New data from Hometrack has found that while London’s house price growth has slowed to a three year low, Manchester, Salford and Liverpool have recorded the highest house price inflation amongst the major UK cities.
Combined Yields of 10% in Manchester, 12% in Salford and 14% in Liverpool are attracting investors who have been priced out of the South East. The Hometrack data shows that Manchester recorded house price inflation of 8.9% 2016 against a national average of 7.2%.
However, London recorded growth of just 7.3%, its lowest annual rate for more than three years. The other cities recording higher inflation than London were Bristol (9.6%), Oxford (8.1%), Portsmouth (8%), Southampton (7.9%) and Birmingham (7.5%).
According to The Mistoria Group, investors are benefiting from capital growth and excellent leads in the North West, outstripping London.
Mish Liyanage, Managing Director of The Mistoria Group comments: “Lots of investors from the South east and overseas have invested in Liverpool and Salford, buying high-quality properties around the universities. They have also renovated shabby properties with a top-end finish and are experiencing good occupancy rates from students, with year-round demand.
Investors are benefiting from yields, well in excess of 14% within a two mile radius of the three Universities in Liverpool and 12% yields near the University of Salford. These yields are more than double what investors can secure in the South.
London is losing its charm for many investors, with its unaffordable property and low yields. Historically, investors have benefited from strong capital growth in the City, but even this is slowing.
With Salford and Liverpool prices rising faster than any other cities, there’s never been a better time to buy. With low interest buy-to-let mortgages and a weak pound, UK and overseas investors can secure a low cost property, high-yielding property. For example, investors can acquire a high quality, three bed HMO which will house students, from £120,000 upwards. The return on investment is very attractive too, with 13% (8% cash rental and 5% capital growth).”