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Property Investment: why the North is outperforming the South

Property investment and house buying aren’t the same thing, so simply looking at house sales statistics doesn’t really give a realistic picture. But performance in the housing market can give strong insights into the property investment market

By Gavin Perrett, Property Sourcing Partner at Prosperitas Property

In this article, p2pfinancenews examines the figures that show that the North/South divide is narrowing in the Uk property market. It looks in some detail at total transactions and demonstrates that the divide is narrowing as numbers of transactions in the North are increasing. However, the total transaction value is significantly lower.

Lower House prices in the North

  • With lower purchase prices, an investor may be able to fund a higher deposit. With an improved loan to value, there may be access to improved mortgage terms like lower interest rates.

  • The savvy investor may even be able to buy more than one property. The table below shows UK Land Registry House Price Index for April 2020. This is the average price.

  • Property investors should be looking for below market value, or off-market properties that could be purchased for significantly lower prices than the averages shown here.

UK House Price Index April 2020: UK Land Registry

Demand for Property isn’t far behind the South

  • What that means is that demand will fuel increasing rental yields. And that’s only good for investors.

  • Housing developments are increasing to keep up with demand. Often a percentage of housing in new developments is sold off-market to buy to let landlords at competitive prices.

Infrastructure Investment is growing in the North

The Northern Powerhouse and Midlands Engine projects mean that there are £billions of investment capital being poured into the North and Midlands. That’s building infrastructure and driving economic growth in manufacturing, engineering, and technology.

So alongside some of the most stunning countryside in the UK, the North is fast becoming a place for people looking for employment in emerging industries and technologies. And that, in turn, means more people, and more money spent in local economies.

The Economic Proposition in the South

London is the economic driver for the South of England, and the service sector is the biggest driver in the London economy. But with the average house price in London nearly £300,000 higher than the North, and £200,000 higher than the Midlands, the investment requirements in London and the associated risk are much higher. That isn’t to say that there aren’t opportunities, but London is an area for experienced property investors. The picture is similar across the South, albeit with lower house prices.

But a major factor for consideration is the economic performance in the South. There is far less investment in large scale regeneration projects, and certainly not much investment in emerging technologies on the scale that is happening in the North and Midlands.

It is true to say that London and the South contribute far more to the UK economy and the Exchequer at present, but an investor is entering what is already a busy, high-value market.

North vs South

So the benefits in the North are:

  • High demand and higher rental yield

  • Infrastructure investment

  • lower house prices

And in the South:

  • Established economies and higher cash return

  • Housing shortage and rising house prices driving rental need

  • Opportunities for HMOs and other types of investment

So it is clear that there are opportunities across the whole of the UK, but considering the cost, the risk and economic security over the next few years, the North is clearly the area that presents the next opportunities for the property investor who is looking to build and develop a portfolio on steady footings.

How can Prosperitas Property Help your Property Investment journey?

Whether you are an established property investor or are just starting out, our aim is to help you build a property portfolio that enables you to achieve financial freedom.

  • We watch the market closely so that we can identify trends and opportunities through analysis and insights

  • Our team will work alongside you to establish the level of investment and risk that you are comfortable with

  • Our cash flow forecasting service can assess your financial position, and trial various scenarios to ensure that not only can you take advantage of the good times, but weather the storms too

  • We’ll recommend suitable properties for you to invest in, and only after they’ve been through our rigorous due diligence process

  • And we add value by providing information, mentoring and masterclasses to help you build your knowledge


Ancojada Limited trading as Prosperitas Consult is not authorised or regulated to provide financial advice.

All financial advice is provided by other regulated businesses.

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