I know we have mentioned this on many occasions, but a smart investment in property will return far greater than savings, or even a pension.
However, it is clear that an investment in property will be more work than these options. However, there are now a huge number of ways to invest in property that are less labour intensive, taking loan note investing for example, should that be a better fit for you.
The reason you are here though is because, as we approach the revised Brexit deadline, you should be looking to act on potential investment opportunities. Looking at property, are we still seeing rising prices in the North or should we retreat back to the security of the UK capital?
Comparing rental yields
The main factor to consider when comparing the two locations is the returns on long-let rental yields. Looking first at London, depending on the area, you are looking at returns of between 1.5 percent to 6.7 percent net rental yield. In terms of location within the capital, the highest performing areas are Bexley, Belvedere and Abbey Wood. Interestingly, the lowest performing area was Mayfair.
Looking North, rental yields are still soaring above that of the UK capital. Average rental yields in Liverpool are averaging 8.3 percent, with the highest recorded yields reaching a massive 13.6 percent. Looking to Manchester, rental yields here are also performing exceptionally well, averaging 6.5 percent net rental yield.
The improved rental yields also show no signs of slowing down. Liverpool are currently planning the new development stadium for Everton football club, along with £250 million road infrastructure as part of a £14 billion regeneration project rolling out across the city, we are all but guaranteed to see the city’s economy match this.
This is supported by the increase in students and young professionals moving to the city with increased job prospects and affordable house prices and rental yields. The city is truly representing value for both landlords and tenants.
Manchester is also seeing a rapidly expanding population for largely the same reasons. Migration from overseas and inward migration is at its highest point between these two cities. With improved transport and a track record of development in the city, this also represents a fantastic location with great opportunity.
Capital appreciation playing a part
Forecasts are also predicting high levels of capital appreciation on top of these high rental yields. Property prices in Liverpool alone have risen by nearly 20 percent over the past five years, making the asset itself a profitable investment regardless of rental income. With this trend set to continue, this is a major benefit to investment in these areas.
An investment in property in the North is therefore a great way to receive a stable, passive income. With many catching on to the viability of Northern cities, including overseas investors, you will have to act timely, and do your own research to ensure you are investing in the right areas within these cities.
The case of whether you should invest in the Northern cities as opposed to London is very much an obvious choice in the current economy: Liverpool and Manchester should be the focus of your current property investment search.