More buy to let landlords are applying for mortgages in the Northern regions of England although the highest number still come from London even although rents and yields are falling in the city, new research has found.
The proportion of new buy to let loan applications from the North has grown significantly year on year in the first three quarters of 2017, according to the study from Commercial Trust Limited.
Applications from landlords in the North East have increased by 77.6%, followed by Yorkshire and the Humber with a rise of 73.2% and the North West up by 24.8%.
The number of applications also increased from landlords in the South East with the region seeing its share of the overall total rise by 17.3% but in London applications fell by 25.4% compared to the same period of last year.
‘There has been a resurgence in buy to let activity in the North of England, with the North East, Yorkshire and the Humber and the North West all showing healthy growth in buy to let activity,’ said Andrew Turner, chief executive at Commercial Trust Limited.
‘With property prices typically cheaper and a strong demand for private rental homes from a workforce in regenerated cities and from thriving student populations, there is plenty of incentive for those looking to invest in property, to look North,’ he explained.
He pointed out that the latest Your Move Index confirmed that the North East and the North West deliver the best yields for buy to let landlords in England and Wales, adding to the attraction for landlords.
‘However, our latest data also shows that London and the South East continue to play an enormous role in purchase applications nationally, but that as two distinct regions, we have seen the South East close the gap on the capital during the first three quarters of 2017,’ said Turner.
He believes that this may well be in part down to the impact of the 3% stamp duty surcharge on second homes which came into effect in April 2016. ‘With property prices typically more expensive in London, the stamp duty levy is often significantly more, so perhaps landlords are casting their net further afield,’ he added.
Turner also pointed out that other research shows that tenants in London are looking to move a little further out, preferring to pay less rent and commute into the city. ‘That said, the volume of business in London and the South East remains robust and demand dictates that this remains a buoyant market for both regions,’ he concluded.