Is Your Money Safe from Inflation? Why Property, Particularly in the North, Offers a Resounding Yes.
As inflation continues to loom over the UK, with the current rate hovering around 3.4%, the value of hard-earned savings is steadily eroding. For those seeking not just to protect their wealth but to grow it, the age-old wisdom of investing in brick and mortar is proving more relevant than ever. While the UK property market as a whole has historically served as a robust shield against inflation, savvy investors are increasingly turning their attention northwards, where compelling opportunities for capital appreciation and rental yields outshine the stagnating London market.
The Silent Thief: How Inflation Erodes Your Savings
Inflation, in simple terms, is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. The 3.4% inflation rate recorded in May 2025 means that £1,000 in a savings account today will only have the purchasing power of £966 in a year’s time. This steady decline can be a significant setback for long-term financial goals, making it imperative to find investment vehicles that can outpace this erosion.
Historically, UK property has demonstrated a remarkable ability to do just that. Over the long term, house price growth has consistently outstripped inflation, preserving and growing capital in a way that cash savings cannot. This is because, as the cost of goods and labour increases, so does the replacement cost of property, driving up market values. Furthermore, during inflationary periods, rental demand often rises as would-be buyers are priced out of the market, leading to increased rental income for property investors.
The tangible nature of brick-and-mortar investments offers a sense of security that more volatile assets like stocks and shares cannot always provide. Property is a physical asset you can see and touch, providing a stable foundation for any investment portfolio.
The Northern Powerhouse: A Golden Opportunity for Property Investors
While the London property market has long been the darling of investors, its growth has become noticeably flatter in recent years. High entry points and compressed rental yields have led astute investors to look for more dynamic markets. The North of England, particularly cities like Liverpool and Manchester, has emerged as a frontrunner, offering a powerful combination of affordability, high rental yields, and significant potential for capital appreciation.
Capital Appreciation: The North Pulls Ahead
Recent data paints a clear picture: the potential for property price growth is now significantly higher in the North West than in the capital. While London’s market is characterised by modest single-digit growth, cities like Manchester and Liverpool are experiencing a renaissance.
Manchester, a hub of economic activity and a key player in the Northern Powerhouse initiative, has seen consistent and impressive capital appreciation. Forecasts for the coming years remain bullish, driven by a growing population, a thriving business scene, and substantial ongoing investment in infrastructure. Similarly, Liverpool’s property market is on a strong upward trajectory. The city’s ongoing regeneration projects, coupled with its vibrant cultural scene and world-renowned universities, are attracting a new wave of residents and investors, pushing property values higher.
Rental Yields: More Bang for Your Buck
Perhaps the most compelling argument for investing in the North is the superior rental yields on offer. Rental yield, the annual rental income as a percentage of the property’s value, is a key metric for buy-to-let investors. In this regard, the North West is the undisputed champion.
In cities like Liverpool and Manchester, rental yields can be significantly higher than those achievable in London. This is due to a simple economic reality: property prices in the North are considerably lower, while rental demand remains strong. This “getting more for your money” proposition is a major draw for investors. A lower initial investment not only reduces the financial barrier to entry but also amplifies the return on investment through higher percentage yields.
For example, an investor could potentially purchase two or even three properties in the North for the price of a single, comparable property in many parts of London. This not only diversifies the investment but also multiplies the potential rental income streams.
The Portico Invest Perspective: A Secure Future in Northern Property
At a time when economic uncertainty is a primary concern for many, UK property stands out as a beacon of stability and long-term growth. While the broader market offers a hedge against inflation, the opportunities for truly maximising returns are increasingly found in the dynamic markets of the North.
For investors seeking to safeguard their capital and generate robust returns, the evidence is clear: the North of England, with its attractive entry points, high rental yields, and strong capital growth potential, presents an unparalleled investment opportunity. By looking beyond the traditional London market, savvy investors can build a secure and prosperous future, one brick at a time.