Buy To Let yields and capital appreciation show sharp North-South divide

The north of England is outperforming the south when it comes to yields and capital appreciation, a new survey has discovered.

In the North, the average house price has increased from £205,875 in May 2022 to £211,392 in May 2023. This marks annual growth of 2.7 per cent 

In the South, however, the average price has grown from £385,719 to £388,917; annual change of just 0.8 per cent.

In fact, the top four performing regions over the year have all been in the North. 

The North East leads the way with growth of 4.0 per cent followed by the East Midlands (3.4 per cent), North West (2.7) and West Midlands (2.2).

The best performing Southern region is the South East with growth of 1.5 per cent.

The North-South divide is much more mixed when it comes to changing rent values over the past year.

In the North, the average rent value has increased by 8.7 per cent, from £759 per month to £824. Annual growth in the South has been even more impressive, with rent values rising by 9.5 per cent from £1,255 per month to £1,374. 

The strongest regional growth has been recorded in London (12.5 per cent) followed by the West Midlands (10.8 per cent) South East (9.7), North West (9.5), and East of England (8.9); a fairly even split in North and South performance. 

Despite the even split between North and South for rental values, when it comes to current average yields, the North once again leads the way. 

Across the North, the average yield is currently 4.7 per cent while the South stands at 4.2 per cent. On a region by region basis, the North dominates the South. 

The strongest yields are found in North West (5.5 per cent) and Yorkshire & Humber (4.9 per cent). London boasts yields of 4.7 per cent as does the North East, followed by the West Midlands (4.4 per cent).

The analysis was by Sourced Franchise.