Here are the top UK cities for property investment, which are backed by strong growth and rising population
Choosing the right location for property investment UK is one of the most important decisions as it can make the difference to your future returns. Although, it’s not possible to predict the future accurately – informed speculation, along with an eye on your goals, holds the key to a successful property investment. For a successful property investment UK, you should consider a number of components that raise the probability – if not guarantee – of returns on your property investment, which include projected rental yields, capital growth, local demand and supply, and regeneration projects.
Although, global residential investment has come under increasing pressure over the recent years, the demand for property continues to grow as the demand for residential properties continues to grow. Despite this uncertainty, the UK’s property sector remains one of the most stable markets globally. In the present times of overall international economic uncertainty, investors are looking to invest their money securely. This offers great property investment UK opportunities if you know where to look.
According to the leading property development and investment company, Seven Capital, the 10 best places for property investment UK are:
Topping the list, is Birmingham, with a 19.3% rise in house prices since 2014. It is one of the most popular locations for overall investment as it attracted the highest number of foreign direct investment outside London and the South East.
Seven Capital cites Knight Frank’s prediction that prices will rise a further 12.5% by 2022, while yields, which are currently between 4.4% and 5.3% (PropertyData), are expected to remain strong alongside growing demand for rental property in the city.
Next on the list is Liverpool, which is one of the highest performing hotspots in the UK for rental yields. According to Property data the postcodes L7 and L1 are regularly achieving yields of 8.2% and 8%, with rises of 15% and 12% in the last five years respectively. Despite a slowdown in price growth during 2019 following an outstanding Q4 of 2018, the city remains an attractive destination for property investment UK in the North. JLL expects that property prices in central Liverpool will rise by 2% and rents by 3.5% throughout 2020.
Manchester occupies the third spot on the list of locations for property investment UK and continues to be one of the top places to invest outside London. It is one of the most exciting places to live and work in the UK and continues to attract huge investments. Property price growth in the city since 2014 is 22.09 per cent.
With growth of 250% since 2000, 7.7% in the last year, and 2.4% in the last three months, Leicester is fast coming up as a top buy to let hotspot. According to Property Data, a chronic undersupply of homes to meet incoming tenants means it’s also generating good rental yields of around 7.20%.
Nottingham’s central location in the UK with direct access to key destinations, makes it a natural choice for property investment UK. Prices in the city have grown nearly 20 per cent since 2014 and expected to continue to grow as more professionals and students prefer the city.
Sheffield can be an attractive property investment UK destination as house prices are still lower, making it a great option for the first-time investor. Property prices in the city have grown by 19.5% since 2014, and an incredible 223% over the last 20 years. However, its rental yields offer the biggest attraction at 7.30 per cent on average.
With its famous university, Oxford is big attraction among students. It has one of the strongest economies in the UK. Although property price growth has slowed somewhat since 2016, it ranks third in the UK for overall growth in the past 10 years.
One of the fastest growing cities in the UK, the Welsh capital has seen recent improvements to infrastructure, which have boosted jobs growth. Average rental yields in many parts of the city is already between 4% and 6%, which is expected to continue to grow.
Property prices in the city have grown 17.04% since 2014, and 211% since 2000. With the city’s population growing seven times faster than London, it is a hotspot for property investment UK. According to Property Data, rental yields in the city have hit an average of 7.6%.
Despite a slowdown in the property market since 2016, the city continues to attract property investment. It is ranked second among the world’s financial centres. As it has seen the fastest growth in most areas and an ever-growing population, the demand for property will remain high.
Better yields in the north
Seven Capital states that typically, the further north you go the higher your rental yields will be.
“Looking at the properties priced over £100k delivering the highest rental yields, we can see that the four postcodes in the ‘Northern Powerhouse’ take the top spots,” says the report, listing L1 in Liverpool, S1 in Sheffield, M14 in Manchester and LS6 in Leeds as the locations with the highest rental yields in the country (PropertyData).
However, the report also warns: “Just remember, a high rental yield doesn’t tell the full story. Tenant demand is just as important, so jumping into an area with a high rental yield on paper isn’t always the best tactic.”
Places where prices have risen the most
Using HomeTrack data, the top five places to have seen the highest capital gains are Liverpool, Birmingham, Cambridge, Glasgow and Leicester. Liverpool saw the most impressive gains over the past three months of 2.6%, well ahead of London’s 1.1% growth over the same period, while its 12-month gains were 4.6% on average. Birmingham achieved 2.1% house price increases over the past three months, with 3.8% over the past year – and this growth is one of the reasons the two cities have made it to the top spots in Seven Capital’s list of places to invest in 2020.