There has been a sharp rise in letting market activity in Stockton-on-Tees, according to Zoopla.
The North East market town has seen the highest increase in rental demand year-on-year than any other location across the UK.
The property website delivered 75% more rent leads to its letting agent clients here over the last 12 months, crowning Stockton-on-Tees the number one buy-to-let hotspot in terms of growth, which partly explains why there has been a recent influx of new landlords to the market here.
Landlords in Stockton-on-Tees are currently achieving an average yield of 5.8% on two-bedroom homes, this is 1.5% higher than the average yield registered across London and South Eastern markets, whilst the national average sits at 4.9%.
This strong yield, coupled with an average house price of just £160,700, is creating a surge in buy-to-let investors in the market town who have shifted their focus from London and the South East of England to more affordable markets.
These new investors are now bringing more homes to the rental market in Stockton-on-Tees, which in turn is attracting potential tenants from surrounding areas; new rental instructions are up 6% over the last 12 months.
Zoopla reports that landlords are typically snapping up houses rather than flats in the market town to attract families.
Buyers and renters alike are favouring three-bedroom terrace houses in this market, with Zoopla data revealing this property type received the highest number of letting and sales leads to agents.
Elizabeth Williams, branch valuer of Pattinson, an estate agency business which has a stronghold in Stockton-on-Tees, commented: : “We have seen a significant uptick in buy to let investors looking to purchase in Stockton-on-Tees, so much so that we deal with enquiries of this nature on at least a daily basis. Previously, these investors bought properties and flipped them for a profit, but now there is a 3% levy on stamp duty land tax on second homes and yields are stronger here, so letting these properties is a much more attractive prospect.
“These investors are predominately looking to purchase three-bedroom terrace houses. This is likely due to landlords wanting to attract families rather than young professionals as tenants, as the former typically prefer longer term contracts which offer a more stable income to the investor.”
Zoopla analysed the number of leads it delivers to estate agents in over 370 local authorities to identify the areas of the country currently experiencing the highest increases in demand from tenants.
Andy Marshall, chief commercial officer at Zoopla, commented: “We know that in the current climate many of our agent clients are shifting strategies to position their lettings departments as the beating hearts of their businesses. It is therefore more important than ever to ensure we are delivering on these lettings leads to offer the best value for money to our agents.
“We are continually investing in advertising, building new products and revamping our tools to deliver high quality leads to our agents, a key example of this is the fantastic user engagement we’ve seen with our newly launched app which has now reached nearly 12 million downloads.”