Affordability and Attractive Yields Boost Northern Mortgage Market

Affordability and attractive rental yields in the Northern Powerhouse cities of Newcastle, Liverpool and Hull have boosted the mortgage market, with growth in buy-to-let (BTL) lending bucking the national trend, according to a recent press release from UK Finance.

The mortgage industry helped as many as 85,000 households buy their first homes in 2018 in the North of England, the highest figure since 2006, says the report.

Healthy labour market and strong rental demand

The increase in BTL lending was driven by lower house prices, coupled with a healthy labour market and high demand in rents, according to UK Finance.

This means that northern landlords were able to achieve higher yields than the UK average. Hull experienced strong growth of 12.8 per cent in BTL lending, with a steady increase in first-time buyers and home movers.

Mortgage lenders also helped 84,900 first-time buyers in the North get onto the property ladder last year, up 3 per cent compared to the previous year, and the highest level since 2006.

The press release from UK Finance also stated that overall, the North saw a greater increase in first-time buyers than the rest of England outside the Midlands, reflecting better affordability in parts of the North. Also, average deposits and income multiples were recorded as being lower than elsewhere in England, especially to those in London, according to UK Finance.

Home movers on rise in the North

The figures on Northern Powerhouse mortgages, released by UK Finance, showed that there were 80,400 home movers in the North of England in 2018, an increase of 1.1 per cent on the previous year, reaching its highest level since 2017. This compares with the overall decline in home movers recorded across the UK as a whole.

Jackie Bennett, director of Mortgages at UK Finance, commented: “These figures show the North of England has a strong and dynamic mortgage market, with lenders helping thousands of first-time buyers onto the housing ladder. This has been combined with a steady increase in home movers, making it easier for buyers to find a property that suits their needs.”

Ms Bennett concluded that the mortgage industry stands ready to work with the UK Government and local authorities, to capitalise on these strengths and help deliver on the full economic potential of the Northern Powerhouse.