Why Warrington Should Be on Your Buy-to-Let Property Investment Radar
Are you considering buy-to-let property investment in the north-west of England? If so, you should definitely consider Warrington! Warrington is an area full of opportunities for property investment, boasting high rental yields, low costs, and strong potential for future growth. With numerous regeneration projects taking place, now is the perfect time to get in on the action. In this guide, we'll take a look at why Warrington should be on your radar when it comes to buy-to-let property investment.
What makes Warrington a popular place to live
Warrington, Cheshire, was named the best place to live and work in the UK in 2021, and it's no surprise why. This vibrant town has seen exponential economic growth, and its residents are among the happiest in the UK. Warrington has established itself as a tech hub, attracting numerous digital companies to set up shop here. It was even awarded funds in its drive to become one of the UK's first Smart Towns.
But it's not just the thriving economy that makes Warrington a popular place to live. The town has undergone significant redevelopment, with the town centre being transformed into a bustling hub of activity. The new market hall, multiplex cinema, high street shops, restaurants, bars, and cafes have revitalised the area and created a vibrant atmosphere for residents to enjoy.
Location-wise, Warrington is in a prime spot between Liverpool and Manchester, with easy access to the M62 and M6. Efficient and frequent intercity rail and bus services make commuting a breeze. And let's not forget about the excellent schools and job opportunities available here. Warrington boasts a range of Good and Outstanding primary and secondary schools, as well as jobs across various industries.
For those who love to travel, Warrington is perfectly situated near Liverpool and Manchester airports, offering easy access to international destinations. Overall, Warrington has earned its prominent place in the business community of the North West and Northern Powerhouse region. With the headquarters of internationally renowned firms and a diverse range of employment opportunities, it truly is a thriving business hub.
Historic property price growth in the area
If you're thinking about investing in property in Warrington, it's critical to comprehend the historic growth in house prices in the area. Over the past year, Warrington's property market has seen tremendous growth, with the average property price in the Warrington postcode area currently standing at £295,000 and a median price of £212,000.
In the past twelve months alone, the average price of a property in Warrington has jumped up by £30,000, representing a remarkable over 12% growth. This reveals the tremendous demand for properties in the area and the potential for a substantial return on investment.
As for property types, established properties have an average price of £300,000 while newly constructed properties have an average price of £310,000. This assortment of property types enables investors to pick from a selection of options in accordance with their preferences and budget.
It is important to point out that there were 7,200 property sales in Warrington in the last year, yet this number represents over a 28% decrease compared to the previous year, with 3,200 fewer transactions in 2023. Still, this dip in sales could be attributed to several causes, such as the effects of the pandemic and rising mortgage interest rates.
With regard to price ranges, the bulk of properties sold in Warrington were within the £90,000-£150,000 range, making up 19% of all sales, comprising 1,400 properties sold. The £150,000-£200,000 range follows closely behind, taking up 17% of all sales and equating to 1,250 properties sold.
When comparing Warrington's house prices to the wider region of England and Wales, it's evident that Warrington's property market offers lucrative prospects for investors. The median property price to median earnings ratio fluctuates from 4.6 in St Helens to 9.2 in Trafford, with the England and Wales ratio standing at 8.2 in 2022. This indicates that Warrington's property prices are reasonably affordable when compared to the region.
Future price growth forecast for Warrington
The future price growth forecast for Warrington is looking promising for buy-to-let property investors. In spite of the hardships imposed by the COVID-19 crisis, and the high UK inflation rate driving up mortgage interest rates, the Warrington job market remains robust, with unemployment near all-time lows of 3.6%. This indicates a stable and prosperous economy, which bodes well for the property market.
Comparing the current housing market in Warrington to the 2008 Credit Crunch, there are notable differences that suggest a more positive outlook. Warrington homeowners have built substantial equity in their properties since 2008, and many have taken advantage of re-mortgaging at lower fixed rates during the pandemic. Unlike in 2008, banks are prepared to lend money, making it easier for buyers to secure financing.
It's worth noting that the Bank of England has instructed lenders to stress test every mortgage application up to 6% or 6.5% mortgage rates. This ensures that buyers are financially capable of handling potential interest rate rises, adding an extra layer of stability to the market.
Homeowners in Warrington view their properties as more than just houses; they see them as long-term investments. Historically, home prices have appreciated over time, even after the financial crisis of 2008. Since June 2016, an additional £88,000 has been added in equity to the average Warrington home, indicating a positive trend of price growth.
Considering these factors, it's reasonable to expect that the property market in Warrington will continue to show strong growth in the coming years. With a thriving local economy, increasing equity in properties, and lenders willing to provide financing, now is an opportune time for buy-to-let property investors to consider Warrington as a lucrative investment destination.
Expected rental yields for buy-to-let in Warrington
The average rent achieved in Warrington is currently £860 per calendar month (PCM), and this figure has seen a substantial increase of over 11% in the last 12 months. But what about rental yields?
Rental yield is a crucial metric for buy-to-let investors, and in Warrington, the average yield stands at 4.0%. This figure is certainly attractive, but it doesn't end there. Some areas in Warrington can achieve even higher yields, ranging from 5.5% to 7% and sometimes even more.
One area that stands out is WA2, where property values have increased by a remarkable 32% in the last three years. This substantial growth is an excellent indicator of the potential for high rental yields in this area.
Furthermore, with the town's ongoing growth and regeneration, tenant demand is expected to increase even further. This means that investing in buy-to-let properties in Warrington could provide a solid and reliable income stream for years to come.
It's worth noting that Warrington is even named as one of the top 25 postcodes in the country for buy-to-let investment, with a healthy and promising rental market. So, if you're considering buy-to-let in Warrington, the expected rental yields make it an attractive option for savvy investors looking to maximise their returns.
Regeneration plans and improvements happening in the town
£52m Bridge Street regeneration
£107m Time Square regeneration
Warrington is not just a popular place to live and invest in property; it's also a town undergoing significant regeneration and improvement projects. These developments are set to transform Warrington into an even more vibrant and appealing place to live and work.
One notable project is the Rivers Edge development, which will see the construction of more than 500 new homes near Warrington town centre. This development aims to provide high-quality housing options for residents, with a mix of houses, apartments, and affordable homes. With construction well underway, this development is expected to be completed later this year, adding to the town's housing stock and meeting the growing demand for modern and comfortable living spaces.
Another exciting regeneration project taking place in Warrington is the transformation of Marshall Gardens, a neglected park located in the town centre. This project has made impressive progress, with extensive renovations and improvements to create a welcoming and attractive green space for residents to enjoy. The rejuvenation of Marshall Gardens is set to enhance the overall quality of life in Warrington, providing a beautiful and well-maintained park for leisure activities and community gatherings.
In addition to these specific projects, Warrington is also implementing the Central 6 master plan. This ambitious plan covers a range of project areas, including housing, transport, green spaces, and community facilities. The goal of the master plan is to create a more sustainable and inclusive town that meets the needs of its residents and supports economic growth.
Currently, there are several projects in delivery as part of the Central 6 master plan. These include the expansion of green spaces, the improvement of cycling and walking routes, and the creation of new community facilities. These initiatives are set to enhance the overall quality of life in Warrington and provide residents with better access to amenities and recreational areas.
To ensure the successful development of the master plan, Warrington has engaged in a thorough and inclusive process. This involved extensive consultation and engagement with the local community, allowing residents to have their say and shape the future of their town. The key priority areas identified by the community include affordable housing, improved transport links, and the preservation of green spaces.
The final master plan encompasses eight key themes, which will guide the future development of Warrington. These themes include sustainable development, enhanced connectivity, vibrant town centre, high-quality housing, thriving economy, community wellbeing, cultural heritage, and environmental sustainability.
8 Tips for investing in buy-to-let properties in Warrington
When it comes to investing in buy-to-let properties in Warrington, there are several important factors to consider. Here are some tips to help you make the most of your investment:
1. Research the Warrington property market: Understand the current rental demand, average rental prices, and property prices in the area. This will give you a better idea of the potential return on investment.
2. Consider the location: The location of the property plays a significant role in attracting tenants. Consider factors such as proximity to amenities, schools, and transport links. Think about the type of tenant you want to attract and choose a location that aligns with their needs.
3. Calculate all costs: It's essential to calculate all costs associated with the property. This includes the purchase price, stamp duty, legal fees, renovation costs, mortgage payments, tax, insurance, and maintenance costs. Having a clear understanding of the expenses involved will help you budget effectively.
4. Consider financing options: Explore different financing options, such as traditional mortgages, specialist buy-to-let mortgages, or cash. Consider the interest rates, repayment terms, and affordability of each option before making a decision.
5. Choose a reputable letting agent: Working with a reputable letting agent with experience in the local market can make your life much easier. They can help you find tenants, manage the property, and ensure compliance with laws and regulations.
6. Stay informed: The buy-to-let market is subject to numerous laws and regulations. Stay on top of the 170+ rules that apply to the property to avoid any legal issues or penalties.
7. Prepare for the unexpected: Property investments come with risks, including unforeseen repairs or difficult tenants. Set aside a contingency fund to cover any incidental expenses that may arise.
8. Consider your investment set-up: Whether you choose to invest through a limited company or personal name, consider the tax implications and overall income forecast. Seek advice from a financial professional to determine the best structure for your investment.
By following these tips, you can make informed decisions and increase your chances of success when investing in buy-to-let properties in Warrington. Remember, thorough research and careful planning are critical to a profitable investment journey.
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