With extortionately high property prices, expensive rents and a stagnant market, London is no longer the buy to let investment haven it once was.
Despite the uncertainty surrounding Brexit, property remains one of the safest areas to invest in. However, as with any investment, it’s important to do thorough research on the area before diving straight in. Strong economic growth, investment in infrastructure, university populations and a strong employment market are top factors to consider when choosing a buy to let investment.
Below we’ve handpicked some of the best cities for buy to let investors in the UK.
Home to Guy Garvey, Oasis and the worker bee, Manchester is a place where the northern soul is so strong that some say once you move to Manchester you’ll never leave. Whilst it may not be Hotel California, Manchester does have the best graduate retention rate outside of London, around 70% this year.
Manchester city centre has seen a wealth of commercial investment in recent years with regeneration projects such as Noma, Spinningfields and Ancoats. The creation of these thriving city centre neighbourhoods has created an influx of young people wanting to live in the city, driving demand for more rental properties. Manchester has consequently ended up embracing the buy to let market, increasing property prices by 27% over the last 10 years and therefore capital appreciation.
Approximately 30% of housing in Manchester is now in the private rental sector with rental yields around 8% making Manchester a lucrative choice for the buy to let market.
Average house price in the North West: £198,399
Nottingham is a city with a rich culture and a lot of historical significance. Not only does it have a large student population, it’s a goldmine for employment opportunities, with big companies like Boots and Wilko basing their head offices in the city. Alongside two universities, Nottingham is also home to the UK’s largest teaching hospital, employing 6,000 people, creating massive demand for both renters and buyers.
Surprisingly, Nottingham isn’t on the radar for a lot of property investors, becoming somewhat of a forgotten child despite its great transport links and economic prosperity.
Another factor that Nottingham has going for it is house prices. On average, houses in Nottingham are selling for £199,759, which is 12.9% cheaper than the UK average of £229,431
Low house prices coupled with an increase in rental yields makes Nottingham an attractive prospect for buy to let investors.
Average house price in Nottingham: £199,749
Whilst it may not be the most picturesque town compared to neighbouring Windsor, Slough massively benefits from being on the London commuter belt. Tipped in many property investment blogs for the one to watch in the south, Slough is a good contender for buy to let property investors.
For years London has priced out buyers and renters and that is unlikely to change any time soon. With the average house price in Slough at £349,347, and the average house price in London more than double at £722,585, it’s easy to see why investor interest in the area has picked up.
Investors are increasingly looking at areas with commuter links to London and with Cross Rail construction about to make trips to central London stations more frequently, it makes living in Slough more attractive to young professional renters.
In 2017, Uown reported that 46% of rental properties were let to tenants that had moved from London than anywhere else in the UK, creating very healthy rental yields in Slough. As with anywhere, it’s always worth doing extensive research on the area before investing, but with house prices in Slough predicted to rise by 35% in 2020, you may have already missed the boat.
Average house price in the South East: £407,239
Travel further north and you’ll eventually end up in Newcastle. Newcastle is home to some of the friendliest people in the world, which is probably why graduate retention is so high.
Unfortunately, Newcastle’s perception has suffered in recent years due to the media cruelly stereotyping the city as classless and far removed from the rest of the UK. However, the reality of Newcastle couldn’t be further from this, the city is full of character, charm, beautiful architecture and great transport links.
Commercially, Newcastle is thriving with Siemens, British Airways and HP all making the area home. With great graduate retention and a strong student population, the buy to let market in Newcastle is an attractive opportunity to potential investors.
Another tick for investors is house prices. House prices in the North East are not rising as quickly as the rest of the UK, making it the perfect time to consider a buy to let in Newcastle.
Average house price in the North East: £153,752
Our final city is Edinburgh, recently ranked top by the Royal Mail for the best place to live and work in the UK. Edinburgh is Scotland’s historic and cultural capital, which is not only a tourism hotspot but also one of fastest-growing economies in the UK.
Edinburgh’s healthy housing market is set for an even bigger boost, with property prices expected to keep increasing for the next three years. Property prices have risen by 7.7% since 2017 with this trend predicted to keep rising.
In 2018, Edinburgh was revealed as the city with the fastest-growing rents, according to data from Landbay. Rental demand in Edinburgh outperformed London, highlighting how low rental yields in London affected our northern cities.
This Scottish capital is home to a variety of crucial industries, including higher education, finance and scientific research, making it an attractive job market for young professionals.
Average house price in Edinburgh: £281,557
Overall, the buy to let market appears to be thriving in the north, so it’s definitely worth looking beyond London to get more for your money. Not any property in any part of these cities will be a good investment but buying in a location that’s primed to do well gives you a good head start.
Another option to consider is the value of the pound falling, creating more opportunities for overseas buyers investing in the UK, keeping demand high and house prices likewise.
We have a number of investment opportunities in Manchester, in some of the most desirable areas. Get in touch today to find out more.
Rightmove House Price Index, May 2019