Property investors and developers often look at buy to let hot spots to determine the best place to purchase an investment country – but they may not be where they believe.
Home prices and rents are at the highest in London and the South East, but besides the special case of the capital, buy to let has made the greatest inroads north of the Midlands.
Central London is a special case because renting has always been more popular than home ownership simply because of the cost of buying in the prestigious City and West End has always been prohibitive for ordinary workers.
Outside of the capital, according to a study by think tank the Resolution Foundation, Greater Manchester is the renting hot spot in England.
In April 2003, home ownership peaked at 73% of properties, but has slumped to around 57% now, from analysing figures in the recently published government English Housing Survey.
Although Greater Manchester has seen the largest collapse in home ownership, Tyne and Wear has the highest level of rented homes at just over 43%.
Three other regions have less than 60% of home ownership – Outer London, which peaked at 72% in October 2000; South Yorkshire, hitting an ownership high of 68% in October 2005 and the West Midlands, which posted a high of 71% in April 2005.
On average, the housing survey shows buy to let has spread to 19% of all homes in England, but the levels for the northern cities and West Midlands are much higher.
“The area with the sharpest drop in ownership over recent years is Greater Manchester. Ownership there has plummeted 14 percentage points from its peak in the early 2000s,” said Stephen Clarke of the Resolution Foundation.
“Fewer than six in ten households living in the region own their own home today – a similar level to the London suburbs.
“Double digit falls in home ownership have also been experienced in South and West Yorkshire, driven by Sheffield and Leeds, and the West Midlands Metropolitan Area.”