There has been a significant rise in the acquisition of second homes in the North of England, according to Benham and Reeves. This trend is particularly marked in the North East and North West, outpacing the rest of the country. What is driving this phenomenon, and what does it mean for potential investors?
The Northern Attraction: A Closer Look at the Numbers
Investors are increasingly setting their sights on the North East and North West regions. In the fiscal year spanning April 2021 to April 2022, second home purchases in England increased by 19.5%. Specifically, the North East experienced a 27% surge in additional dwelling acquisitions, while the North West saw a 26% rise.
Why the North?
The appeal of the North can be attributed to a combination of factors:
- Stronger Rental Yields: Cities like Sunderland offer affordable housing prices, which, in turn, result in more attractive rental yields.
- Economic Growth: With economies blossoming in areas such as Liverpool and Manchester, investment potential is on the rise.
- Natural Beauty: The scenic landscapes, including the Lake District in the North West, present a dual allure for holiday home seekers and those wanting a picturesque second home.
Urban Appeal: Manchester and Liverpool Lead the Way
Manchester and Liverpool are spearheading this trend within the North West. Manchester’s second home purchases jumped by 39%, while Liverpool’s increased by 37%. This growth can be credited to:
- Urban Development: Both cities have undergone significant regeneration, making them hotspots for investment.
- Affordability: Compared to southern counterparts, these cities offer more budget-friendly investment options.
The Rising Stars of the North East
In the North East, Hartlepool and Middlesbrough stand out, with additional home purchases climbing by 31%. These towns offer low entry prices for property acquisition, presenting a ripe opportunity for investors.
The Steady South: A Comparison
Despite the buzz in the North, the South East and London maintain a steady pace in the second home market. Here’s why:
- Capital Growth: Historically, these regions have seen substantial property value increases.
- Proximity Preference: Some investors prioritize convenience, opting for properties within a closer radius to their primary residence, despite potentially lower yields.
The Takeaway for Potential Investors
The data presents a compelling narrative for those considering property investment, especially in the North. With the promise of stronger yields and the charm of northern cities, the trend underscores a shift in the investment landscape.