The unlikely UK town that’s becoming a property investor’s dream with houses for £30k | UK | News


Focus On: Middlesbrough High Street

Middlesbrough is an area that’s experiencing a buy to let boom. (Image: Getty)

A UK area that was once an industrial heartland is attracting property investors from across the world.

Once dubbed ‘Ironopolis’, the North East town of Middlesbrough and its surrounding area of Teesside is moving on from a past of heavy industry to become the UK’s answer to Silicon Valley.

Other huge wins for the area include it being chosen as the site for the UK’s largest Freeport by the previous Government and a massive relocation of Treasury jobs to the nearby town of Darlington.

Now the town and wider region has become a magnet for property investors from afar afield as Hong Kong and the Middle East as property prices remain low despite a hopeful future on the horizon.

Tech firms, including a stream of start-ups, are now dotted around Middlesbrough’s thriving Boho Zone. 

Companies like Double Eleven work on some of the world’s biggest video games, while another – Big Bite – develop web platforms for media giants like the New York Post.

READ MORE: Seaside town that’s bucking major housing market trend despite Labour red tape

Denis Shail (left) is the director at Horizon Property Group

Denis Shail (left) is the director at Horizon Property Group. (Image: Handout)

Danielle Croce is director of safety software company, Intasite, the company that created the health and safety app for the nearby Teesworks site, a 4,500 acre former steelworks site being converted for the green industry.

She explained the switch which is taking place, and told Express.co.uk: “People are a bit shocked when they realise the scale of Teesside’s tech industry, but it is a massive sector and has helped transform a lot of the area – as well as creating hundreds of jobs.”

The Treasury has located its new northern HQ in Darlington, a move that will see around 750 senior civil servants based in the County Durham town. Three years ago it was also announced that Teesside would host the UK’s largest freeport – a low-tax and regulation zone aimed at capturing the benefits of leaving the EU.

This mammoth investment in the area is now trickling down into other local sectors including housing, with both Darlington and Middlesbrough at the centre of a buy-to-let boom in recent years, with investors jetting into the North East to capitalise on the region’s rock-bottom property prices.

skyline

Middlesbrough and Teesside are known for their industrial past but all that is changing. (Image: Getty)

‘Sheer disbelief over property prices’

The area has long had some of the lowest property prices in Britain. Earlier this year, a two-bed semi in the Normanby suburb of Middlesbrough was listed for auction for £20,000.

Denis Shail, co-founder of Horizon Sales and Lettings, said: “The average London property price now exceeds £700k. In Middlesbrough, it is around a quarter of that price while there are some houses available for as low as £30k.”

He only launched the business in 2019 as a team of just three and has expanded into a team of 20 after it quickly outgrew its original office. 

Based in Middlesbrough, it has helped an army of investors build successful North East property portfolios with a full sourcing, refurbishment and management service. 

According to Denis, a big part of the rapid growth that has resulted in the firm managing a portfolio of over 500 properties has been the influx of investment from outside of the North East. In just three years, the company’s turnover has risen from £250k to £5m.

He said: “Investors from abroad want big yields, and the days of big yields in London are over. Currently, you are getting a yield of around three to four per cent – in the North East, that is at least double.

“The North East, especially Teesside and Darlington, has cemented itself as the ‘big yield capital’ and that’s why we are seeing a staggering number of international investors drawn to the region.

“The idea of super-rich investors buying up rental properties in County Durham or Middlesbrough would have once seemed implausible, but we recently had investors from Hong Kong fly in specifically to see us at our Middlesbrough office.”

Nigel Thompson, an investor who runs a successful building firm in Norwich, was won over by the potential yields in the North East.

He said: “We’ve since moved money from the South East to focus on Teesside, and in fact, we’ve created a separate company called Kenzoku North East in order to focus solely on this area.

“We have a five-year plan that we feel will help us be part of what’s going to be an economic explosion linked to Teesworks, and in our opinion, Teesside will soon be one of the most sought-after buy-to-let hotspots in the UK, so being a part of it at the start gives us a great advantage.”

Around 80 per cent of Horizon Sales and Lettings’ clients are based outside of the North East, with investment transitioning from the South East via the west corridor – Bristol, Birmingham and the North West.

Increasingly, they are being drawn to the North East due to what Denis states is their “sheer disbelief” at the low property prices.

He added: “The volume of people relocating from around the world for Teesport is staggering. There are now workers from Africa and across Europe living near Redcar because of the development.

“Like students, some of these workers aren’t interested in buying. They come, work or study for a few years, then return home so there’s a natural willing rental market.

“Contractors don’t want to be living in a hotel, so buy-to-lets have driven the local Air BnB market, which is good for landlords but also far better for the contractors who have a home away from home.

“At the same time, with landlords investing in the area, they are often improving homes. They are cheap because they are a bit rundown, but they are coming in with the goal of bringing them up-to-scratch which ultimately improves the area.”

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