by recent figures and data from reputable sources.
Low Purchase Costs
One of the primary factors that contribute to the North East's appeal to property investors is its low purchase costs. The average house prices in the region are over £150,000 less than equivalent properties closer to the capital. This significant price differential allows investors to acquire properties at a more affordable rate, maximizing their potential for returns on investment. With a lower entry barrier, both seasoned investors and newcomers find the North East an accessible market for property acquisitions.
High Rental Demand
In addition to low purchase costs, the North East boasts a strong and consistent rental demand. According to the Association of Residential Letting Agents (ARLA), demand for rental properties in the region experienced a remarkable 17% surge between January and February of this year. This increase in demand highlights the desirability of the North East as a place for individuals and families seeking quality rental accommodation. Property investors can leverage this high rental demand to secure steady and reliable rental income streams.
Rental Yield Growth
Recent figures released by the National Landlords Association provide further evidence of the North East's thriving property market. Over the past year, rental yields across the North have grown by an impressive 4.8%. This substantial increase in rental yields indicates the region's potential for generating attractive returns on property investments. As rental prices rise, investors stand to benefit from the appreciation in property value and the accompanying rental income growth.
Growing Investor Interest
The positive trends in the North East's property market have not gone unnoticed by existing landlords in the region. The National Landlords Association reports that the proportion of landlords looking to expand their property portfolios within the North East has doubled to 19% compared to the previous year. This increase in investor interest is a testament to the region's appeal and the confidence investors have in its potential for long-term growth. The growing investor interest further reinforces the North East's position as a top choice for property investments.
Apart from low purchase costs, the North East offers a significant affordability advantage compared to other parts of the country, especially when considering rental costs in relation to incomes. The Office for National Statistics (ONS) recently released data revealing that the majority of the North East is experiencing rental costs as a percentage of incomes at 30-year lows. This means that individuals and families in the region can secure quality rental accommodation without the burden of excessive costs. In contrast, the South of England is facing a 30-year high in rental costs as a percentage of incomes, highlighting the North East's exceptional affordability.
The North East of England has established itself as a highly attractive region for property investments due to its unique combination of low purchase costs, high rental demand, and promising rental yield growth. With average house prices significantly lower than those in proximity to the capital, the region offers accessible entry points for investors. The strong and growing rental demand ensures a steady stream of income, while the recent increase in rental yields demonstrates the potential for attractive returns on investments.
Moreover, the North East's affordability advantage, as evidenced by low rental costs in relation to incomes, sets it apart from.
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