It’s not always about London. Investors with an eye on emerging UK property markets will tell you this.
Offering strong rental yields and a range of factors that suggest sustainable profits for the future, such as investment in infrastructure and growing university populations, there are a number of places that property investors should be aware of in 2019.
Whether it’s affordable housing in the areas across the commuter belt or city properties in the ‘Northern Powerhouse’, here’s a look at some of the best cities for property investments this year.
Manchester continued to impress us last year with strong rental market growth. Fuelled by a substantial university population and growing employment opportunities in the city, it has attracted both British and foreign investors alike.
With four universities contained within the city limits and an estimated student population of around 100,000, the demand for rental accommodation has remained steady, contributing to an average rental yield of 7.07%, according to TotallyMoney.
What’s more, Manchester has one of the highest graduate retention rates outside of London, meaning large quantities of young people still seek out rental accommodation after they’ve wrapped up their degrees and entered the workforce.
To match this, employment options appear to offer reasons for UK citizens (and those who have already experienced London’s high rental prices) to migrate to this Northern Powerhouse city where rental properties make up a large proportion of the city’s real estate stock.
Property investors will also want to consider Leeds as a particularly appealing location to invest in for 2019. With a large student demographic and the overall population set to expand into years to come, it’s more than likely that rental yields will increase as demand grows.
Leeds also has a burgeoning student population and an attractive nightlife scene, offering a range of bars, restaurants, theatres and cultural activities that make it a great place for young professionals in the market for rental accommodation. Also with property prices significantly lower than London, many are now weighing up the benefits of selling up in the capital and moving north.
Liverpool is another high performing Northern city to watch this year. Similar to Manchester and Leeds, it has a substantial student population as well as increasing employment opportunities for young professionals, which has in turn increased the demand for rental accommodation over the last few years.
Contributing to this growth has been large regeneration projects that have improved the cityscape, transforming it into an active and vibrant hub of cultural activities. Still set to come are the £5 billion Liverpool Waters scheme and the £14 billion Regenerating Liverpool scheme designed to improve connectivity throughout and regenerate large sections of the city.
Edinburgh was revealed as the UK city with the fastest growing rents in 2018, according to recent data from buy-to-let lender Landbay. Demand here now outperforms London and other bustling areas of the UK, showing us that low rental yields that typically affect England’s capital aren’t applicable here.
As well as offering an amazing cityscape of activities, nightlife, universities and nature, the Scottish capital continues to attract young professionals with significantly lower rental costs than London. Edinburgh’s growing tourism industry is also predicted to contribute towards the city’s growth over the next decade, further increasing the demand for rental property.
Aside from the impact of tourism, Edinburgh is home to a range of key industries, including finance, higher education and scientific research, making it an attractive haven for young professionals in 2019 and beyond.
Areas within the commuter belt are becoming increasingly more desirable as house prices in the capital continue to rise.
The Midlands is also set to enjoy the benefits of various infrastructure developments that will improve transport links and connectivity across the region, as well as into the capital. Birmingham, for instance, will see huge changes to accessibility as HS2 reduces travel time from Birmingham to central London.
Nottingham, with its two universities that have over 37,000 people choosing to study here, has one of the UK’s largest student populations. Properties in the NG1 postcode have an average rental yield of 11.99%, according to TotallyMoney.
Finally, Leicester, with one of the fastest growing urban areas in the country, has enjoyed a large increase in property prices over the last two years. Now one of the biggest economies in the Midlands, it offers interested investors a highly competitive property market.
The central location of Leicester also makes it a great compromise for families choosing between a region in the north or South of England. While you can get to London in just over an hour, you can also get to mainland Europe within four hours. It’s highly likely that Leicester will continue to rise as a major investment hot-spot in years to come.
A good investment
It seems that many of the UK’s best areas to invest in property are located in the Midlands or further North. But while this list may give you a head start on your research, remember that the usual rules surrounding property investment still apply. For instance, you should be looking for the best value deals within these cities that are likely to sustain your profits, not simply the cheapest properties available.
Always try to understand as much as you can about the market before you make a final decision. And if you’re considering investing in a completely new city, take the time to familiarise yourself with the new landscape to fully understand what may (or may not) be a good investment.