In June this year, we strengthened our credentials as a truly nationwide lender at LendInvest by appointing a second Business Development Manager in the North of England.
As we continue to complete a growing number of deals outside of London, Sophie Mitchell-Charman joins us at a time of substantial growth for the property market in the North East. As Sophie settles into her role, we caught up with her to gauge her view on the market and the opportunities available to property investors in the months ahead.
Sophie, how does the market in the North East differ from the rest of the UK?
In recent years, we’ve seen a growing interest in the areas surrounding Leeds, York and Harrogate from those wanting a better standard of living outside of the capital. So much so, it’s recently been dubbed ‘The Golden Triangle’ by property investors and estate agents. With a commute of under two hours to London, it’s an area that’s becoming increasingly sought after with commuters. This has prompted a substantial increase in property values, with demand from those in particular looking to purchase family homes on the up.
That being said, it’s no secret that it remains a lot cheaper to buy property in the North East over the rest of the UK. With this in mind, investors are buying property in areas such as Newcastle, Hull and Sheffield at the moment, and benefitting from great returns. This in turn is driving prices to rise at a higher rate than across the South and South East, albeit from a lower starting point.
And how about house prices?
The average house price in ‘The Golden Triangle’ (so Leeds, York and Harrogate) is now as high as £158,000, increasing at the highest rate in the UK, month on month, at the moment. This is still 3 times less than the London average of £480,000, but the rate at which it’s increasing is definitely significant. Outside of the most desirable areas, average house prices in the North East are far lower at roughly £130,000. But again, these continue to rise at a higher rate than the rest of the UK.
What are developers looking for in the North East?
It’s no secret that there’s a critical need for more housing across the UK right now. With this in mind, many are seeing a steady move towards investing time and money in the North. The returns are certainly there and alongside a lot of foreign investment, developers are keen to get on board with the development of the next ‘Northern Powerhouse’. There are many cities that have had little substantial development since industrial times. There are brownfield sites, ready for a complete overhaul to re-invent these cities, and we are already starting to see just such changes occurring in Sheffield and Doncaster.
What are the challenges ahead for the market?
While political uncertainty surrounding Brexit and the future of the UK looks set to continue for quite some time, it is difficult to predict exactly what the future holds for the property market in the North East. Despite this uncertainty, I believe that the area will continue to thrive as house prices here outperform the rest of the UK.
Property prices may not promise to provide investors with a great capital increase compared to other areas of the UK, but the yields are very rewarding and I see more investors buying in the area reflecting this. What’s more, the regeneration of the old, industrial cities of the North East will really start to change the perception of the area and, as development continues, to drive more money to the region.
Interested to learn more about our lending activity in the North? Meet Sophie: