Picking up-and-coming hotspots is one of the keys to successful property investment. There is no absolute rule, so choosing the area or region of the country in which to invest is likely to require all your powers of judgment.
Nevertheless, there are resources which may help you pick out the current hotspots – and you might want to make a start at least with our comprehensive hot spot series on practically every city and town in the UK.
Investing in the North
In recent years, there has been much talk of the “Northern Powerhouse”. As the spotlight has shone on this part of the UK, interest has inevitably peaked among property investors.
But if you are interested in investing in this particular powerhouse, it might help to know exactly where “the North” is – and the definition may prove quite elusive.
The Property Hub, for example, defines the North as anywhere north of Chester. But several other property investment specialists, including the Buy Association, are more flexible in their definition and include the Midlands.
Manchester, Birmingham, Leeds, and Liverpool
Citing a Global Real Estate Outlook published by IP Global, the Buy Association pins its investment colours to the four cities of Manchester, Birmingham, Leeds and Liverpool as the latest hotspots in the North:
- the Buy Association says that 21% of all homes bought in Manchester in the past year have been purchased by landlords;
- during the same period, average prices of these properties have increased by more than 10%, and average rental yields currently stand at around 7%;
- the average price of homes purchased by investors is £182,630;
- interest has expanded from the Greater Manchester area itself into outlying areas such as Sale and Altrincham;
- often considered the UK’s second city, Birmingham’s population is expected to grow to 1.3 million by the year 2039, significantly increasing the demand for rental accommodation;
- homes have increased in value by nearly 9% in the past 12 months, and rental yields currently stand at just over 6%;
- the average price of homes bought by investors is a little over £200,000;
- residential property in Leeds achieves an average price of £196,000 – some 4% higher than a year ago;
- according to figures published by Buy Association, rental yields of some 6.8% may currently be achieved, but the size of the rental market may rise by nearly 19% by 2022;
- the current shortage of homes to rent means that demand outstrips supply – and this is likely to continue until at least 2021;
- the city offers some of the cheapest buy to let investments – the average price of a home in Liverpool is little more than £140,000 (an increase of only 2.4% on the previous year);
- in some parts of the city, rental yields as high as an impressive 12% have been reported, and the average stands at more than 8%;
- last year, more than a quarter of all homes purchased were by buy to let investors
However you choose to define it, the North’s major cities currently offer attractive prospects for property investors – and look set to continue to do so well into the future.