North of England hotspot for second home purchases by investors

The North of England has seen a surge of investors buying second homes compared to the rest of England.

According to estate agents Benham and Reeves, buy-to-let landlords are targeting these regions in search of better yields.

Benham and Reeves analysed the volume of additional dwellings purchased between the 2020-21 and 2021-22 financial years across England.

Strong rental yields

Across the country as a whole 19.5% more second homes were bought, with transactions rising from 230,900 between April 2020 and April 2021 to 275,900 between April 2021 and April 2022 – as the country recovered from the pandemic.

Between the two financial years purchases of additional dwellings soared by 27% in the North East, from 11,500 to 15,000.

They rose by 26% in the North West, from 34,400 in 2020-21 to 41,900 in 2021-22.

Both areas are known for having stronger rental yields, in part due to relatively affordable house prices in cities like Sunderland, as well as growing economies in places like Liverpool and Manchester which are popular with property investors.

Strong capital growth

Director of Benham and Reeves, Marc von Grundherr, said: “Making strong returns as a second home investor is no longer a guarantee, so it appears that more are prepared to look further afield by purchasing homes in the regions where yields are stronger due to the lower initial cost of purchasing a property.

“Manchester and Liverpool have been popular for some time, though growing interest in North Eastern towns like Hartlepool and Middlesbrough has been aided by low house prices.

He added: “Elsewhere there’s consistent activity in the South East and London, which tend to attract strong capital growth and so are always likely to have a steady flow of activity, even in more subdued times.”

Most purchases took place in the South East

Within the North East affordable towns such as Hartlepool and Middlesbrough saw the biggest increases in activity, where additional purchases soared by 31%.

While every region saw an influx of activity over the period, the lowest growth area was the East Midlands, where 16.9% more second properties were purchased, from 19,500 in 2020-21 to 22,800 in 2021-22.

Other regions with lower growth were the East of England and the South West, at 17.4% and 18.2% respectively.

Aside from the North West, the most purchases took place in the South East, at 41,900, followed by London, at 41,800.

Share This Article