This is being driven by ‘exceptional regeneration projects in the Northern Powerhouse towns and cities. What was once the UK’s industrial and mining powerhouses these population hubs are undergoing substantial transformation into lifestyle-orientated hotspots of retail, education, healthcare, recreation, transportation.

The London ‘exodus’ to the north has also played a significant part in pushing up demand. Accelerated by Covid-19 this general migratory shift of people has seen considerable interest in housing that offers workspace annexes and outdoor open spaces and, at prices that are more affordable than London.

The realisation that work-at-home practices are viable also suggests that this general trend will continue post-pandemic.

Increased investment in the north has also benefitted Yorkshire and the Humber, which delivers average rental yields of 4.33% and a decent average rent of £697.

Scotland, meanwhile, has recorded healthy yields of 4.11%, with an average rent of £687 – significantly higher than London, with the capital reaching yields of just 2.9%.

During 2022, it’s expected that the Midlands and the North of England will show the strongest price growth, mainly driven by their greater capacity for growth – and building on the momentum established by market leaders of BTL investment.

Despite, or perhaps because of, the pandemic, UK house prices have continued to grow strongly throughout this year, increasing by 5.6% in the first six months of 2021, driven by elevated levels of demand – in part due to the stamp duty holiday and also because of changed priorities for many. It’s expected that, by the end of the year, the UK will see prices rise by a total of 9%.

Toks Adebiyi, founder and chief executive of property management company Clooper, said: “Rental yields can change from postcode to postcode, so it is important that landlords conduct thorough research into potential investment outside their current property portfolio locations, to ensure they achieve maximum yields.”

He added: “For example, in Manchester, Leeds, and Birmingham, certain postcodes are hitting yields of between 6-12%, as property prices are considerably lower than the South East. Currently, the average UK rental yield is sitting at 3.63%, so anything over that amount can be considered a high rental yield area.”

He believes landlords considering expanding their portfolio into 2022 have the opportunity to acquire highly profitable properties next year, despite looming interest rate rises and potential issues with finance. The good news, he adds, is that there is an ever-increasing demand for rental properties across the UK.

“Recent research shows that almost 40% of landlords have reported increasing tenant demand throughout the past three months – the highest level since 2016,” he continued.

“A further 18.2% said this has grown significantly, while 20.3% stated they have witnessed slight increases. This is according to a survey of more than 750 landlords carried out by BVA BDRC on behalf of Paragon Bank.”

Source: PropertyInvestorToday