Insights from various sources reveal a significant trend: London landlords are increasingly swapping the capital for Blackpool, drawn by the region's soaring rental yields and more affordable property prices. This rise has been particularly evident, with data from estate agency Hamptons indicating the proportion of homes bought by London investors has escalated from 4% in 2019 to 9% this year.
Current rental yields are proving to be the main attraction, skyrocketing to near double digits compared to London's diminishing returns. While national yields average around 6.7% based on typical property values and rental incomes, Blackpool offers landlords roughly 10% on certain properties. Stephen Bagdoans, managing agent at Kenricks Commercial, aptly put it: “It’s simple supply and demand. Yields are going up because the Government has been cracking down on landlords. If you're being hit by a stick, you move out of the way.”
The stark difference between the average stamp duty payments for landlords is another factor enticing new buyers. Landlords typically pay £6,816 on average to acquire properties in Blackpool, whereas their London counterparts face astronomical fees averaging £46,633, not including additional surcharges linked to second homes and buy-to-let acquisitions. This disparity makes Blackpool more appealing, emphasizing the practical financial sense behind the migration.
Bruce Haagensen, the chief executive of Newcastle-based advisory service GB Landlords, has witnessed firsthand the influx of London landlords joining his service to grasp the northern rental market's nuances. He described Blackpool as “the big Bed & Breakfast benefits capital of the North West,” highlighting its traditional seaside charm where many properties have transitioned from hotels or boarding houses to homes catering to benefit claimants.
This shift is not merely one-sided: landlords are acknowledging the value they can gain. Haagensen noted, “London landlords look at the numbers, not the locations. They see what they can buy for their money is much more than what they could get for the same amount in London.” The figures reveal opportunities abound, attracting not just landlords seeking higher returns, but also property sourcing companies aiming to provide options to investors.
Despite the prospective gains, not all is straightforward. The looming Labour Renters’ Rights Bill, which is expected to come to fruition next spring, could complicate matters for landlords by abolishing no-fault evictions and extending eviction processes for non-paying tenants. Haagensen emphasized the risk landlords must navigate with such changes on the horizon.
Louisa Sedgwick, mortgage director at Paragon, provided additional caution, reminding investors, “Yields provide a snapshot of a property’s income generation potential, but they don’t reflect factors like capital appreciation or improvements from property upgrades.” She highlighted other operational costs such as management fees and the importance of evaluating the real return on investment.
Despite challenges, the prevailing narrative remains one of optimism for potential investors. The appeal of Blackpool rests upon its combination of affordable property prices alongside lucrative rental returns, setting up what could be the next big trend for buy-to-let investments outside London.
Overall, the growing interest from London landlords reflects broader changes within the property market, driven by economic realities and legislative shifts. The seaside town’s burgeoning reputation may just signal the start of a new wave for those seeking fruitful returns on their real estate investments.
