When looking at the best places to invest in UK property, investors and buy-to-let landlords should expect excellent opportunities. Over the last few decades, the UK property market has shown consistent appreciation in value, and property investment. Many places are now investing heavily in regeneration and housing for forward generations.
Secondly, property investing provides income, and diversifies your investment portfolio by reducing risks. This article discusses the benefits of investing, factors to consider before buying, best locations to buy, types of property to invest in, rental demand, how to find UK property for sale, the buying process, and managing your investment for a profitable return. Let’s start.
Best Places to Invest in UK Property
Factors to Consider Before Buying
The first factor is your investment strategy. Are you investing for capital appreciation or income? This will determine the type of property to invest in. Capital growth and rental yields are two crucial factors when investing in property. Capital growth refers to the value increase of a property over time, while rental yields refer to the average rent earned from your property. Although both factors are critical when investing in property, some investors prioritize one.
The second factor is your budget. How much can you afford to invest? The third factor is location. You need to invest in places with high demand and the highest rental yields. The fourth factor is the property condition. Are you buying a new property or a fixer-upper? This will determine house price ratio, the amount of work and investment needed.
Types of Property and Financing Options
Residential properties are in high rental demand with best rental yields and good capital appreciation potential. On the other hand, commercial properties provide regular income streams and more stable investment options. Whereas student accommodation offers high rental yields and low vacancy rates. Mortgages and rental loans are available for residential and commercial properties. The terms and interest rates will vary depending on the lender. Buy-to-let loans are designed specifically for investors to buy property, and the interest rates and terms are tailored to suit this type of investment.
Financing a property investment can be challenging for first-time investors. First, research the local rental property market thoroughly. This will help identify the potential rental income vital in securing a buy-to-let mortgage. Bridging loans are another financing option for property investors. These loans are designed to provide short-term finance to investors who need to buy property quickly. However, bridging loans are more expensive than traditional mortgages, so consider costs carefully.
Buying, Managing and Maintaining Your UK Property Investment
The buying process for UK property is straightforward but time-consuming. The first step is to find a property meeting your investment criteria. Once you have found a property, make an offer, subject to contract, then instruct a solicitor to handle legal aspects. The solicitor will carry out searches and ensure the property is legally sound. Once the legal work is complete, exchange contracts and pay a deposit.
Completion will occur on the agreed date, and you will take possession. The first step is to find a reliable management company to handle the day-to-day management. The management company will handle tenant management, rent collection, and maintenance, ensuring your first investment property remains in good condition and generates the best rental yields. Regular maintenance ensures the property retains value and appeals to tenants. Read – How to start a buy-to-let property business.
Best Investment Locations
The best places to invest are those with high demand and strong rental yields. These include Manchester, Liverpool, Birmingham, Newcastle, Nottingham and Edinburgh. These locations have seen growth, strong both rental growth and demand and excellent capital appreciation potential. Let’s take a look at three of them.
Property Prices in Manchester
Manchester offers oodles of opportunities for various reasons. Manchester’s several universities attract thousands of students each year. Secondly, Manchester’s thriving economy focuses on technology and innovation. This resulted in increased job opportunities, which contributed to population growth. Finally, Manchester is well-connected to other major UK cities, and has been one of the best places to invest for quite a few years. The city’s excellent transport links include a significant airport. This makes the city ideal for both tenants and investors.
Despite the increase in property prices, Manchester still offers excellent value for money compared to other places like London. The Manchester property market is diverse, with different areas offering different types of properties and returns on investment. A key factor is high rental demand. This demand is driven by the large student population and young professionals attracted to job opportunities.
Another factor is the regeneration of specific areas. Several areas in Manchester offer excellent opportunities for property investment, and capital growth. A popular area, the city centre, particularly around the Northern Quarter and Piccadilly, offers apartments and townhouses in high demand among young professionals. Another popular area is Salford Quays because of its regeneration with new developments and amenities. Salford Quays attracts buy-to-let investors. Other areas include Ancoats, Castlefield, and Didsbury. Each area offers long term growth, so research each area thoroughly before deciding.
Manchester has several management companies to help manage your properties and ensure they are well-maintained. When choosing a management company, research the company thoroughly and ensure they have experience managing properties. Also, factor in company fees and their level of customer service. Overall the city offers good future growth and development projects. About property investment in Manchester.
The Average Property Price in Nottingham
Look no further than the east midlands city of Nottingham for affordable rental prices, potential price growth, and student property investment. This vibrant and bustling city attracts investors from all over the world for a good reason. With a thriving economy, growing population, and rich cultural heritage, Nottingham city centre offers many investment opportunities, from traditional properties to innovative co-living spaces and student accommodation. In addition, Nottingham’s economy and various industries, including manufacturing, technology, and finance, helped weather the economic downturn caused by the COVID-19 pandemic.
Nottingham’s rising population is expected to continue, with estimates suggesting the population could reach 400,000 by 2030. This situation made Nottingham a seller’s market, with prices rising. Property investors will likely see strong capital growth as demand continues to outstrip supply. However, price rises remain relatively affordable compared to other UK cities.
The average house price in Nottingham is around £200,000, significantly lower than the UK’ average property value of £253,000. The town features two large universities; hence student accommodation is in high demand. Additionally, Nottingham has many young professionals attracted to the vibrant nightlife, cultural attractions, and job opportunities.
Nottingham is undergoing a major transformation, with several large-scale development projects underway like the redevelopment of Broadmarsh shopping centre. Future development plans include a new high-speed rail link with Birmingham and London. With a growing economy, thriving rental market, and future growth and development plans, the city offers many opportunities to invest in property.
Property Investment in Derby’s Rental Market
Derby is witnessing a property boom like never before. With an increasing population, notable infrastructure investments, and a thriving business community, Derby appeals to investors worldwide. Derby’s property market experienced a steady increase in capital growth, with average property prices increasing by 6.3%. This increase is higher than the national average property of 4.7%, making Derby a lucrative option to invest in property. Similarly, the average rental yield is 5.9%.
Derby’s economy thrives, with significant investments in the manufacturing and engineering sectors. The city is home to numerous global companies, including Rolls-Royce, Toyota, and Bombardier, creating a stable job market. Additionally, the proximity to Nottingham and Leicester provides excellent access to a more extensive job market. Derby is undergoing significant infrastructure and transportation developments, which will further improve desirability.
The train station offers excellent connections to London city centre, Manchester city centre, and Birmingham city centre. Additionally, the city centre has a well-connected bus network, with a new bus station currently under construction. These developments are expected to boost property prices and consistent tenant demand further.
Furthermore, the city is experiencing a population increase, with young professionals and families moving to the area for work and lifestyle opportunities. The city is also becoming increasingly popular with students, with two universities in Derby. Additionally, investors can buy properties in new residential developments currently under construction.
What to Know About Property Price Growth in London
International newbies to the investment market in the UK, always consider London first. This is due, in part, to the stable political climate, robust economy, and favourable tax policies. Domestic investors also recognize the potential for high returns on a real estate investment.
High earners often flock to London, driving up demand for luxury properties. Another factor driving price growth is the tourism industry. Hence short-term rental properties are prevalent in areas of London that attract tourists, such as the West End and Covent Garden. As the technology industry grew, demand for office space and commercial properties in London increased. This led to the development of many new office buildings.
According to a recent report by Savills, London’s prime residential market has seen an average annual price growth of 2.7% over the past decade. The commercial property market also performed well. London’s commercial market consistently outperformed the rest of the UK for the past five years. According to Zoopla, average rental yields in London are 3.1%, higher than the national, average rental yield of 2.6%.
Investors willing to take on more risk can find even higher yields and price growth in other areas. Areas to look at for price growth include exclusive Mayfair, Upscale Chelsea, Canary Wharf, Shoreditch, and Notting Hill. The Nine Elms development in Battersea on the outskirts also attract many investors.
Another factor driving the house price growth is a shortage of housing supply. This led to increased property prices, which benefited investors who owned property. London’s favourable tax policies have also driven growth in the real estate market. The UK has a relatively low property tax rate. In addition, the UK does not have a property transfer tax, which means investors can buy and sell properties without incurring additional taxes.
Here is the catch though. Another challenge for investors is the high entry cost. Property prices in London mean investors must have significant capital to first invest in property. It is the most expensive place to buy property in the UK, and the market turns at twice the rate of other destinations. If you want to invest in London, call us today and discuss the choice separately.
How to Find UK Property for Sale
For affordable prices, and the best places to invest in UK property, see our property portfolio of apartments and houses for sale. Many are in the best property investment areas, and each listing contains pictures, location, home features and whether that property can deliver the best rental yields. From city centre locations to outskirt districts, our wide range of property perfectly reflects the potential of the UK for investment.
We are Spot Blue high street estate agent based in London. As a dedicated local estate agent, we offer services to both sellers and buyers. Established as a high street agent in 2003, many leading newspapers quote us for industry insight and predictions. So call us today if you want to speak with a high street agent about buying or selling property in the UK.