Will Leyland, 03 March 2017
Landlords in the Northern regions of England are preparing to be the beneficiaries of a trend where people are choosing the regions over the capital city, London, in greater and greater numbers.
High prices and fewer job opportunities have not been a good recipe for key working demographics across the capital as they look further afield for more affordable living costs and better career prospects. The Office for National Statistics (ONS) recently reported a 25% increase in the number of Londoners aged 30-39 moving out of the capital since 2010. And this pattern is expected to continue, with experts warning that it is starting to change the demographics of the capital and the South East. Overall, there was a net outflow of 30,140 people in their 30s leaving London for other parts of Britain in 2015, according to the ONS.
The figures are stark, and illustrate the types of issues that previously thriving areas around the South East are now facing with a brain drain to the north of the country a real possibility. As a very small snapshot of the problem, the value of an average London home rocketed by 37% over the previous three years, compared with a 16% rise for the country as a whole.
Rises at these levels are simply not sustainable for young professionals and couples, and subsequently people are beginning to realise that they’ll simply never be able to afford to live comfortably across the region.
The total number of children younger than four years old living in London fell by almost 18,000 in 2015, and overall net migration for this age group has risen by nearly 50% since 2012. Migration among children aged five to nine shows a similar pattern. Families, it seems, are having exactly the same issues and are heading away from London in their droves.
This all spells good news for landlords in the North and North West of England as these people migrate to the region in search of affordable accommodation and improved job prospects. House prices and living costs aren’t even nearly comparable and quality of life in the wetter half of the country is just as good.
As the new tax changes and the ban on letting agents’ fees approach, it has become clear that there is a huge opportunity for savvy landlords who are able to make the most of a fat-trimming exercise across the sector.
Many older landlords are now said to be considering shrinking their portfolios considerably rather than face the hassle of having to re-evaluate. This, in turn, presents an opportunity for those willing to pick up the slack and offer accommodation for a new generation of renters whilst rents continue to increase and capital gains stay healthy.
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Will Leyland, 03 March 2017