Siemens, for example, a leading global engineering and technology services company, recently invested in the Green Port Hull project to encourage more people to live and work in Hull.
To harness this growth further, the government also recently announced its Northern Powerhouse Strategy, an initiative introduced to enable the government to work with local stakeholders to address key barriers to productivity.
With more businesses in the north getting stronger and receiving support from the government, we expect to see this optimism trickle down to the housing market, creating even more investment in property in this area and huge opportunities for brokers with strong regional ties. In fact, over the last 12 months alone, we have already started to see this confidence in the north really take root.
November’s Your Move House Price Index showed that northern cities are registering hugely competitive house prices compared to their southern counterparts, with property prices in the North East now the lowest in England and Wales at £152,011. Property investors in the region also benefitted from the highest yields in England and Wales, with rental properties typically returning 5.3% during October. The North West also saw higher yields than the national average, with a typical property showing returns of 5.1%.
However, it is not only landlords that have been able to take advantage of favourable market conditions in the north. Borrowers at every stage of the homeownership journey have been able to reap these benefits. In our network, first-time buyers represented 38% of mortgage business in the first nine months of 2016 in the North West. In the North East, we saw an increase of 12% in mortgage applications overall, with first-time buyers representing 27% of this total.
Remortgage activity in the North East also remained strong, increasing by 10% in the first half of the year, with an average loan size of £138,000, up from £121,000 last year. Following the MPC’s decision to cut the base rate to 0.25% in August, the remortgage market across the UK has significant growth potential, making it more important than ever for brokers to speak to their existing clients to ensure the products they are on are still best suited to their individual needs.
Alongside the increase in mortgage lending activity in the north, protection sales have risen by 22% in the North East and 27% in the North West year-on-year, with combined and critical illness products representing 70% of this total. This added uptake is very encouraging and demonstrates a commitment by brokers to help their clients fully understand their debt obligations and how to protect themselves adequately and appropriately.
Despite the mortgage market facing a period of unknowns, it is great to see that the government is keen to invest in northern businesses to support this area’s growth. Within the network, we have always enjoyed strong representation within the north of the country, with some of our most established mortgage and protection firms being based there. That said, we look forward to seeing this representation grow even stronger as we see the Northern Powerhouse truly come to the fore.