Do you want to invest in real estate in UK? If YES, here are 20 best cities in UK with lots of opportunities to buy investment rental property.
For the best part of the last 20 years, buying investment properties have been on the rise in the UK. But even with this encouraging growth, investment property industry, also known as Buy-to let property has been hit by significant challenges. The term “buy-to-let” has recently been making headlines, and not in a good way.
Why Buy Investment Property in UK?
The most common complaint the media has is that this type of investment contributes to the inflation of house prices. That’s why the Government took major steps to reduce the attractiveness of buy-to-let, specifically, in the Budgets and Autumn Statement of 2015. The act introduced some tax changes and reduced the overall freedom the landlords previously had.
One other important event that changed the way the UK looks at investing in property is the withdrawal of the UK from the European Union (Brexit). Brexit is, without a doubt, the most important event in the United Kingdom’s recent history. Since the impact of Brexit on the housing market remains a topic of debate, most landlords are waiting for the storm to blow over before making any financial decisions regarding their property.
Although, residential property is expected to have its ups and downs in the short term, but, buy to let is still an achievable investment in the UK in the 2019 long term. Also, the population of the UK is growing, and the average number of people per household is decreasing. There are a lot of explanations for this trend, including the fact that there is an increase in divorce rates among couples.
You just have to understand that there are not enough homes in the UK to support the growing population. Another piece of data that supports this claim is the fact that the average price of a house in the UK in 2019 has risen by 1.4 percent compared to 2018.
This is great news for someone looking to invest. Another far less popular trend that investors may look into is buy-to-leave. This phenomenon refers to investors buying a property but not renting it, instead opting to leave it empty and wait for the house prices to rise.
Buy-to-leave is usually associated with London as it is prevalent in London’s housing market. Thousands of people across the UK are earning great returns from property investment and there’s never been as good a time as 2019 for investors to expand their portfolios or take their first leap into property investment.
Although the way property and buy-to-let investments make investors money hasn’t changed much for decades, but the best locations to invest has changed within the past few years alone. Gone are the days of London and the south of England offering the best investments, now it’s concentrated to specific cities and areas in the north-west and the Midlands.
If you know where to search, you can secure fantastic property investment opportunities in the UK. That’s why we’ve compiled the best places to invest in UK properties.
20 Best Cities in UK to Buy Investment Property
Birmingham is buoyed by incredible inward investment, huge infrastructural development and a predicted population growth of 13.5 percent taking the city’s population to 1.3 million by 2039. With the youngest population in Europe, Birmingham’s five universities have helped develop a talented pool of young professionals.
The second city has the largest business, professional and financial services hub outside of London, attracting huge corporations. This has only supported growing demand for living in the city, with contemporary apartments in areas such as the Jewellery Quarter, Harborne and the city centre providing excellent rental yields, between 5 percent and 10 percent on average.
Birmingham is also home to the planned £700 million Paradise development, £1.5 billion Birmingham Smithfield regeneration and Arena Central, providing new residential, commercial and leisure space. Due to being the second fastest growing UK city over 2018 and with a forecast growth of 14 percent over the next three years, Birmingham is set to remain an investment hotspot in 2019.
Britain’s oldest town comes complete with Roman ruins, medieval wood-beamed buildings and is bisected by the calm waters of the River Colne. With an Arts Centre and the University of Essex nearby, there’s no shortage of cultural activities on offer and the area also has some excellent schools and boasts of good transport links.
London is only an hour away by train, whilst nearby Ipswich can be reached in twenty minutes. House prices are rising steadily alongside increases in the rental market, making this a great place to invest.
With a large student demographic and the overall population set to expand for years to come, it is more than likely that rental yields will increase as demand grows. Leeds also has a burgeoning student population and an attractive nightlife scene, providing 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.
Renowned as the heart of the Northern Powerhouse, this city continues to impress, supported by an incredibly strong rental market and student population. Manchester is one of UK’s hotspots for foreign direct investment, and a top performer in the UK for growth.
Manchester has the highest graduate retention rate outside of London having hit 70 percent this year. This city is successfully harnessing the influx of young people to drive supply and demand for more rental properties. Also note that enviable employment options are available within the city, with a number of educational facilities setting up shop in the area including Salford’s MediaCityUK and the Amazon Academy.
Voted the ‘Best UK City to Live’ in 2016, Manchester has also embraced the buy-to-let market, increasing property prices by 27 percent over the last 10 years. Due to the significant investment bolstering its credentials, Manchester remains a consistent performer alongside Birmingham and Liverpool in the UK’s top areas for rental growth.
Located between the cities of Liverpool and Manchester, Warrington is one key place that is worth considering with regards to property investment. With the promise of new warehousing space, new jobs will be created, and employees will be looking for somewhere to live.
This could be an ideal time to invest in property in Warrington, to accommodate those employees who might rent initially but settle and choose to buy – which could create a good level of capital uplift.
Many investors are considering Warrington for investment property over nearby Liverpool and Manchester due to the more accessible housing market as well as housing prices in town being considerably lower than its big city neighbours. This makes Warrington a great location to buy a house, especially for young professionals working in the cities or those looking to start a family.
Report has it that Liverpool was the fastest growing city towards the end of 2018. Liverpool is extolled for its popularity with students, large-scale investment and regeneration of cultural touch points. As one of the most popular destinations in the UK, it’s no surprise that the former European Capital of Culture is one of the strongest buy-to-let investment hotspots on the UK property market going into 2019.
Note that this city has the fastest-growing economy in the UK, bolstered by flagship developments such as the £5 billion Liverpool Waters scheme and the Regenerating Liverpool master plan, a £14 billion scheme which aims to improve city centre connectivity and regenerate large sections of the city with projects such as Paddington Village and the Lime Street Gateway.
Sitting alongside these projects, the Liverpool Local plan is aiming to deliver 38,000 new jobs and 35,000 new homes by 2033, boosting the population above 500,000.
Projected population increase in this region is 15.4 per cent, with many people viewing the capital as a desirable cosmopolitan city catering to all manner of buyers seeking rental properties in the suburbs. Recent report singled out North-West and West London as interesting prospects, following £4.5 billion regeneration projects in Cricklewood and Brent Cross generating approximately 7,500 new homes, amenities and infrastructure for residents.
Also, West London is set to welcome the Elizabeth Line in 2019 meaning fast travel in and out of central London. Further regeneration is also expected in areas such as Ealing Broadway and White City, helping to support the local economy and standard of living.
Stevenage is a new town in Hertfordshire with good commuter links into London. Stevenage has experienced a huge rate of growth in recent years, with the average house price increasing 58.5 percent over the decade. This city provides a direct rail link to King’s Cross and so offers quick and convenient transport links to London.
Stevenage is directly commutable to the new £1billion home for Google at King’s Cross, with plenty of job opportunities expected as a knock-on effect.
Located at the heart of the Thames Valley, also known as the ‘UK’s Silicon Valley’, Bracknell is a sought-after postcode by global technology firms including HP, Dell, Honda, Hitachi and Waitrose. Note that with incredible employment opportunities and connectivity within the South East and London, unemployment in Bracknell currently sits at 2.5 percent and 86 percent of the total population is in active employment, 50 percent of which are working in Managerial or Directorial roles.
Currently home to 120,000, the population is estimated to rise by 21,000 over the next 20 years and will be a huge boost for a town on the rise. Although Bracknell was originally a post-war new town, it has undergone a number of dramatic transformations to become a very important hub for the tech sector, attracting the next wave of young and ambitious professionals that are seeking progressive digital business.
With £770 million committed to enhancing key transport, infrastructure, healthcare and educational programs while delivering new, smart residential, commercial and retail space, the most recent regeneration project has laid out a vision for Bracknell until 2032.
Reports have it that Northampton “is now the only market in the country that has enjoyed capital gains upward of 10 percent in the past 12 months”. It has an attractive town centre and boasts 170 parks and other green spaces. Northampton’s popularity stems predominantly from its status as a commuter destination.
Note that there are 96 trains a day between Northampton and London Euston, a journey which takes an hour, and 72 trains a day to Birmingham, taking on average 1 hour 8 minutes.
This city boasts of an impressive 5.2 percent growth in property prices over the past 12 months. Dubbed the fastest growing city in the East Midlands, Nottingham is spending £400 million on re-developments that will make sure the city continues to thrive.
Plus, it’s a hotspot for tech growth thanks to its central location and excellent transport links, and this gives the city a huge talent pool to pick from. Nottingham is also supported by the two major universities, whose students make up roughly an eighth of the Nottingham populace.
This budding young population, almost 30 percent of whom are aged 18 to 29, means there’s a huge demand for rental accommodation, making Nottingham a good city for property investment. The effective and extensive tram network offers opportunities outside the city centre too.
Coventry is one of the best places in the UK in terms of house price growth. Right from the turn of the century, house prices in Coventry have risen by over 250 percent. This city also provides landlords excellent rental yields – some of the highest in the country thus making it one of the best buy-to-let areas in the UK.
Note that average net rental yield excluding tax is around 5.40 percent, and only 5 other places in the UK come ahead of Coventry. The excellent yields are complimented by great occupancy rates especially by students as the city has two extremely popular universities which have a combined enrollment of over 50,000 students.
Edinburgh has enjoyed massive growth over the last 12 months that doesn’t seem set to stop. Demand has continued to rise, outperforming London and UK regional cities. During April 2018, property prices in Edinburgh were 12 percent up on the previous year, one of the highest increases of the year.
All thanks to the incredible connectivity Edinburgh has with the rest of Europe and beyond, the Scottish capital is attracting global companies including Travelodge and Amazon, who all have investments in the city that will be expanded during 2019 and beyond. Also note that this city also gains from a world-leading research sector in knowledge-based fields, helping to develop a thriving student population based around four universities.
- Milton Keynes
Milton Keynes is a popular new town with lots of land ripe for development. Amazon opened a new warehouse in the town in 2018 which is expected to attract similar big names and further job opportunities. Just like Northampton, houses in Milton Keynes sell very quickly, going under offer in just 29 days.
Phillip Hammond’s plan to revitalize the high street also helps places like Milton Keynes, where a small-town centre is dominated by a shopping centre. Milton Keynes has the go ahead for an impressive new retail and leisure development. Milton Keynes is in the top ten for fastest-rising house prices, so it may be a good time to invest now and to reap the benefits when all the development is finished.
Seen as the third and final ‘Greater City’ of the Midlands, Leicester enjoyed property price growth in 2017 alongside a huge imbalance between supply and demand creating a highly competitive market. One of the bigger economies in the Midlands, Leicester has numerous household name-brands located within the city.
Also renowned as a central location in the UK, Leicester provides immediate access to 22 million consumers and mainland Europe within 4 hours, while strong cultural links with Asia drives business growth and helps develop a diverse, multi-lingual workforce.
With property price increase of over 250 percent since 2000, Leicester is continuing to rise as a major investment hotspot. The third fastest growing location in the UK towards the end of the year, Leicester has gained from people leaving London for emerging regional markets. With a prime location and easy access across the UK, Leicester represents a fantastic investment opportunity.
Norwich is a compact medieval city which, according to local legend, once housed 365 pubs and 52 churches. Norwich with its very low crime rate and excellent schools is a popular place for young families. But Norwich also enjoys an international reputation as one of the world’s first UNESCO cities of literature and it hosts numerous literary festivals and talks from world-renowned authors, which makes it a fascinating place to live.
Note that even though Norwich is not quite as connected as some of the cities on this list, the recent widening of the A11 carriageway has improved travel times.
London can be reached in around 1 hour and 50 minutes by train and Cambridge in around 1 hour 30 minutes by road and rail. Reports have it that house prices have climbed rapidly in the past year and are set to continue doing so. With a large student population from two universities and many graduates choosing to stay on in Norwich, rental demand is high.
Sheffield is another contender for the Manchester ripple effect as it boasts of very shockingly low prices, especially as you can buy an apartment in the city centre. The centre itself has already improved dramatically, and there’s a lot more on the way: The Moor shopping centre alone is having £480 million spent on it, HSBC is opening new offices, and there are two luxury hotels being developed.
Experts believe you’re unlikely to see big gains this year in Sheffield, but it offers the opportunity to buy in at a great price – locking in strong yields, and allowing you to benefit from the growth that is very much ahead. Sheffield is a buy to let property investment hotspot to watch and explore.
With Cross rail set to be finished this 2019, next year could be the year that Slough blossoms in popularity. Note that this city is one of the key destinations along the commuter belt and a major commercial hub in the South East; prices are forecast to rise 35 percent by 2020 thanks to increased investment and an economy worth £9 billion.
Coupled with huge infrastructural development and a large regeneration scheme, Slough is now a commercial powerhouse with the lifestyle amenities to match.
Also, with the biggest trading estate under single ownership in Europe featuring more than 4,600 businesses, the Slough Urban Renewal scheme is pushing new residential, commercial and cultural spaces, Slough is continuing to benefit from the ‘London Exodus’, presenting itself as the ideal commuter destination.
This commercial growth in Slough will also be supported by the Heathrow Expansion, a third runway which is set to provide a further 114,000 jobs for the region by 2030.
A recent report classified Halifax as one of the best places to invest in property for buy to let. This is in part due to the number of businesses operating in the area, including McVities and Nestle. Secondly, the affordable housing is why many people decide to lay down roots in the town, as the average house price in Halifax is £149,925.
This is cheaper than nearby Northowram, Hipperholme and Shelf, making it an attractive alternative to workers who are priced out of the surrounding areas.
Also, Halifax has superb connections. It is situated just 30 minutes away from the Peak District and trains run to Leeds every 15 minutes and Manchester every 30 minutes. This makes it a convenient choice for those who commute to work but want affordable accommodation. One opportunity to invest in the Halifax buy to let market is in H1 development. H1 is in the popular West Parade area and the town centre is just a short walk away.
What makes this development particularly attractive is how affordable the apartments are. Priced under £70,000, there is a flexible payment plan in place which means that £1,814.45 can be paid monthly for 24 months and then there are three years to pay the balance after completion. A gross rental yield of 8 percent is predicted per annum.
Newcastle with a massively growing population (112 percent between 2002 and 2015), the rising popularity of city centre living means Newcastle is a location to leverage. Newcastle’s attraction to young professionals equals demand, especially coupled with a strong student body and innovative developments.
This city has been identified by experts as one of the most affordable regions for property. Newcastle is ideal for BTL investments, favouring long-term growth as the city continues to grow. Commercially, Newcastle has attracted huge companies such as British Airways, HP, Nestle, Siemens and Ubisoft.
Boasting of some of the highest staff and graduate retention rates in the UK, Newcastle provides enviable employment opportunities that continue to grow, supported by a £12.5 million investment in digital infrastructure that has yielded one of the fastest broadband speeds in the UK.
Although property prices have increased at a slower rate than its northern counterparts, Newcastle has still shown positive growth over the last 5 years, increasing by 23 percent.
Statistics has shown that property prices in the UK will continue to increase. However, it is unknown how the current political climate in the UK will affect the housing market. So the best thing might be to just wait until Brexit is sorted out before making a financial decision of this magnitude.