Landlord News

London’s Buy-to-Let Pain Becoming Manchester’s Gain, Expert Insists

Rose - August 23, 2017

As London’s buy-to-let and property markets begin to dampen, it seems to be Manchester that’s emerging as the winner for investment.

That’s the opinion of one property expert, who notes that uncertainty has been the order of the day in the buy-to-let market for the past year, at the hands of the Government.

London's Buy-to-Let Pain Becoming Manchester's Gain, Expert Insists

London’s Buy-to-Let Pain Becoming Manchester’s Gain, Expert Insists

2016’s shock Brexit vote, followed by a hung Parliament this year, combined with Stamp Duty hikes, the reduction in mortgage interest tax relief, and imminent introduction of tougher lending criteria for portfolio landlords has created an aura of uncertainty and caution in the buy-to-let market.

Surprisingly, the ever-shining star of London even seems to be fading, with house prices down by an average of 0.6%, while private rent prices sit behind the national 12-month growth rate.

So, have the past 12 months permanently dampened the appeal of the UK’s buy-to-let sector? Should buyers be investing their funds elsewhere? Critics are divided.

Jean Liggett, the CEO of Properties of the World, gives her thoughts: “The uncertainty that the UK buy-to-let market has experienced over the past year has undeniably impacted investor confidence, but it seems to be primarily aimed at London.

“With interest rates remaining so low, investors still see the merit in purchasing bricks and mortar, but those seeking maximum returns in 2017 are increasingly looking at other areas than the capital.”

She believes: “By keeping an eye on regeneration plans and new transport links, it is still possible to find great areas to invest in.”

Indeed, despite splutters in the London buy-to-let market, buoyant activity is still being witnessed in other parts of the UK.

Greater Manchester has become a key destination for property investors and, thanks to its high demand from buyers and tenants alike, the city continues to register a strong house price growth rate of 6.7%.

Liggett adds: “As we have seen the capital’s market decline, other UK cities have stepped up and taken its place. London’s buy-to-let pain has become Manchester’s gain!”

Due to its proximity to both MediaCityUK and Manchester city centre, Salford Quays in particular is leading the way when it comes to buy-to-let growth.

2017 marks ten years since major transformation began in the area, kick-started by the BBC’s decision to move many of its jobs from London to Salford Quays. This £650m regeneration project has boosted the area’s credentials for buy-to-let investment, while Manchester has ascended to one of the top ten buy-to-let locations in the UK.

The latest Land Registry data paints a positive picture for Salford, with an average 5.9% increase in house prices over the past year.

Meanwhile, savvy investors will be watching with glee as news of more top class office space being snapped up is announced, suggesting a thriving local economy and growing rental housing demand.

It looks like Manchester is the place to be! Will you move investment there?