Peer-to-peer lending platform Invest&Fund is urging investors to ignore the North-South divide by seeking exposure to property development projects across the country.
While recent data has highlighted regional disparities in house price growth and decline rates, the platform points out that the UK housing market is a multitude of independent markets that are subject to different forces.
For example, Nationwide data showed there was a four per cent rise in property prices in Northern England versus a 1.7 per cent decline in the South during the first quarter of 2024. The data also showed the average home price fell 0.2 per cent from February to March, to £261,142.
“The initial answer people will land on is that property prices in the South have become overheated; Hamptons International, in their rental forecast research, indicated that rental yields are now more attractive to property investors in the North East and North West,” the platform wrote in a blog post.
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Meanwhile, the purchase of buy-to-let properties in London has fallen steadily for more than five years, which Invest&Fund suggests may indicate that opportunities are located elsewhere.
It also pointed to a severe shortage of land that is available to build on in the North West. According to a recent CMA study, 53 per cent of the land is protected and there are few opportunities to increase supply, which may start to drive prices of regional homes up.
“To return this piece to some semblance of an argument, diversification in our asset class is crucial for mitigating risk and maximising returns. The developers and businesses we support span the length and breadth of the country for a reason,” Invest&Fund noted.
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By spreading investments across different locations and markets, it protects investors against fluctuations in any single area or sector.
“This strategy reduces exposure to micro-market-specific downturns, economic volatility, or local authority changes,” Invest&Fund concluded.
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