LendInvest, an online peer to peer marketplace for commercial real estate loans, has published its quarterly research index deciphering the UK property market. According to their data, the UK Buy-to-Let Market, the top rental markets are areas where voters overwhelmingly voted for Brexit.
Reflecting on the EU referendum and its impact on the property markets, Christian Faes, co-counder and CEO of LendInvest, stated;
“It’s very interesting that the top districts for rental yield, which are often found in the North East and North West, voted so overwhelmingly for Brexit. The areas that have seen the best of the recent boom times have generally enjoyed the biggest house price rises, and with that offered the greatest capital gains. Perhaps it is no surprise that they were sufficiently content with the status quo to vote Remain. Areas which have seen far more modest house price rises, appear to have been more disposed to voting for the change promised by Brexit.”
Faes is of the opinion Brexit may create an opportunity for some property investors – particularly experienced ones that will take advantage if housing prices do cool.
“House prices are expected to soften, so some would-be buyers may put off buying. But they still need somewhere to live, which is good news for landlords. What’s more, if house prices do cool as predicted, then investing in property will become even more enticing.”
The LendInvest index tracks changes and trends in landlord rentals and capital gains since 2010. Some of the findings from the quarterly report include:
- Only two of the top 20 local authority districts for rental yield voted to remain in the EU – Manchester and Liverpool.
- Manchester again takes the top spot, with rental yields of 6.8%. However, there is a changing of the guard when it comes to the next best options, with Coventry, Luton and Outer London moving up the table to join in second place, with a rental yield of 5.8%.
- In contrast, only two of the top 20 districts for capital gains – Barking & Dagenham and Spelthorne (Surrey) – voted in favor of Brexit.
The Brexit decision and impact on UK property markets remain an unknown. It will be months, perhaps years, before the UK government settles its relationship with the EU. The uncertainty generates risk but may also create opportunity for savvy investors.