Where's the best place to invest in property in the UK?
2016 has seen a huge rise in the popularity of northern cities in terms of where to invest in property for the best possible returns. Various sources, including the consumer group Which? showed that it was consistently cities in the north of England where property prices were surging and where the price of the average house was still below £200,000. Here is a quick line-up of the five best places for property investment in the UK - and four of them are not London.
According to a 2015 study of Emerging Trends in Real Estate, Birmingham
is the city that offers not only the best potential for property investment in this country, but also the 6th best prospect in the whole of Europe. One large factor in the city's perhaps surprisingly high placing in this study is its recent regeneration. With projects including Birmingham New Street station, the new Grand Central shopping precinct, the High-Speed 2 project, and the £150m Resorts World Birmingham entertainment complex, the city is thriving
like none other in the UK. Plus it has upward of 33,000 businesses, by far the largest number outside London. Added to which, it has had a population boost of 300,000 in the past ten years and is officially the youngest city in the whole of Europe, with 40% of its population still under 25.
While London's inflated prices are reducing yields, top university cities - particularly those in the North of England - can offer far higher returns to investors. The North East has excellent returns, with as much as 9% yields achievable in the centre of Newcastle
and its suburbs. This is in comparison to a nationwide average of 6%, with often even lower numbers in London. With ongoing cultural and business regeneration in Newcastle and Gateshead, the north-east has emerged as a highly desirable area to work and live for a wide demographic who are driving up demand in the private rented sector, with as much as a 50% increase in rental values in some areas. Newcastle's population is also rising again and the city is experiencing high levels of graduate retention, making it a vibrant city that is perfect for investment.
In 2015, Manchester's house price growth was the strongest in the UK, with some prices even doubling. Between 2001 and 2010, the population of Greater Manchester
increased by more than 7% and the city also has the country's largest university population and a growing army of young professionals. It is the third biggest city in the country and a veritable mecca to sports fans from all over the world, thanks to achievements of the footballs teams, United and City. Consequently, rental property demand in the city is higher than ever before, not just from tenants but from investors keen to make a shrewd and high-return purchase.
Arguably the UK's top city for affordable homes and one of the country's largest university cities, with more than 60,000 students, Liverpool
is a perfect market for landlords keen to invest in buy-to-let properties. The city’s ever-increasing population of students - both from the UK and other countries - means that the demand for investment in student property is set to continue, particularly where high-quality and even luxury student accommodation is concerned.
It is the fault of London’s perpetually rising prices and simultaneous decrease in property availability that sees investors looking elsewhere, but despite this fall in popularity, London will continue to make more money than elsewhere in the UK for some time, even though other cities may offer better value. Or of course you can always look overseas at international property investment. For more specific advice, tailored to your particular needs, give us a call at Barrows & Forrester today.