The North and South of England, Spilt by More than Property Price
North and South Divide
Whether you are comparing property, quality of life or accents, there is a clear difference between the North and South of England.
The divide is described visually as a line cut across the UK from East to West diagonally, but this is debatable. The actual divide refers to the social, economical and cultural differences which separate the UK. (1)
For property investment, understanding the difference between the locations can help you make an informed decision on your next investment.
1 Million Pound Properties
The chart below shows the difference in property prices around the UK: Source: Land Registry, England and Wales, August 2015(2)
The chart shows that there is almost a £400,000 difference between the average house in the North West of England compared to the capital. This means that you could buy 4 houses in the North of England for only one in London.
In 2014, 4,259 properties sold in London for over £1million. According to recent statistics, one in every five sales of million pound properties in the UK were in a London borough. (3)
A recent Channel 4 series ‘Million Pound Properties’, highlighted the dramatic difference between what you can get for £1million in the capital compared to other parts of the UK. A 1 bedroom basement flat, a stone's throw away from Harrods, can cost the same amount as a 17 bedroom castle on the Scottish border. (4)
Why is London so expensive and sought after for property investment? London is a honeypot for international property investment with properties being snapped up by overseas investors before they even come onto the market. Moreover, professional demand is stronger and more robust in the capital because there are more employment opportunities. The theory is that it should be easier to find professional tenants quickly than anywhere else in the UK. (5)
Having said this, choosing the South of England is a big investment decision to make. To find a high-quality property close to local amenities and in a good neighbourhood under the 1million pound mark can be tricky. The North of England, on the other hand, enables investors to buy property with much less of a financial risk. Properties on average are cheaper and by investing in more than one, it helps you spread the risk of your investment, which will have less of an impact on your cash flow. (5)
Prime Minster David Cameron has been actively promoting the North of England as a Northern Powerhouse internationally. Chancellor George Osborne said, in his March budget, that the North had grown substantially faster than the South over the previous year and the region with employment rising at the quickest rate, has been the North West. (6)
Manchester is becoming a major location for international business due to its great transport links, as well as being home to a major international airport. In fact, it is the second most visited city, by tourists, in England. (7)
It is far cheaper to employ staff and rent offices in the North than in the South of England. Businesses can employ highly skilled workers for half the salary of a London employee, yet their staff have a higher standard of living than those working in the South. (8)
Lifestyle and Quality of Life
Despite there being far more opportunity in the capital than anywhere else in the UK, you are up against the massive competition, not only as a property investor but also for the people living there.
Jobs are frequently advertised, but the number of applications is incredible. In 2013 over 1,700 people applied for only 8 jobs in Costa Coffee, in Nottingham. (9) Once you have a job, making sure you continue to perform and impress, is highly stressful in the South.The working day often requires employees to take work home with them, in order to keep on top of their paperwork and meet strict targets. (10)
The quality of life in the North can be considered higher than the South, as the work life balance is considered to be better. People often relocate from London to the North to start families and get a foot on the property ladder. Nick, an architect, recently made the move from London to Newcastle, ‘I lived in a box room in a shared flat in Clapham for a year and a half…Now I’m working for a multi-award-winning practice and my career hasn’t suffered at all. I can eat out whenever I like here, and I also have a car and have joined a gym, which I couldn’t afford in London. You forget how green it is here; when you come to Newcastle from London it’s like someone’s applied an Instagram filter.’ (11)
The differences in lifestyles can be a major factor in the types of tenants and tenancies you can attract. In the North, you are more likely to find professionals and families looking for long-term tenancies whereas in the South you may find short term tenancies suit people better, especially if they are new to the city or plan to jump from job to job.
As a property investor, you should consider investing in a property you can be sure will make you a high return on your investment. The Heaton Group are highly experienced in sourcing, developing and investing in high rental yield investments, to find out more please call 01942 251949