For us, enquiries for the best places to invest in UK property have risen from domestic and foreign interest. In an uncertain world, people are turning to the age-old belief that investing in property keeps your money safe. Additionally, measures by the UK government to encourage investment in real estate are paying off, especially in the private rented sector. UK housing experts say demand for private rented homes will increase. Additionally, some UK buyers are more focused on capital appreciation than passive income. However, the one golden rule still stands. Investing in property is all about location in the UK, not what you buy. With that in mind, we look at significant UK places leading the way for domestic and foreign property investment.
Best Places to Invest in UK Property
1: Property in Manchester
With average house prices in Manchester of £240,000 and rental yields between 5% to 8%, property industry experts predict capital growth return over four years of 15% to 18%. Manchester real estate powerhouse demands respect because of mass investments into local infrastructure, transport, and property. Manchester has the fourth highest rental yields for buy to let UK property investors.
Since there has also been new development overall, the growing number of working professionals’ nets investors a profitable house market. The Global Liveability Survey voted Manchester the best place to live in the UK. While Zoopla said supply and demand ratios of 1 to 5 give UK investors decent liquidity. Much hype on the investment market also surrounds the new Great Railway project, heading to other northern cities and bringing in more tourism. See investment property for sale in Manchester, UK.
2: Property in London
As England’s capital city, many overseas investors look at rental and investment properties in London city. Specialising in finance, tourism, politics, arts, culture, fashion, and education, London presents many timely rental and investment opportunities for property buyers looking for solid returns on investments and long-term stability.
3: Property Investment in Nottingham City
With average prices of £180,000 to £230,00, this city is another northern powerhouse famous for returns on property investment. More specifically, though higher rental yields. Averaging 5% to 9%, the large student demographic (roughly 13%) revolves around the city centre university. Additionally, Nottingham is home to the Queen’s medical centre, one of the UK’s best hospital and teaching centres; hence there will always be strong property demand.
For rental yields, the city centre performs at roughly 9% from the student market but heads into outskirt areas with property demand from families. As a result, investors can average 5 to 7% with lower property prices. Meanwhile, predicted house price growth currently sits between 15% to 19% for capital appreciation.
4: Best Areas of Birmingham
Sitting in the West Midlands, buying a house in Birmingham city averages out at £205,000. For potential rental demand, Right Move says property demand increased dramatically over 12 months due to rising ratios of the younger generation. Additionally, there have been mass investments into their city centre, and property owners get 5 to 7% in rental yields, although these could rise by 16% over five years.
Part of the property popularity is that the city is an ideal alternative for young professionals leaving London because of high property prices and living costs. Meanwhile, those looking at capital appreciation should factor 14 to 17% over five years. See property for sale in Birmingham.
5: Best Prices in Liverpool – UK
This attractive UK destination stands out for investment affordability. Even though the annual capital growth isn’t as high as the cities mentioned above, UK experts are still touting 13% over four years, while other publications are reporting 9 to 18% value. Average prices of property are £165,000 to £185,000.
Liverpool has shed its once undesirable UK reputation of urban decay by investing in transport, business, and property markets. Additionally, like other major UK cities, the younger generation drives rental markets. Rent yields average 5 to 7%, although the L1 property area has delivered 8% alongside 10% in the L7 area, thanks to the Royal Liverpool University Hospital.
6: Locations in Leeds
Here is an exciting fact for the UK buy to let investors. More than 50% of Leeds‘s population rent. Hence, if you want steady returns and guaranteed market base, Leeds is the best UK destination. Expect rental yields between 5 to 8%, although industry observers are predicting yield growth of 14% over five years.
So, why is there a substantial rental tenant market? Leeds is home to England’s second-largest banking and financial centre. It is also the UK’s most prominent centre for law. Additionally, many major UK businesses have their headquarters there. They show no signs of letting down either, with a super performing economy. Granted, it is not one of the UK’s cheapest places to buy property, with prices averaging £215,000 to £265,000, but over four years, house owners can enjoy an expected 9 to 18% growth.
7: Houses in Newcastle
Leading investment in the Northeast, Newcastle, the UK’s eighth-largest city, is another affordable destination, with property prices averaging £185,000. Like other destinations on this list, the growing young population and start-up business drives rental demand, of which property owners can expect averages between 6 to 8%. Additionally, Newcastle and Northumbria universities drive the market from the student population. Vital areas for rental include the NE1 and NE2 areas.
The one downside is that no professional investment experts rate the capital price growth, with the latest property results at around 8% and the last five years proving less than ideal.
Invest in Property Summary
Savills say the Midlands and North of England will outperform south places for property investment and capital growth over five years. This is no surprise. There has been less house demand in the south for a while now, thanks to buyers heading north for lower prices. Savills also says to oversee Liverpool and Manchester as these destinations look promising for house price growth. Meanwhile, Right Move sparked people’s interest with what they call the boomerang tenants.
These people left big cities like London because of COVID and lockdown restrictions, but they are now returning, raising the price and house rental demand. However, investment and property experts agree that investors should bypass the London centre. England’s capital lost its footing because of questionable property affordability. However, they have not written off the commuter belt of London, which provides more affordable house alternatives for those working in the city who commute.
More about Investing in UK Property
We hope we have given you lots of information about locations and the best places to invest in UK property. So call us today and speak with a local property agent if you have any more questions. Alternatively, please drop by our office in Surbiton, Surrey, for face-to-face discussions on the UK’s house market. You can also start your search for investment property by browsing our portfolio of properties for sale in all the above destinations and more that top the list of places to invest in the UK.