Why investors should focus on Northern Property Investment in 2023
From Brexit to a pandemic, the war in Ukraine and a Prime Minister merry-go-round, it’s safe to safe it’s been a tumultuous few years for the UK economy in recent times.
Despite these challenges, UK property investment has consistently proved its worth as a strong investment – and no region has showcased this more than the North of England.
Northern Property Market Overview
According to HM Land Registry’s UK House Price Index England: December 2022, house prices throughout the year increased by 10.3% in England following a 10.7% increase in the year prior. This cumulative increase of over 22% in the last two years is extremely impressive considering the aforementioned external factors as the property market not only weathered the storm but actually soared to new heights.
When breaking this growth down on a regional basis, Northern areas dominated the rankings. According to the data referenced above, the region which saw the highest annual house price growth in 2022 was the North West with 13.71%, followed by the North East (13.23%), the East Midlands (12.85%) and Yorkshire and the Humber (12.33%). Rental growth throughout 2022 followed a similar trend, with the East Midlands, North West, South West and Yorkshire and the Humber all experiencing growth above the national average according to the ONS’ Index of Private Housing Rental Prices.
This impressive growth in the North is forecast to continue in the coming years according to market experts, Savills. In their Residential Property Market Forecast, Savills forecast that the North West, Yorkshire and the Humber and North East are all set to experience a cumulative house price increase of 11.7% in the 5 years to 2027 – with the regions almost doubling the total UK growth forecast of 6.2%.
When looking at the data, it is clear to see the North offers unparalleled potential for capital growth and rental income, but where are some of the leading Northern property investment hotspots that investors should be turning their attention to?
Northern Property Investment Hotspots:
Manchester’s impressive property market has been vastly covered in recent years, but the city continues to be one of the best places to invest in buy-to-let property. Home to a young and growing population that is being spurred on by the countless job opportunities for working professionals in the city, the unwavering demand for property has spurred both house prices and rents up drastically in recent times, something that is forecast to continue for the foreseeable future.
In 2022 alone, prices in Manchester increased by 14.7%, more than 4% above the national average. In 2023, JLL forecasts that house prices will increase by 1.5% – one of the few cities in the UK to increase as the market corrects itself – followed by a cumulative growth of an impressive 19.3% in the 5 years to 2027. Rents are forecast to surpass this in the same time period, increasing by 6% this year and 21.6% in total by 2027.
Manchester is only going from strength to strength, and 2023 is the perfect opportunity to capitalise on this booming market and benefit from the city’s unparalleled capital growth potential.
Another leading force in the North West’s impressive growth in recent times, Liverpool is one of the most exciting cities to both live in and invest in. The city has benefited from significant investment over the last decade, including the £5.5 million Liverpool Waters Regeneration scheme that is currently underway, all of which have completely transformed Liverpool and its property market.
In 2022, prices in the city increase by 14.1%, and JLL forecasts that in the 5 years to 2027, prices will increase further by 11.9%. Rents in the city are also set to increase in the same time period, rising by 3.5% in 2023 before reaching a cumulative growth of 15.9%. Like Manchester, Liverpool is home to a large number of young working professionals as many more make the move to the former Capital of Culture.
Whilst the growth in the city isn’t forecast to reach the heights of Manchester, Liverpool benefits from lower-than-average entry prices when compared to its Northern counterpart and makes for a truly excellent location for investment.
Sheffield is without a doubt one of the driving factors in the transformation of the Yorkshire and the Humber region in recent times, and it’s clear to see why. The city is home to two of the leading universities in the country in the form of the University of Sheffield and Sheffield Hallam University, both of which contribute to the booming student property market in the city. There are over 60,000 students living in the city, the majority of whom are in need of privately-owned student property as the universities continue to struggle with the rising demand for student beds.
The city’s strong student population also massively contributes to the residential market. Sheffield is one of the leading cities in the UK for student retention following graduation, and with house prices rising at extremely fast rates in recent times – 15.5% in 2022 alone – the majority of those who remain in the city after the completion of their studies are in need of a rental property, thus pushing the rents in the city up.
As mentioned earlier, house prices in the Yorkshire region are set to increase by 11.7% in the next 5 years, and Sheffield will no doubt be one of the leading contributors to this impressive growth.
Invest with Knight Knox
Here at Knight Knox, we specialise in the sale of buy-to-let property in the UK’s leading Northern property investment locations, and with almost 20 years of experience in the UK buy-to-let industry, we are perfectly placed to help you find an investment to suit your needs. Get in touch today to find out more!