More investors switching to property

Simon Donohue

Yields in the North West have now reached 7.2%, resulting in many investors moving away from traditional savings plans, according to a new report from property investment company Select Property.

The Wilmslow-based company says buy-to-let investments are becoming increasingly popular in the UK as the struggling first-time buyer market boosts rental demand and high occupancy rates.

Figures from The Council of Mortgage Lenders demonstrate the strength of the UK buy-to-let market as the amount of money borrowed by buy-to-let landlords in Q1 2013 has increased 12.9% to £4.2bn since Q1 2012.

The appeal of buy-to-let investments is easy to understand as LSL Property Services has announced that the average rental yield in the UK for April 2013 was 5.3%, a figure far higher than alternative asset choices such as stocks and shares.

The North West has been identified as the most successful buy-to-let market, with yields up 0.4% since 2012 and rents up 1.4% in the same period to £568 per month.

HSBC has highlighted Manchester as a good city in which to invest as real estate is relatively inexpensive.

Property size also affects yields and in its April 2013 Monthly Lettings Index, Countrywide identified that one-bedroom properties have been the most successful, typically giving yields of 6.8% – a 1.1% increase in the last 12 months.

The hunt for the best return is also prompting investors to look at new avenues, with student accommodation becoming increasingly popular as it can produce yields as high as 9.6%, nearly double the UK average.

Director of Select Property, Giles Beswick, said: "As a North West-based investment property company, it's great to see the strength of the local buy-to-let market.

"With new opportunities like student accommodation emerging, and the North West having the biggest student population in Europe, the buy-to-let trend in the region is one that is sure to continue."

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