While UK house prices overall rose by 0.5% in February, some key areas have bucked the trend, offering buy-to-let (BTL) investors a unique opportunity.
In Wales, average property prices dropped by 2.7% to around £255,316. In parts of the North West, although the overall region saw only a modest 0.3% increase, certain towns continue to offer compelling value thanks to strong rental yields.
Why focus on these regions?
In Wales, falling prices have created an accessible entry point for investors. Areas such as Swansea (notably the SA1 postcode) and regions in Rhondda Cynon Taf have seen significant price adjustments. These areas not only benefit from the price drop but also deliver robust rental yields, around 8.2% on average. Lower purchase prices combined with healthy rental demand mean that investors can secure properties with excellent cash-flow potential.
Although the North West’s overall average price rose by just 0.3%, certain cities within the region are proving particularly attractive. For example, parts of Manchester – especially the M14 area – stand out, with reported yields reaching up to 12%. Similarly, areas in and around Bradford (e.g. the BD1 postcode) have been noted for their attractive rental returns.
Seizing the opportunity with bridging finance
Bridging finance is uniquely positioned to support BTL investors looking to take advantage of these market conditions. With their fast turnaround and flexible structure, bridging loans enable investors to secure promising properties before the window of opportunity closes.
Lower entry costs allow investors to build or expand their portfolios with less initial capital, which is particularly valuable when prices are falling or stagnant. Once the property is in place and rental income is established, investors can transition to longer-term financing.
How to get started?
Partner with local property experts and agents, who can provide critical insights into neighbourhood dynamics. This can help you pinpoint the areas where falling prices and high rental yields intersect.
Research the local market. It can help you identify undervalued properties with high rental demand.
Bear in mind that most lenders – including us – can fund of up to 70% LTV to cover the purchase, renovation, or both. Therefore, it is crucial to secure the remaining funds before applying.
Whether your goal is to refinance into a traditional mortgage or to capitalise on rental income, remember that having a clear exit plan in place is essential.
For BTL investors, the combination of falling house prices in Wales and select high-yield opportunities in the North West represents an attractive prospect. Now is the time to explore and take advantage of these strategic investment opportunities.
If you’d like to discuss your options or find out more about bridging finance, get in touch with one of our BDMs on 0207 052 1652.