If 2018 is the year in which you are looking to invest in property for the first time, or to expand an existing portfolio, location remains the priority concern.
Your choice of location is likely to be the critical weathervane for the two economic indicators affecting any property investment decision:
- where in the country are property prices tipped to see favourable capital growth; and
- where is that property likely to achieve robust demand and guaranteed rental incomes.
In a word, where are the property investment hotspots going to be in 2018?
In a report by the Property Hub, the established buoyancy of the housing market makes it difficult to find bargains in London and the South East, so savvy investors are likely to look north during the coming year. (As we reported last month, landlords are buying further afield, with Bristol being the most sought after area to buy and rent in 2017).
Citing recent reports by consultants KPMG, the Property Hub tips Yorkshire, the North West and the North East – indeed, anywhere north of Chester – as areas where capital gains in the value of house prices are most likely to be achieved.
As far as maximising the rental income from your investment is concerned, the same source also recommends anywhere north of the Midlands as a prime target.
The sites list of the top ten cities includes:
- the spotlight is very much on this regenerated, post-industrial giant of the north, where new infrastructure development has improved links to and within the city and its metropolitan areas;
- its universities and colleges attract more than 100,000 students – almost all of whom swell the ranks of those eager to rent;
- snapping at the heels of its northern neighbour is Liverpool, which boasts some of the lowest average house prices in England, yet also manages to maintain high rental returns on investments;
- a large student population – attracted by the city’s four universities – once again provides healthy demand for lower-cost rented accommodation;
- property is in high demand in Leeds, so breaking into the market may be somewhat more difficult, but capital appreciation is strong;
- three universities and innumerable colleges support a student population in need of rented accommodation;
- you only need look as far as the Midland capital of Birmingham – less than an hour from London when the HS2 rail link opens – for steadily rising property prices;
- its population of almost 4.5 million is becoming more and more affluent, driving a demand for better quality housing and an increase in the availability of rented accommodation in established and up and coming suburbs such as Halesowen and Edgbaston;
- Sheffield is beginning to share in the rising fortunes of this part of South Yorkshire, where the boom in house prices in nearby Leeds has driven people to look for other opportunities close at hand;
- some parts of Sheffield have seen house prices increase by as much as 300% since the beginning of the millennium, but good deals are still available, and rental yields in some wards are among the strongest in the country;
- once much-maligned as a place to live, Hull as enjoyed a recent reversal of fortunes – helped considerably during its year as the City of Culture in 2017;
- house prices are seeing a resurgence, and the demand for rented accommodation is producing yields as high as 15%.
If you know where to look – and that’s likely to be the Midlands and all points north – 2018 has many hotspots in store for the canny property investor this year.