North West’s buy-to-let boom driven by outside investors – Commercial Trust

In 2015, around 40% of investors in the North West buy-to-let market lived outside the area, while the number of investors in North West rental property who do not live in the region had reached 62% by the end of Q3 2018, according to the latest report from Commercial Trust Limited.

As an example of this growth, Merseyside-based Bridging Finance Solutions has revealed a 25% increase in turnover compared to the same period last year, a move led by a growing Northern-centric customer base.

Andrew Turner, chief executive at Commercial Trust (pictured), said the new data showed greater diversity in terms of investor location.

He said that in 2015 around 60% of all North West buy-to-let purchases came from people within the North West, 23% from people living in London and the rest from the East of England and West Midlands.

He added: “Investors living in and investing in the North West have dropped down to 38%, while London has increased to 24%. The East of England represents 11% of investors in the North West and has been joined by the South East, where 11% of these investors are located.

“In 2015, south eastern investors simply were not purchasing properties in the North West.”

Reasons for investment

The growth in investment in the North West from other areas can be partially attributed to the stamp duty changes introduced in April 2016.

Since then, the percentage of individuals, who live outside the area but invest in the North West, has significantly increased.

Turner said: “The introduction of stamp duty has affected investors more acutely in areas where property prices are higher.

“In the North West, the impact of stamp duty has been less exacerbated, due to lower house prices.”

At the same time, cities like Liverpool and Manchester have in recent years benefited from significant investment in infrastructure.

House prices in these areas started from a relatively low base compared to other parts of the country, but are starting to climb.

Despite the increase in house prices, buying a property remains more affordable in parts of the North West than elsewhere.