The Ultimate Buy-to-Let Guide: Part Three

The Ultimate Buy-to-Let Guide: Part Three

Where to Invest?

The housing market had a fantastic start in 2020 and, despite COVID-19, there has been no real let up with buy to-let investors taking advantage. Rightmove figures show that average asking prices are rising at the fastest rate ever recorded at this time of year. Meanwhile, the 2019 UK Cities House Price Index from Hometrack and Zoopla confirmed the growth.

“When looking at the information, it’s apparent that not all regions are growing at the same rate” says Stuart Marshall. “If you take London – and the South of England in general – you’ll see that they performed poorly compared to a number of key Northern cities. In fact, London saw increases of only 1.9% – less than half the national average.”

In contrast, the biggest Northern cities grew far above average. Manchester saw the most growth with a 4.5% year-on-year increase in house prices, following business growth of 41% over the last five years. A growing population pushing up demand for property has made it the best performing city in the UK. According to the latest State of the City Report from Manchester City Council, 5,000 more people will move into the city centre every year until at least 2025.

“More recently, the North West has been the go-to area when looking for a buy-to-let mortgage in the UK” continues Stuart Marshall. “This is mostly due to Liverpool and Manchester which offer all three of the criteria for strong investment: high rental yields, strong capital growth and high tenant demand. Liverpool takes up six of the top spots in the Totally Money rental yield guide, with rental yields reaching up to 10%. As well as the high rental yields, Liverpool and Manchester have thriving student populations and their vibrant social scenes are continuously attracting young professionals and businesses to move there.” In fact, Manchester now has the highest rate of graduate retention outside of London and this pool of available talent has created opportunities for businesses to relocate to – and expand in – the North.”

The North West is projected to continue on this trajectory, remaining the top of the pile through to 2024. Savills predicts values in 2021 will jump by 8.5% and 9% in 2022, with total growth of 24.1% by 2024. As well as the obvious attraction of strong rental yields, strong capital growth and high demand, there is also the very appealing factor that properties in the North West are highly affordable compared to other areas in the UK. With all this positivity, the North West is an obvious starting point for foreign investors looking to make a foray into the UK’s lucrative buy-to-let market.

Other UK Investment Options.

When it comes to buy-to-let, Scotland is also on the up. Areas in Falkirk, Glasgow and Aberdeen all make the list of top 25 buy-to-let postcodes for rental yields in the UK. In fact, Falkirk’s FK3 postcode has yields of 9.51% which comes second only to Liverpool’s L1 postcode. Glasgow also offers yields of up to 8.71% and, while Edinburgh’s yields remain lower, the Scottish capital offers high demand and a youthful population which still makes it an excellent candidate for investment. Scotland also looks to be a very strong contender when it comes to capital growth with Savills predicting a growth of 20.1% – the third highest growth rate in the UK.

Wales is also a good option for potential investors. Cardiff offers a solid yield of 7.61% as well as one of the largest student populations in the UK. Regeneration is a key factor in Wales’ solid investment potential. Savills forecasts growth of 17.7% by 2024 for Welsh house prices. As well as this, the growing ‘staycation’ craze means that properties in Wales also have potential strong futures as holiday homes, giving investors options beyond buy-to-let should they change their investment strategy in the future.

Get Advice.

“At Liquid, we have helped UK expats and foreign nationals to obtain buy-to-let mortgages for over 13 years. Recently, we’ve seen the market momentum increase which has been further supported by historically low mortgage rates and the UK’s stamp duty holiday.” The continuing expansion of the mortgage market is another good indicator of a healthy property market. Products are coming into the marketplace frequently to accommodate the needs of varied consumer demand. “We have a panel of over 50 lenders offering every type of mortgage product. However, it’s essential that you lock in the preferential rates and products as soon as you can! In some cases, lenders are taking products off the shelf overnight which can have an impact on your returns. Talking to a specialist broker allows you to access products quickly and without obligation. Most importantly, a broker will efficiently guide you through the process to secure the best buy-to-let rate for your needs and ensure you maximise any investment opportunity.”

Ultimate Buy-to-Let Guide Part One:

Ultimate Buy-to-Let Guide Part Two:

Disclaimer: Please note that Liquid Expat Mortgages has no direct control over the timescales relating to either the processing of mortgage applications or mortgage offers being issued by lenders. Liquid Expat Mortgages has no control of the legal process and CANNOT accept any responsibility nor liability should your application not be processed prior to current Stamp Duty Land Tax rules expiring on 31st March 2021 or any extension of that date.

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