Buy-to-let investors are focusing on Stockton-on-Tees
Stockton-on-Tees has seen the highest increase in rental demand year-on-year than any other location across the UK, according to Zoopla.
The property website delivered 75 per cent more rent leads to its letting agent clients here over the last 12 months, crowning the North East market town as the number one buy-to-let hotspot in terms of growth.
Landlords in Stockton-on-Tees are currently achieving an average yield of 5.8 per cent on two-bedroom homes, which is 1.5 per cent higher than the average yield registered across London and South Eastern markets, whilst the national average sits at 4.9 per cent.
This strong yield, coupled with an average house price of just £160,700, has created a surge in investors who have shifted their focus from London and the South East to more affordable markets.
New rental instructions are up 6 per cent over the last 12 months.
Zoopla reports that landlords are typically snapping up houses rather than flats in the market town to attract families.
Elizabeth Williams, branch valuer of Pattinson, said: “We have seen a significant uptick in buy to let investors looking to purchase in Stockton-on-Tees, so much so that we deal with enquiries of this nature on at least a daily basis.
“Previously, these investors bought properties and flipped them for a profit, but now there is a 3 per cent levy on stamp duty land tax on second homes and yields are stronger here, so letting these properties is a much more attractive prospect.
“These investors are predominately looking to purchase three-bedroom terrace houses. This is likely due to landlords wanting to attract families rather than young professionals as tenants, as the former typically prefer longer term contracts which offer a more stable income to the investor.”
Zoopla analysed the number of leads it delivers to estate agents in over 370 local authorities to identify the areas of the country currently experiencing the highest increases in demand from tenants.