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Insight & Opinion

Regional cities now outpacing London for rise in housing demand

Author: Staff

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Property investment in the right geographical area is a key to unlocking success in the market. Investors need to have an eye for picking somewhere to put their money that offers them a good entry price and a decent potential for return, but also one in which there is a strong demand for housing from tenants.

According to a new study into the housing market, there is a shift coming about in this regard across the UK, with investors increasingly looking to the regions when buying new assets.

For many years, London was seen as the place to be for property investors, with its safe haven aura, high levels of demand and potential for strong levels of rental income. However, while we are all accustomed to seeing London help prop up the rest of the market post-recession, it now appears to be slipping slightly, with a drop in demand for housing quite in contrast to the situation seen across the UK as a whole.

Investors and tenants alike are now seeking out properties spread further across the nation, with the report released by eMoov suggesting that demand for homes in the second quarter of the year has risen by three per cent when compared to the three-month period that came before.

However, it’s a different picture in London, where the data shows there was a two per cent fall in demand in the second quarter of the year. In fact, with London excluded, the rest of the UK recorded a rise of some eight per cent in demand in the second quarter of 2016, showing just how well demand has spread across the UK as a whole in recent years, with investors increasingly seeing the value of lower-cost, higher-return assets.

Russell Quirk, chief executive of eMoov, said that there were a number of factors behind this seemingly quick shift away from the capital. “The changes to stamp duty tax brackets for those looking to secure a second home or buy-to-let property seem to have hit the London market harder than the rest of the UK. Despite London tending to drive the UK market as a whole, it would seem for once, it has taken a back seat whilst the rest of the UK has enjoyed upward growth on the first quarter of this year,” he said.

The study showed that the city which is currently enjoying the best levels of demand from investors is Bristol, while Bedford, Aylesbury and Medway come in just behind it, all having seen a swell in demand in recent times.

It’s a similar story further north, with previously unfashionable investment areas such as Newcastle, Durham, Stockton on Tees and Gateshead all seeing substantial rises in demand in the last few months. Across the north as a whole, these join the likes of Liverpool, Manchester and Leeds, cities which have really come into their own in recent years and shown just how having the right mix of factors can make regional cities and towns ideal for investment in a changing marketplace.

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