"Manchester and Liverpool have been popular for some time, though growing interest in North Eastern towns like Hartlepool and Middlesbrough has been aided by low house prices"
- Marc von Grundherr - Benham and Reeves
The research comes from London lettings and estate agent, Benham and Reeves, which analysed the volume of additional dwellings purchased between the 2020-21 and 2021-22 financial years across England.
Across the country as a whole 19.5% more second homes were bought, with transactions rising from 230,900 between April 2020 and April 2021 to 275,900 between April 2021 and April 2022 - as the country recovered from the pandemic.
Between the two financial years purchases of additional dwellings soared by 27% in the North East, from 11,500 to 15,000.
Meanwhile, they rose by 26% in the North West, from 34,400 in 2020-21 to 41,900 in 2021-22.
Both areas are known for having stronger rental yields, in part due to relatively affordable house prices in cities like Sunderland, as well as growing economies in places like Liverpool and Manchester.
Those regions also contain areas of strong natural beauty, which could also attract people who want to buy a holiday home, like the Lake District in the North West.
Manchester and Liverpool are popular areas
Within the North West, both Manchester and Liverpool saw a sizable bump in activity for additional homes.
The former saw 5,100 purchases in 2021-22, up from 3,300 in 2020-21, a 39% increase.
Meanwhile, Liverpool experienced a 37% increase, with purchases rising from 2,900 in 2020-21 to 3,700 in 2021-22.
Within the North East, the affordable towns of Hartlepool and Middlesbrough saw the biggest increases in activity, where additional purchases soared by 31%.
While every region saw an influx of activity over the period, the lowest growth area was the East Midlands, where 16.9% more second properties were purchased, from 19,500 in 2020-21 to 22,800 in 2021-22.
Other regions with lower growth were the East of England and the South West, at 17.4% and 18.2% respectively.
South East and London appeal remains strong
While second home purchases were already strong in the South East and London, that trend continued.
Aside from the North West, the most purchases took place in England in the South East, at 41,900, followed by London, at 41,800.
While neither of these regions is likely to offer the strongest rental yields, they are historically known for attracting significant house price growth.
Some investors also prefer to buy second properties closer to where they live, regardless of the yield, rather than attempting to manage a property a long drive or train ride away.
Director of Benham and Reeves, Marc von Grundherr, commented:
“Making strong returns as a second home investor is no longer a guarantee, so it appears that more are prepared to look further afield by purchasing homes in the regions where yields are stronger due to the lower initial cost of purchasing a property.
“Manchester and Liverpool have been popular for some time, though growing interest in North Eastern towns like Hartlepool and Middlesbrough has been aided by low house prices.
“For those who are looking to purchase an additional dwelling to live in, rather than as an investment, the beautiful nature of the landscapes in the North of England also act as a big pull to those that can afford to buy a second home.
“Elsewhere there’s consistent activity in the South East and London, which tend to attract strong capital growth and so are always likely to have a steady flow of activity, even in more subdued times.”