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The Northern regions are currently observing a considerable uptick in home sales, surpassing levels of activity observed in other parts of England.This trend implies a deliberate focus by buy-to-let landlords on these areas, seeking better returns and favourable opportunities for property investment.
An analysis conducted by London-based lettings and estate agent, Benham and Reeves, examined the volume of additional dwellings purchased across England during the financial years 2020-21 and 2021-22. The nationwide findings reveal a notable 19.5% increase in the acquisition of second homes, with transactions escalating from 230,900 in April 2020 to 275,900 in April 2021, marking the country's recovery from the pandemic.
Venturing into regional nuances, the North East witnessed a substantial 27% surge in second home purchases, ascending from 11,500 to 15,000, while the North West experienced a commendable 26% rise from 34,400 in 2020-21 to 41,900 in 2021-22. This trend is attributed to these areas' reputation for stronger rental yields, driven by relatively affordable housing prices in cities like Sunderland and flourishing economies in Liverpool and Manchester.
Focusing on specific urban centers, both Manchester and Liverpool exhibited significant increases in second home activity. Manchester recorded a 39% surge, with purchases escalating from 3,300 in 2020-21 to 5,100 in 2021-22, while Liverpool experienced a 37% rise, with transactions increasing from 2,900 to 3,700 during the same period.
Conversely, the East Midlands displayed the lowest growth among regions, with a modest 16.9% increase in second property purchases, rising from 19,500 to 22,800 in 2021-22. Other regions with comparatively lower growth rates include the East of England and the South West, recording growth rates of 17.4% and 18.2%, respectively.
Maintaining a consistent trend, the South East and London retained their appeal for second home acquisitions. The South East witnessed the highest number of purchases in England at 41,900, closely followed by London at 41,800. While these regions may not necessarily offer the highest rental yields, their historical reputation for significant house price growth remains a key factor. Some investors prefer proximity to their primary residence, prioritising convenience over yield, thereby contributing to sustained activity in the South East and London.
In summary, the Director of Benham and Reeves, Marc von Grundherr, noted that the landscape of second home investment is evolving. The allure of regions with stronger yields, owing to lower initial property costs, is becoming increasingly appealing to investors. Cities like Manchester and Liverpool have garnered consistent interest, while emerging interest in North Eastern towns, such as Hartlepool and Middlesbrough, can be attributed to their affordability.
For those seeking a second home for personal use, the scenic beauty of the North of England serves as a compelling draw for those with the means to invest in such properties. In contrast, the South East and London continue to attract steady activity, driven by their historical propensity for robust capital growth, even during more subdued economic periods.
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