A new study released today has shown that Northern cities are overwhelmingly better performers than anywhere else in the UK for buy-to-let properties. Yields, capital gains and tenancy demand are higher in cities like Manchester, Leeds and Liverpool than the likes of London and Southampton by a large margin.
Property Partner, a crowd funding property investment website, compiled the list in anticipation of the new academic year which begins for most in early September. Manchester, for example, is anticipating an influx of up to 100,000 students for Fresher’s Week in early September.
The list is compiled of 86 university towns and cities across the UK and Northern Ireland, ranked by net rental yield in each local property market. The cities of the North East perform best, with Sunderland topping the table (6.9% net yield), alongside Middlesbrough (5.9%), with Newcastle also in the top ten (4.3%).
The University of Salford ranked at number 4 in the list, reflecting the city’s rapid rise to prominence in the property market with the transformation of the Quays area and developments occurring around the city.
Both the University of Manchester and Manchester Metropolitan University follow the University of Salford in 6th and 7th place respectively meaning the cluster dominate the top ten. Manchester is the busiest student city in Europe and this is reflected by annual gross yields of 6.7% for both.
All three have an impressive student population, and rising applications year-on-year mean that the private student accommodation market across the Greater Manchester area is currently booming. Impressive new projects are being undertaken on a regular basis and are providing investors and students with something to smile about as the new academic year approaches.
Despite the gloomy outlook of some economic commentators following the Brexit vote in June, student numbers have increased once again this year meaning that many may struggle to find appropriate living space. As universities struggle to provide enough student dwellings, private investors and companies have been providing solutions to the problem with new boutique buildings.
Manchester and Salford especially are experiencing booms in the property industry as private rental developments are constructed at a rapid rate, attracting businesses, job seekers and investment. This is making the university experiences in the cities much more attractive as graduate opportunities continue to improve.
As A-levels are released today, all North West universities are also expecting an influx of clearing applications which will see an even greater number of first-year students looking for quality accommodation. Universities continue to struggle to provide adequate housing from their own stock, and so private investment has come as welcome relief to the growing issue.
As well as providing good accommodation to the students, privately built student housing is helping to relieve the housing crisis in the worst hit city centres. In many cases, young couples and families are struggling to find housing as landlords opt to provide their properties to students instead. This has led to a shortage of housing stock in many urban city centres.
As Northern cities continue to dominate there is sure to be further interest as strong yields and capital gains entice savvy investors in to the market, providing keen young students with the best housing solutions.