Recently there has been a flurry of articles speculating over the continued rise in London house and rental prices, and the Northeast of England has been sadly neglected. I feel it’s time to look further afield and shift our gaze from the Westminster Bridge area to the Gateshead Millennium Bridge area.
Being the Business Development Manager for the Northeast affords me a valuable overview of the region, allowing me to make some observations on the market. For example, it is clear that the majority of Shawbrook’s business in the area consists of brokers working with experienced property investors interested in expanding their portfolios. The investors tend to focus heavily on specialist buy-to-let products, often refurbishing properties using short-term loans. In particular, they are looking for large single-dwelling properties to convert into multi-unit lets. They want strong returns on rental properties and are drawn to the Northeast in particular because of lower value, strong-yielding housing stock, and a buoyant rental market.
There are large student populations in Newcastle, Durham, Sunderland and Middlesbrough thanks to the universities, resulting in rental property hubs. They create the perfect opportunity for experienced property professionals to invest in specialist BTLs such as Houses of Multiple Occupancy as there is a steady flow of students looking to rent each year.
Shawbrook has a range of products perfectly suited to the high demand for STLs and BTLs in the Northeast and it is this breadth of products, as well as our market-leading pricing, that help to enable our brokers to provide the ideal loan for their clients. Here in the Northeast we see STLs being used for the full range of refurbishment projects, from light work in single dwellings through to heavy refurbishment. In the case of investors who opt for a STL before deciding to retain the property instead of selling it on, Shawbrook has a variety of standard products, making it easy for investors to switch from a STL to a standard mortgage once any refurbishment is complete.
The strong focus in the Northeast on specialist BTLs by property professionals fits well with Shawbrook as we embrace properties such as student lets and HMOs, and don’t limit the number of units in an HMO. We also don’t limit the number of properties we lend on, making us ideally suited to the high volume of investors in the Northeast looking to expand their portfolios.
Another interesting point about the Northeast is that recovery in the commercial property sector is behind the curve of that of the residential sector. Investors are often looking to use STL refurbishment products to gain change of use from commercial to residential. In particular, the Northeast is seeing a trend towards closed pubs with planning permission being converted into residential units.
However, as the economy begins to improve, we can be optimistic that the popularity of STLs and BTLs in the Northeast will continue.
