The Northern England housing market outperforms the South for both capital appreciation and rental yields, research from Sourced Franchise has revealed.
Sourced Franchise analysed annual changes in house prices, rental values, and rental yields for all regions of England to see if the country’s North or South is putting in the strongest housing market performance.
In the North, the average house price increased from £205,875 in May 2022 to £211,392 in May 2023. This marked annual growth of 2.7%.
In the South, however, the average price grew from £385,719 to £388,917, an annual change of just 0.8%.
The top four performing regions over the year were all in the North.
The North East led with growth of 4%, followed by the East Midlands (3.4%), North West (2.7%), and West Midlands (2.2%).
The best performing Southern region was the South East, with growth of 1.5%.
The North-South divide was much more mixed when it came to changing rent values over the past year.
In the Northern housing market, the average rent value increased by 8.7%, from £759 per month to £824.
Annual growth in the South was more impressive, with rent values rising by 9.5%, from £1,255 per month to £1,374.
The strongest regional growth was recorded in London (12.5%), followed by the West Midlands (10.8%), South East (9.7%), North West (9.5%), and East of England (8.9%); this was a fairly even split in North and South performance.
Despite the even split between North and South for rental values, when it came to current average yields, the North once again took the lead.
Across the North, the average yield was 4.7%, while in the South it was 4.2%.
The strongest yields are found in North West (5.5%) and Yorkshire & Humber (4.9%). London boasted yields of 4.7%, as did the North East, followed by the West Midlands (4.4%).
Chris Kirkwood, director at Sourced Franchise, said: “There has long been a disparity between England’s Northern and Southern housing markets.
“But historically, the common narrative has been a booming South and a struggling North.
“Our latest analysis proves that when it comes to property investment, it simply isn’t that black and white.
“The North is now outperforming the South on multiple fronts and is, in many ways, now the driving force of positive growth.”
He continued: “For property investors, the North now offers much better opportunities.
“Not only are prices significantly more affordable than the South, making it the more accessible market, but returns are also markedly stronger.
“Much of this is being driven by a shift of national focus away from London and towards cities such as Birmingham, Manchester, Liverpool, and Newcastle.
“We’re seeing major businesses move north from the capital, including the likes of Channel 4 and the BBC, and we’re also seeing young families escape the claustrophobic prices in the South for the more accessible markets up North.”
Kirkwood concluded: “We fully expect this pattern of Northern dominance to continue into the foreseeable future.”
