Property investments in the North of England are outperforming the South in terms of capital appreciation and rental yields.
In the North, the average house price has increased from £205,875 to £211,392 in the twelve months to last May – an annual growth of 2.7%, according to research from the property investment platform Sourced Franchise.
In the South, the average price has grown from £385,719 to £388,917 – an annual increase of 0.8%.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
For rental yields across the North, the average yield is currently 4.7% while the South stands at 4.2%.
Property investors up North see profits
The top four performing regions over the year have all been in the North. The North East leads the way with annual growth of 4%, followed by the East Midlands (3.4%), North West (2.7%), and West Midlands (2.2%).
The best-performing Southern region is the South East, with growth of 1.5% in the year to May.
“There has long been a disparity between England’s Northern and Southern housing markets,” Sourced Franchise director Chris Kirkwood says.
“But historically, the common narrative has been a booming South and a struggling North. Our latest analysis proves that when it comes to property investment, it simply isn’t that black and white.
“The North is now outperforming the South on multiple fronts and is, in many ways, now the driving force of positive growth.
“For property investors, the North now offers much better opportunities.
“Not only are prices significantly more affordable than the South, making it the more accessible market, but returns are also markedly stronger.”
The strongest yields are currently available in North West (5.5%) and Yorkshire & Humber (4.9%). London boasts yields of 4.7%, as does the North East, followed by the West Midlands (4.4%).
Table shows house prices, equity growth, ave rent, and ave yields in English regions between May 2022 and May 2023
| Location | North / South | AveHP - May 2022 | AveHP - May 2023 | Annual equity growth | Ave Rent pm - June 2022 | Ave Rent pm - June 2023 | Ave annual rental growth |
|---|---|---|---|---|---|---|---|
| North East | North | £152,650 | £158,779 | 4.00% | £588 | £625 | 6.30% |
| East Midlands | North | £239,175 | £247,242 | 3.40% | £770 | £832 | 8.10% |
| North West | North | £206,283 | £211,790 | 2.70% | £883 | £967 | 9.50% |
| West Midlands region | North | £242,840 | £248,166 | 2.20% | £826 | £915 | 10.80% |
| South East | South | £382,976 | £388,873 | 1.50% | £1,191 | £1,306 | 9.70% |
| Yorkshire and The Humber | North | £202,221 | £204,588 | 1.20% | £761 | £828 | 8.80% |
| South West | South | £320,514 | £323,765 | 1.00% | 1,053 | £1,128 | 7.10% |
| London | South | £521,561 | £525,629 | 0.80% | £1,846 | £2,077 | 12.50% |
| East of England | South | £345,749 | £345,710 | 0.00% | £1,071 | £1,166 | 8.90% |
Source: Sourced Franchise
Rental growth lags in the North
The North-South divide is much blurrier when it comes to rent. In the North, the average rent value has increased by 8.7%, from £759 per month to £824.
The strongest regional growth has been recorded in London (12.5%), followed by the West Midlands (10.8%), South East (9.7%), North West (9.5%), and East of England (8.9%).
Annual growth in the South has surged, with rent values rising by 9.5%, from £1,255 per month to £1,374.
“For property investors, the North now offers much better opportunities. Not only are prices significantly more affordable than the South, making it the more accessible market, but returns are also markedly stronger,” Kirkwood says.
“Much of this is being driven by a shift of national focus away from London and towards cities such as Birmingham, Manchester, Liverpool, and Newcastle. We’re seeing major businesses move north from the capital, including the likes of Channel 4 and the BBC, and we’re also seeing young families escape the claustrophobic prices in the South for the more accessible markets up North,” he adds.
-
Top-quality, rapidly growing European stocks are selling at enticing valuationsTimothy Lewis, portfolio manager at JPMorgan European Growth & Income tells us where he’d put his money
-
Check Your State Pension forecast tool launched to ‘simplify’ filling National Insurance Contributions gapsNews The government claims the online Check Your State Pension forecast will allow people to avoid having to phone HMRC and the DWP
-
Halifax: House price slump continues as prices slide for the sixth consecutive monthUK house prices fell again in September as buyers returned, but the slowdown was not as fast as anticipated, latest Halifax data shows. Where are house prices falling the most?
-
Rents hit a record high - but is the opportunity for buy-to-let investors still strong?UK rent prices have hit a record high with the average hitting over £1,200 a month says Rightmove. Are there still opportunities in buy-to-let?
-
Pension savers turn to gold investmentsInvestors are racing to buy gold to protect their pensions from a stock market correction and high inflation, experts say
-
Where to find the best returns from student accommodationStudent accommodation can be a lucrative investment if you know where to look.
-
Best investing appsWe round up the best investing apps. Looking for an easy-to-use app to help you start investing, keep track of your portfolio or make trades on the go?
-
The world’s best bargain stocksSearching for bargain stocks with Alec Cutler of the Orbis Global Balanced Fund, who tells Andrew Van Sickle which sectors are being overlooked.
-
Revealed: the cheapest cities to own a home in BritainNew research reveals the cheapest cities to own a home, taking account of mortgage payments, utility bills and council tax
-
UK recession: How to protect your portfolioAs the UK recession is confirmed, we look at ways to protect your wealth.
