• THE VIDA HOMELOANS BLOG

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    It's Different 'Up North'

    Claire Askham - Sales Manager North

     

    As we are getting ready for the festive period, here’s my first blog about the area of the country that I look after - the North - and what I have seen during my first six months with Vida.

    The weather is changing, and it certainly is getting colder in the North, but the mortgage market is still toasty warm!

    Despite a recent report showing that landlords’ confidence is at the lowest level in 7 years, profitability remains strong with the average rental yield at 5.6% and 63% of landlords having more than 1 Buy to Let property¹.

    Speaking with brokers they are telling me that investors are still looking to purchase rental properties in the North.  Rental yields are proving very strong there and investors are currently receiving the best rental returns compared with the rest of the UK.  Whilst low house prices are the obvious contributor to high yields in these areas, this doesn’t tell the full story.

    Landlords who have property in the Yorkshire and Humberside area are more upbeat, with good reason to be as rental yields are on average achieving around 6.1%, delivering £6,279 gross rental income per property and landlords having on average around 8.6 properties in their portfolios². This yield has attracted people looking for rental properties, creating a more consistent demand.  Sheffield is an excellent example of the changing landscape in the North.  Previously known as a city of steel, the decline of industries has resulted in the city becoming more diversified and, along with the influx of students, the rental market has become steadier and more secure for landlords. Similarly, Liverpool has around 70,000 students and this has resulted in many landlords investing in multiple properties or one single HMO while still receiving an acceptable return on their investment.

    With the increased focus on the “Northern Powerhouse” and its improving  transport links, low house prices and growth in students choosing to study here, investors are exploring the North looking for a better rate of return on their property and it may be the best place for your client if they are looking to buy their next Buy to Let.

    We have seen a significant increase in the enquiries received from brokers in this area.  As the market continues to grow in the North, landlords will be looking for more advice which is great news for advisers to ensure that their clients are getting the best value for their money and selecting appropriate properties that will be attractive to the potential rental market.

    Vida can help in these areas with our wide range of Buy to Let offerings including Limited Company, Trading Companies, Day 1 SPV and our new HMOs and MUBs product range including helping customers in the North with a simplified fee structure starting at 1.25% up to 1.50%.

    As well as being an exciting time for you and your clients, this period of growth is a fantastic opportunity for specialist lenders.  Be sure to make good use of your intermediary team who will be more than happy to support you through your more unusual and complex cases.

     

    ¹ Based on 888 NLA members with properties in the UK, BVA-BDRC Landlords Panel Region Snapshot Q3 2019

    ² Based on 67 NLA members with properties in Yorkshire and Humberside, BVA-BDRC Landlords Panel Region Snapshot Q3 2019