Buy To Let Investors Say Bye Bye To London

The buy to let market in the UK was a buoyant one for some time, but recently tides have turned and the face of the market is now changing significantly.

With government implemented tax changes impacting on buy to let landlords and the uncertainty surrounding Brexit, the levels of buy to let investment have seen a drop. However, this drop varies around the country, with London appearing to take the biggest hit.

Investment Decrease In London

The figures from recent mortgage data shows that in the first quarter of 2017 only 1126 buy to let mortgage agreements were put in place for London, compared with around 2500 in 2014 and 2015. With a drop of around 50%, it is clear that investors seem to be deserting the capital, but where are they going?

Investing In Manchester

In 2017 there were 840 buy to let mortgages agreed in Manchester, which seems to show that a number of London’s investors are heading north. Manchester has developed several new residential areas of late and with the BBC relocating to Salford, it has made the Manchester area a popular one. An ever-growing student population and attractive rental yields also prove to be popular with landlords, adding to the buy to let market in Manchester further.

The King In The North

Whilst Manchester is taking the largest share of London’s runaways, Liverpool and Birmingham have also benefited from the city’s buy to let demise. However, it is hard to tell whether this is a long-term trend or simply a blip in the London property investment market. The results of the Brexit negotiations are likely to be a big deciding factor in this, and so perhaps only time will tell.

With the previously guaranteed London market now looking more uncertain, landlords are being driven to areas that offer more attractive rental yields instead of capital growth, which are typically found in the north of the country. Whilst the growth in the value of your investment is also an important long-term factor, many look for a rental yield that will cover their ongoing costs and leave them with a regular profit.

Whilst the government appear to have targeted the buy to let market, this may all change when the politicians start looking for votes once again. It may be that the massive deficit in new build development will leave the government looking for private equity further down the line.

When buy to let investors look for their next opportunity, there is now more choice to be had where location is concerned. Whilst London still offers many landlords plenty of positive prospects and profits, it is now possible to look further afield in order to find property that will make them money. Consider your long-term strategy and determine whether capital growth or rental yield will be the most important factor in how you want to make money from your investment, and whether you prefer smaller short-term gains or want to play the long game.