Overseas investors are homing in on Lancashire after turning their backs on the sky-high property market in London, according to a new survey.
Houses in the county are suddenly looking more attractive than those in the capital due to the rental cash return they offer and the recent changes in stamp duty, say agents Find UK Property.
“London property prices are now very high, whereas rents in the capital have not risen significantly,” explained senior marketing consultant Andy Noble. “The rental yields have thus decreased and are now about three per cent compared with eight per cent in, for example, Lancashire. Additionally many view that prices may not grow much more in London and could even come down a little.
“The changes have meant that our low cost two-bed and three-bed houses in the Lancashire area have become even more attractive to overseas investors, as these deliver amongst the best net rental yields in the UK.
“Our best-selling house costs just £54,995 and delivers eight per cent rental yield. The same two-bed house on the outskirts of London could cost over £275,000 and deliver around three per cent rental yield. Thus, for the price of one house in London, an overseas investor could get five similar properties in the Lancashire area and have double the rental yield of around eight per cent.”
Property experts say the London market has slowed after months of steep price rises because it has reached its affordability ceiling. One estate agent predicts prices in the capital will flatline during 2015, but rise by around 10 per cent elsewhere in the country.