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Strong buy-to-let performance from north and university cities

by: Tim Chen
  • 05/10/2017
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Strong buy-to-let performance from north and university cities
In the last quarter, buy-to-let markets in northern postcodes and university cities are powering away, according to a report.

According to LendInvest’s latest BTL report, four of the top five postcodes are university towns, which also occupy the top three spots. As September ushers in a new university year, the influx of students escalates demand for rented accommodation, and postcodes housing universities have seen a corresponding boost.

Luton maintained its hold on the top spot in the index, supported in part by a booming student rental market and its connection to London. Manchester, which has three universities and a large student population, leapt five places to 3rd from 8th in June. Colchester, home to the main University of Essex campus climbed to 2nd place from 4th.

Hull, another university town and the 2017 UK City of Culture, marked a new entrant into the top 10 – rocketing from 31st to 5th.

The other major theme in the index was the challenge posed by northern towns to the South East markets.

With Manchester and Hull leading the charge, lucrative yields in the North are presenting attractive alternatives to the South East. Driven by excellent year-on-year capital gains, Ipswich entered the top ten at 9th, from 15th in June. While Leeds and Liverpool were both singled out in the report for their continued rental growth and high yields for buy-to-let investors.

The report also highlighted postcodes in the Midlands, which have seen strong growth in rental prices and robust capital gains – with Northampton (11th), Birmingham (12th) and Nottingham (18th) making substantial climbs. Moreover, Birmingham and Nottingham were named two of LendInvest’s ‘markets to watch’ owing to them being popular university cities and boasting some of the highest yields in the country.

LendInvest’s quarterly Buy-to-Let Index Report ranks postcode areas in England and Wales based on capital value growth, transactional volumes, rental yield and rental price growth.

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