National Broker Survey of Buy to Let 'Hot-Spots' and 'Not-Spots' puts Newcastle postal area in top slot

Date: 24.10.2007

Research of mortgage lending in the UK by broker postcode area*, conducted by The Mortgage Works, reveals the top Buy-to-let ‘hot-spots’ and ‘not-spots’ across the country.

 

Assessing the spread of buy to let mortgage lending across 121 postal areas of England, Wales and Scotland, the research revealed that in Q2 2007** Newcastle upon Tyne (NE) saw the greatest number of buy to let loans completed across the country.

 

Property investors in this northern region took out 3,545 buy to let mortgages in Q2 2007, 32% more than the next highest postal area - London Eastern Central (EC), 2,676 (see Table 1 below). As the table shows, buy to let lending ‘hot-spots’ are geographically diverse across the UK including postal areas along the West Midlands, Strathclyde and London.

 

Table 1: Top five Buy to Let ‘hot-spots’ by postal area

Rank	Postcode Area	Number of Buy-to-let loans
1	Newcastle upon Tyne - NE	3545
2	London EC	2676
3	Birmingham - B	2167
4	Glasgow - G	2069
5	London W	1812

 

 

 

 

 

 

 

 

 

As the buy to let ‘hot-spots’ and ‘not-spots’ are arranged by postcode areas, London as a region is divided. If considered as one region London would rank higher than Newcastle upon Tyne as a buy to let ‘hot-spot’.

 

Table 2: London postal area Buy-to-Let ‘hot-spots’ and ‘not-spots’ ranked

Rank	London Postcode Area	Number of Buy-to-let loans
2	London EC	2676
5	London W	1812
10	London SW	1570
22	London N	1155
44	London WC	751
50	London SE	679
63	London NW	542

 

 

 

 

 

 

 

 

 

 

 

At the other end of the scale, the postal area which saw the least amount of Buy-to-Let lending was the Outer Hebrides (HS) with only 3 mortgages taken out for investment properties in Q2 2007; [79%] below the next lowest area – Kirkwall (KW), 14 (see Table 3 below). Perhaps predictably the bottom five Buy-to-Let ‘not-spots’ are situated in either rural or remote areas of Scotland and Wales.

 

Table 3: Bottom five Buy-to-Let ‘not-spots’ by postal area

Rank	Postcode Area	Number of Buy-to-let loans
1	Outer Hebrides - HS	3
2	Kirkwall - KW	14
3	Llandrindod Wells - LD	28
4	Dumfries – DG	49
5	Galashiels - TD	51

 

 

 

 

 

 

 

 

 

Not surprisingly, when Buy-to-Let lending is assessed by value of loans, London postal areas carry the highest values (see Table 4 below). The value of Buy-to-Let mortgages taken out in the London Eastern Central area alone reached over £609 million in Q2 2007.  However, Newcastle also ranks in the top five positions.

 

Table 4: Postcode areas with the greatest value of Buy-to-Let lending

Rank	Postcode areas with the greatest value of Buy-to-Let lending	Value of Buy-to-Let lending
1	London EC	£609,678,190
2	Newcastle upon Tyne - NE	£440,470,250
3	London W	£403,853,199
4	London SW	£357,263,160
5	London E	£279,440,267

 

 

 

 

 

 

 

 

 

 

The Mortgage Works’ research also tracked the most improved and least improved postal regions in terms of proportional increase or decrease in number of Buy-to-Let loans since the beginning of the year (see Tables 5 and 6 below).

Table 5: Most improved postcode area Q1 2007-Q2 2007*

Rank	Most improved postcode area	Increase in loans	Percentage change
1	Hereford - HR	33	67.35%
2	Llandrindod Wells - LD	11	64.71%
3	Paisley - PA	153	60.71%
4	Sutton - SM	115	59.90%
5	Colchester - CO	275	53.92%

 

 

 

 

 

 

 

 

*Based on proportional increase in loans between Q1 and Q2, discounting those with number of loans in single figures

Table 6: Least improved postcode area Q1 2007 – Q2 2007**

Rank	Least improved postcode area	Decrease in loans	Percentage change
1	Galashiels – TD	-17	-25.00%
2	Blackpool - FY	-67	-18.26%
3	Halifax - HX	-12	-12.90%
4	Wakefield - WF	-38	-10.61%
5	Harrogate - HG	-20	-10.58%

 

 

 

 

 

 

 

 

**Based on proportional decrease in loans between Q1 and Q2

 

While Llandrindod Wells (LD) ranks in the bottom five Buy-to-Let ‘not-spots’, this postal area has seen significant growth in Buy-to-Let lending from Q1 to Q2 2007 with a percentage increases of 65%. The least improved postal area was Galashiels (TD) in Scotland. The number of Buy-to-Let loans taken out in this postal area decreased 25% from 68 loans in Q1 2007 to 51 loans in Q2 2007.

 

Andy McQueen, Managing Director of The Mortgage Works, commented:

"The results show that buy to let business for brokers in the Newcastle area has been going well. This, in turn, has helped to make Newcastle the country’s hotspot for buy to let investment. Clearly this has been helped by a number of factors including the ongoing regeneration programme for the city and the influx of students to Newcastle University.

 

"However, stepping aside from geographical breakdowns and analysing the figures further, the data displayed shows that brokers across the country were writing good amounts of buy to let business during the first half of the year with the total number of buy to let loans taken out increasing 20% from Q1 to Q2 2007".

Notes to Editors:

* Data is supplied by Touchstone (a product of Workload Ltd) and accounts for 80% of all intermediary lending in the UK.

 

The data records the postcode location of the intermediary arranging the buy to let loan and not the location where the properties reside. The Mortgage Works assumes that, with 80% of all intermediaries covered; this is still representative of the geographical spread of properties.

 

** Quarter 3 data not available until December 2007

For further information please contact:

Emma Bowden/Charlotte McGregor	Lynsey Hallam
The Wriglesworth Consultancy	The Mortgage Works
Email: e.bowden@wriglesworth.com	Email: Lynsey.Hallam@nationwide.co.uk
Tel:020 7845 7900	Tel: 01202 562256

 

 

 

 

 

About The Mortgage Works

Following the merger between Nationwide and Portman building societies, which completed on 28 August 2007, The Mortgage Works is now a subsidiary of Nationwide Building Society and, together with UCB Home Loans, forms a new division called Nationwide Specialist Lending.

 

The Mortgage Works' product range, available through brokers includes buy to let, where it has built a strong reputation, and self-certification. It also offers a range of sub-prime mortgages, available exclusively through packagers.